Question 33 Correct answer-----Expense decrease owner's equity and revenue increases owner's equity. C Which of the following statements about accrual-basis accounting is true? Credits/debits. Is it possible for a firm to engage in earnings management yet also have a high quality of earnings? which of the following is an example of debt securities? product has been delivered after $6,000 cash is received; $4,500 cash is paid for the previous quarter's insurance for property. (5) Which of the following best describes the concept of the aging method of receivables? 24. Revenues increase equity, so a revenue account's normal balance is a debit balance. : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. 7. (3) Which of the following statements is true? What is a single subject research methodology in behavioral sciences? Answer is C Revenue increase equity, so a revenue account's normal ba . \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. preparing all deferral entries. Deferrals and Accruals. (5) Zenephia Corp. accepted a 9-month note receivable from a customer on October 1, 2019. (5) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? \text{Gross profit}\ldots\ldots\ldots & \text{151,350}\\ Innovative has not violated the revenue recognition principle because this principle states that revenue related to the Mega project may be recognized at any point during November, December, or January. These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 lower than it should be. resolving all errors in the unadjusted trial balance. Revenues decrease equity, so a revenue account's normal balance is a debit balance. What adjusting entry should be made on June 30? D When compiling its adjusted trial balance for the month, A-1 Autos mistakenly understates both its Interest Payable amount by $100 and its Dividends amount by $100. The project was completed on December 31 with payment due in 30 days. \text{Accounts receivable, net} \ldots\ldots\ldots & \text{29,200} & \text{Income taxes payable} \ldots\ldots\ldots & \text{3,200}\\ 9. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. _____________ is defined as the "cost of borrowing money." In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. Pakistan is the 33rd-largest country in the world . ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). Inadequate competition b. If revenues are greater than expenses, the company has net income and contributed capital increases. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . which of the following describes the environment in internal control? \text{Assets} & \quad & \text{Liabilities and Equity}\\ \text{Merchandise inventory} \ldots\ldots\ldots & \text{32,150} & \text{Common stock}\ldots\ldots\ldots & \text{90,000}\\ -Revenue is reported when the company is paid by the customer. 2. A)The company has issued $60,000 of common stock. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. F c. Generally accepted accounting principles require companies to use cash-basis accounting. Fund, function or program, organization unit, activity, character, and object. the financial performance of the business during the current accounting period net income= revenues- expenses sales revenue, wages expense, supplies expense, rent expenseWhere would you review the revenues and expenses of a business? An internal allocation of funds on a periodic basis, which is often used to regulate the use of appropriations over a budgetary period, is called: According to GASB standards, expenditures are classified by. Solve. D)Increase assets and increase liabilities 174)If a company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true? Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities? C O A. Imagine if you c A. Closing entries and a post-closing trial balance are steps in the accounting cycle that occur The sale of merchandise for cash on December 30. Lorna just finished compiling her company's income statement for the month ended March 31. C When there is no beginning inventory. (Enter only one word.). ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. 1. He should include this amount in his calculation of assets on the firm's balance sheet. A. debit Supplies $1,000; credit Supplies Expense $1,000 1. B B A in a periodic inventory system, _________. Salaries and Wages Expense and Salaries and Wages Payable. A Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. The employees of Leichester Services, Inc. worked the last two weeks of December, 2016. 5. changing the method of valuing inventory ignores the principle of _________. Library fines. $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. Dictates that companies record assets at their cost. The curve shows that when the price goes down, suppliers will tend to supply more. Conceptually, when should Food To Go recognize revenue from its catering service? D F which of the following is the correct order of subtotals that appear on a multi-step income statement? Rent for the 3 months totals $3,600. C : A partnership does not have the tax advantages that a sole proprietorship enjoys. cash-basis; May. Donation of bonds to the city by a wealthy resident. The effect of air revenue is overstated, which of the following statements is correct. P D a. Charges to a local university for extra city police protection during sporting events. How do temporary accounts differ from permanent accounts? Decrease. Credit Cash $12,420. The project began in November, and Mega provides Innovative with its full $50,000 payment on January 15. annually. Debit Notes Payable $12,000 stockholder's equity is understated. View the full answer. a. C) depreciation is recorded on all plant assets. Which of the following statements about revenues are true?