C 5. $$ A 7. Debit Rent Expense $3,000; credit Prepaid Rent $3,000 (3) Dallas Company loaned $10,000 to Ewing Company on December 1, 2019. Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. Eighty percent of the toys sold in the United States are manufactured in China. P. Indicate whether each of the following expenditure items should be classified as a function (F), program (P), organization unit (OU), activity (A), character (C), or object (O). A. assets are understated. The adjusted balance for Prepaid Insurance at December 31, 20122, will be Which of the following statements are correct regarding the accounting for this insurance over the six-month period? Salaries and Wages Expense and Salaries and Wages Payable An adjusting entry for accrued expenses involves: (Select all that apply.). A He should include this amount in his calculation of assets on the firm's balance sheet. Answer 2. (* These are short-term notes receivable arising from customer (trade) sales.) Initially a prepayment for items such as rent or insurance are recorded as assets and later are recorded as a(n) __________ in the period the benefit expires. which of the following accounting methods is used to account for controlling interest investments? Transcribed image text: Which of the following statements is true? (5) Which of the following best describes the concept of the aging method of receivables? 2 Quiz, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Alterations in the Integumentary System Hw. A Salaries earned from February 1st to March 1st are to be paid on March 10th. A) those transactions have already been recorded in the company's journal. a. an internal document that helps summarize data for the preparation of financial statements is called a __________. b. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. Debit Interest Payable 140 The post-closing trial balance helps to verify that: (Select all that apply.). resolving all errors in the unadjusted trial balance. Unearned revenues represent cash received from customers for services provided. a. ), Under cash-basis accounting, (Select all that apply. eastern United States. A the bank charged a service fee of $55. Which of the following statements is true? The customer promised to pay at a later time. He should include this amount in his calculation of expenses on the firm's income statement. Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. The process of allocating the cost of an asset to expense over the useful life of the asset is called. If an adjusting entry's credit is to a liability account, then the debit must be to ______. True or false: Adjusting entries ensure that assets in the balance sheet are reported at amounts that have been used up or expired during the period. B 1. P Solve. Her next step in preparing the company's financial statements should be to A) Revenues decrease owner s equity, so a revenue account's normal balance is a credit balance. D annually. which of the following is the correct order of subtotals that appear on a multi-step income statement? Adam Corporation uses the cash-basis of accounting. Which of the following accounts increased as a result of this transaction? B overstate assets and net income. D Study with Quizlet and memorize flashcards containing terms like (3) Which of the following statements is true?, (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. Interest Payable $137.50 B) amounts paid to make the asset ready for its intended use, A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period. (Enter one word per blank.). d. Insufficient information to determine the effect. If the annual premium is $924, find the amounts of the three payments. \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ Record Revenues that will be received in cash in a subsequent period. Amounts received from issued stock are reported on the income statement. Explain why the following statement is True, False, or Uncertain according to economic principles. $2,500 How do temporary accounts differ from permanent accounts? Credit Cash $12,420. b. Accrual-basis accounting records both cash and noncash transactions when they occur. Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply. Which of the following is true of a partnership? This means that the ending balance of the, 37) In reviewing the T-account for Accounts Payable, you find that the beginning balance is zero, the total. 4. When there is no beginning inventory. What amount will be shown for prepaid rent on the December 31, 2020 balance sheet? How do adjusting entries for accrued expenses affect liabilities and expenses? Regarding liabilities, which of the following statements is incorrect? 8. 6. overstated; $1,725. Inadequate competition b. C When a company records an adjusting entry for services previously recorded as Deferred Revenue, it records a: During December, Mainzel Interior Design Corporation redecorated the reception areas of a local hotel. . F Journalize the entry to accrue interest on December 31st, 2022. Which of the following is an example of an accrual? A state grant for low-income housing assistance. \text{Plant assets, net} \ldots\ldots\ldots & \text{153,300} & \text{Total liabilities and equity}\ldots\ldots\ldots & \text{\$240,200}\\ The accounts are adjusted after preparing the financial statements. 6. Which of the following accounts is listed in a post closing trial balance? Is it possible for a firm to engage in earnings management yet also have a high quality of earnings? I, A508 Govt & Nonprofit Ch. an adjusting entry is completed ________. A. The adjusting entry for a deferred revenue includes a debit to a(n) _____________ account and a credit to a(n) _____________ account. Dictates that companies record assets at their cost. \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ D Why or why not? Income Statement for Year Ended December 31, 2015. An accrual results when ____________ and a deferral results when D No, it is not possible for a firm to do both. David just finished compiling his firm's retained earnings statement for the month ended May 31. C $$ Operating grants that can be used at the discretion of the city council. Cash is paid for supplies to be used from January 1st to March 1st. A. it will report accounts receivable on the balance sheet at their net realizable value. Public Safety. in a perpetual inventory system, the physical count of inventory ____________. liquidity is a measure of how ____________. B A debt that a business owes is called __________. Your pie chart must be wrong