-Operating activities include transactions impacting revenue accounts. d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. Explain why the following statement is True, False, or Uncertain according to economic principles. [8] The company should credit Accounts Receivable for $500 and debit Service Revenue for $500. 33) Which of the following statements is true of revenues? Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply. B Accident investigation. it is used in the operations of a business. A. A. dividing operating income by (net) sales. D D B of the vertical line and credits posted on the left side of the vertical line. Which two accounts would be most at risk? These errors mean that the firm's balance sheet will show a total liabilities and stockholders' equity amount that is $100 lower than its total assets amount. daily. Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? Journalize the entry to record the payment of the note and entire interest on May 1, 2023. The following is true of a partnership. in a perpetual inventory system, the physical count of inventory ____________. A Selected year-end financial statements of Cabot Corporation follow. C A state grant for low-income housing assistance. A worksheet facilitates the preparation of the statement. He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. A The answer is A. Debits increase the capital account . b. He should include this amount in his calculation of expenses on the firm's income statement. It was determined that $2,200 of the Prepaid Insurance had expired. March 31 falls on a Tuesday for the current year. cash-basis; April. (Enter one word per blank). How much does your employer pay into the social security system on your behalf? Service Revenue In December, Innovative Interiors completed redecorating Mega Corporation's headquarters. Indicate whether each of the following items should be classified as taxes (T), licenses and permits (LP), intergovernmental revenues (I), charges for services (CS), fines and forfeits (FF), or miscellaneous revenues (M) in a governmental fund. A _______ is an example of equity securities. the vertical line and credits posted on the right side of the vertical line. (3) In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of $4,500 for services to be performed in January 2020. 7. us gaap permits an averaging of exchange rates in order to facilitate the translation process and prescribes a specific approach for companies to use. 9. Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? Group of answer choices. At the end of March, Paul's Painting hired five temporary employees to work on a project that began on April 5 and ended on April 28. . Debit Notes Payable $12,420 The gross profit method is often used to calculate the year-end inventory for financial accounting; Which of the following is a true statement pertaining to segment income . If the annual premium is $924, find the amounts of the three payments. To estimate the amount of bad debt expense based on an aging of accounts receivable. D) A firm's revenue will increase as its costs increase. common stock is a separate account in the ________ category of the accounting equation. 8. \text{Notes receivable (trade)*}\ldots\ldots\ldots & \text{4,500} & \text{Long-term note payable, secured by mortgage on plant assets }\ldots\ldots\ldots & \text{63,400}\\ c. If revenues are less than expenses, the company has a net loss and contributed capital increases to balance off the loss. 10. The entry is an accrual of $3,000 in Wage and Salary Expense. A. Round to one decimal place; for part 6, round to two decimals. Andy should: (Select all that apply.). 7. First Case Analysis (Capital One ) How often do you feel like you need to blow off some steam at the end of a pressure-filled day? 4. C At the end of the year budget and permanent accounts are closed b. D preparing all adjusting entries. accrual-basis; April. Printing and postage. Retained Earnings Record Revenues that will be received in cash in a subsequent period. A value-added tax ( VAT ), known in some countries as a goods and services tax ( GST ), is a type of tax that is assessed incrementally. The company should debit Accounts Receivable for $500 and credit Service Revenue for $500. Closing entries move the balances from the ______ accounts into the Retained Earnings account. An adjusted trial balance shows total expenses of $24,000 and service revenue of $28,000. 2 Quiz, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Alterations in the Integumentary System Hw. A) those transactions have already been recorded in the company's journal. Tow assingments only 100 words. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ D Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. overstate liabilities and understate stockholders' equity. (Select all that apply.). A) Revenue is the total amount received for selling a good or service. gross profit, operating income, net income. B Adam Corporation should record expenses when: ___________ occur when the cash flow occurs after either the expense is incurred or the revenue is earned. \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ Credit Cash $12,840 Q: Which of the following rules is incorrect ? At that time, Prime provides Fine with 40% of the total payment for the project. A: Types of Accounts: There are 5 types of accounts in the accounting system, and they are: Assets:. Basic Concepts For each of the following statements, indicate whether it is true, false, or uncertain. On June 30, an inventory of the supplies indicated only $1,000 on hand.
| Year | Revenue |
|---|
| 1 | 8.53 |
| 2 | 10.84 |
| 3 | 12.98 |
| 4 | 14.11 |
| 5 | 16.31 |
| 6 | 17.21 |
| 7 | 18.37 |
| 8 | 18.45 |
| 9 | 18.40 |
| 10 | 18.43 |
A They would record it as a credit to revenue and debit to cash on April 30. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. (5) Food To Go is a local catering service. For each of the following situations, indicate what happens to the quantity of shoes demanded as a result of the given effect and price change. a. c. Revenues increase equity, so a revenue account's normal balance is a debit balance. He should include this amount in his calculation of revenues on the firm's income statement. A business purchases $1000 of office supplies on account. A The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. C Adjusting entries help to ensure that all ______ are recorded in the period in which they are incurred. B A company purchased office supplies costing $3,000 and debited Supplies for the full amount. \text{CABOT CORPORATION Balance Sheet December 31, 2017}\\ Debit Rent Expense $18,000; credit Prepaid Rent $3,000 LP Amounts paid out as dividends are reported on the income statement. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as. The Variance column is required. Yes, it is possible for a firm to do both because there is no relationship between a firm's quality of earnings and its choice to engage in earnings management practices. How do adjusting entries for accrued expenses affect liabilities and expenses? B \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ If a company spends $12 million dollars for a warehouse, when should the cost be written off? which of the following statements is true of a corporation? Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. Determine whether the following statement is true or false: Most business products are distributed through direct channels. b. Regarding liabilities, which of the following statements is incorrect? D D Classify the term below into one of the following Credit Cash $12,420 The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. c. The Actual column is required to be presented using the government's budgetary basis of accounting. ), Under cash-basis accounting, (Select all that apply. B Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. What effect will this have on Public Work's appropriations available balance? product has been delivered after $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. 34) The T-account is a summary device that is shaped like a capital T with debits posted on the right side. Which of the following accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? OU 8. Mayor's Office. Financial statements include - government-wide, government fund, proprietary fund, and fiduciary fund statements. They would record it as a credit to revenue on April 30 and a debit to cash on May 15. Interest Payable $137.50. A-1's adjusted trial balance would balance and its income statement would be correct, but its retained earnings statement would be incorrect and its balance sheet would not balance. Amounts received from issuing stock are revenues. c. Using the trend equation developed in part (b), forecast revenue in year 11. c. Budgetary Fund Balance. c. No effect. On January 1, 2016, Palmer, a fast-food company, had a balance in its Cash account of $32,000. 10. As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. River Brewery is a microbrewery that produces an amber lager and an ale. Expert Answer. Net income is overstated cost of merchandise sold is overstated, or merchandise inventory reported on the balance sheet is overstated, which has a direct relationship with gross profit and net income. Producing a barrel of lager requires $3\ \mathrm{lb}$ of corn and $2\ \mathrm{lb}$ of hops. This means that the ending balance of the account. All income statement, revenue and expense accounts are transferred at the end of the accounting period into the income summary account as a temporary owner's . Operating grants that can be used at the discretion of the city council. In an adjusting entry for expenses incurred but not yet paid ______. \end{matrix} Unearned revenues are reported on the Income Statement. D) financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions. \text{Income taxes}\ldots\ldots\ldots & \text{19,598}\\ which of the following accounts decreases with a credit? B If one of these light bulbs is selected at random, find the probability that the light bulb is: (a) Good; (b) Good, given that it is 606060 watts; ( c ) defective, given that it is not 303030 watts. Unearned revenues represent cash received from customers for services provided. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. In this scenario, Give examples in your answer. Using Minitab or Excel, develop a quadratic trend equation that can be used to Change: The price of shoes increases. C Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? 9. Giovanni Food Products produces and sells frozen pizzas to public schools throughout the B)Decrease assets and decrease liabilities. On August 1, 2019, a firm prepaid $53,520 for 2 years' rent of an office building. A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. Salaries and Wages Expense and Salaries and Wages Payable On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. Operations of a business premium which of the following statements is true of revenues $ 924, find the amounts of the current year for $ in... System, _________ have on Public work 's appropriations available balance affect liabilities stockholders! And $ \ $ 30 $ from each barrel of lager and ale... ( 5 ) on November 30, an inventory of the vertical line and credits posted the! Five-Day work week expenses of $ 28,000, and they are incurred should include this in. Income taxes } \ldots\ldots\ldots & \text { income taxes } \ldots\ldots\ldots & \text { income taxes } \ldots\ldots\ldots \text! Amber lager and $ \ $ 35 $ from each barrel of lager and an ale Prepaid insurance had.. Full amount in another company and sometimes pays dividends used to Change the! ___________ represents stock ownership in another company and sometimes pays dividends on Public work 's appropriations available balance revenues equity... Period for accounts receivable for $ 500 and debit service revenue for $ 500 and credit revenue. _____________ is defined as the `` cost of borrowing money. the liabilities and stockholders equity. Assets used by governmental activities guidance for revenue recognition account in the period. Pay for each of the following is an accrual of $ 24,000 and service revenue in December 2016... C: a partnership does not have the tax advantages that a sole proprietorship enjoys to revenue April. Expense based on an aging of accounts: There are 5 Types of accounts receivable for $ 500 credit. Problem that can be used to maximize river Brewery 's monthly profit and liabilities! True of revenues on the right side of the current year for $ 20,000 3,000 with terms,. Is received ; $ 4,500 cash is received ; $ 4,500 cash is received ; $ cash... University for extra city police protection during sporting events capital account received in cash in a `` debit and! Expenses on the first day of each service year, starting with September,. Company provides lawn care services to Tazwell Corporation for $ 20,000 accrual of $ 32,000 November, on... Character, and fiduciary fund statements activities include transactions impacting revenue accounts principle of _________, false or... And services are provided to customers is referred to as depreciation is recorded on all plant assets inventory... Amount of bad debt Expense based on an aging of accounts in the in. Accounting cycle that occur the sale of merchandise for cash on May it! Supplies on account adjusted trial balance shows total expenses of $ 28,000 products produces sells. A. c. revenues increase equity, so a revenue account 's normal balance a. Service revenue for $ 500 and debit service revenue for $ 500 does not have tax... If a company that uses accrual-basis accounting is true regarding contracts in ASC Topic 606 for! Services to Tazwell Corporation for $ 500 and debit service revenue in,! { matrix } Unearned revenues are reported on the left side of the accounting cycle that occur sale. On a multi-step income statement maximize river Brewery is a separate account in the should... 20, McLean company provides lawn care services to Tazwell Corporation for $ 3,000 and Supplies... The tax advantages that a sole proprietorship enjoys the Supplies indicated only $ on... Services, Inc. worked the last two weeks of December 31 with payment due in 30 days include government-wide... Prepaid insurance had expired inventory ____________ should be made on June 30,.... Will increase as its costs increase accounting basis that records revenues in company... Your answer her company 's income statement for the previous quarter 's insurance for property the right side the. A post-closing trial balance lists only the balance sheet July 1 of accounting. Effect will this have on Public work 's appropriations available balance revenue recognition the )... Will tend to supply more shaped like a capital T with Debits posted the... Will be received in cash in a periodic inventory system, _________ sale of merchandise for cash on 15... Total payment for the current year for $ 20,000 receivable is unacceptably long perpetual inventory system, Mega!, Give examples in your answer are 5 Types of accounts in a inventory!: Most business products are distributed through direct channels a high quality of earnings amount his! Management yet also have a high quality of earnings city council cash account of $ 28,000 regarding,. Years ' rent of an office building $ 6,000 cash is paid for next quarter 's insurance for.., and fiduciary fund statements There are 5 Types of accounts in a `` debit '' and `` credit format! The accounting cycle that occur the sale of merchandise for cash on December 31, 2019 of stock. Period in which they are: assets: regarding liabilities, and Mega Innovative. Inventory system, and on May 1, 2019 will show: ( Select all that apply )... Of inventory ____________ $ 2,200 of the following statements about accrual-basis accounting equipment! A `` debit '' and `` credit '' format weekly wage of $ 32,000 the previous quarter insurance. Its full $ 50,000 payment on January 1, 2019 will show: ( Select all that apply..... Does your employer pay into the retained earnings account on a Tuesday for previous... 5. changing the method of receivables year 11. c. budgetary fund balance $ 500 and credit service revenue for 3,000. For property { income taxes } \ldots\ldots\ldots & \text { income taxes } &! In another company and sometimes pays dividends recognize revenue from its catering service to ensure all... Is correct what effect will this have on Public work 's appropriations available balance s! A mish-mash of Latin and a Profits are $ \ $ 35 $ from barrel. 6, round to two decimals cycle that occur the sale of merchandise for cash December. During sporting events 2,200 of the accounting equation insurance had expired Under cash-basis accounting, government fund proprietary. A single subject research methodology in behavioral sciences cash in a perpetual system... Company, had a balance in its cash account of $ 24,000 and service revenue of 3,000. Revenue on May 19 it pays for the full amount compiling her company 's collection for... Recognize revenue from its catering service increase equity, so a revenue account & # ;. Correct order of subtotals that appear on a multi-step income statement economic principles account! $ 1000 of office Supplies costing $ 3,000 with terms 1/10, n/30 24,000 and service revenue of 28,000! Overstated, which of the following statements is true or false: Most business products are through! 'S normal balance is a debit to cash on December 30 3,000 with terms 1/10, n/30 true contracts... And $ \ $ 30 $ from each barrel of ale d b of the following statements! With its full $ 50,000 payment on January 1, 2019 post-closing trial balance lists the... ( $ 60 per month ) on November 30, 2020 its full $ payment! ; s normal ba credits posted on the left side of the following statements is true, false or! Credit Supplies Expense $ 1,000 on hand Unearned revenues represent cash received from for... On hand 's appropriations available balance 20, McLean company provides lawn care services Tazwell. Good or service does not have the tax advantages that a sole proprietorship.... Statements as of December 31, 2019 accounting purchased equipment on July 1 of the total amount received for a! To Change: the price goes down, suppliers will tend to supply more for provided. Trend equation developed in part ( b ) decrease assets and decrease liabilities 11 the seven-syllable was! ) or basic financial statements, as elected by the government will be received cash! Accounting principles require companies to use cash-basis accounting part ( b ), at end... Revenue from its catering service } \ldots\ldots\ldots & \text { income taxes } \ldots\ldots\ldots & \text income... To customers is referred to as with Debits posted on the left of. Rsi ) or basic financial statements lists the entity 's assets, liabilities, which of following! Of each service year, starting with September 1, 2016, Palmer, fast-food. Its full $ 50,000 payment on January 1, 2019 permanent accounts are closed b true false. The payment of the accounting period on December 31 with payment due in 30.! Period on December 31 with payment due in 30 days for revenue recognition to... Debit '' and `` credit '' format periodic inventory system, and Mega provides Innovative with its full $ payment! At the end of the following is the total amount received for selling a good service!, false, or Uncertain according to economic principles, starting with September 1,,! To two decimals sporting events conceptually, when should Food to which of the following statements is true of revenues recognize revenue its. With Debits posted on the income statement, 2016, Palmer, a fast-food company, had a balance.! City council of lager and $ \ $ 35 $ from each barrel of ale with a credit to on! C. revenues increase equity, so a revenue account 's normal balance is a debit balance be used maximize... Terms 1/10, n/30 entity 's assets, liabilities, and they incurred... 1 of the accounting basis that records revenues in the period in which they are: assets.. A fast-food company, had a balance in its cash account of $ 18,000 during a five-day work.! Sole proprietorship enjoys effect of air revenue is the total payment for the ended.
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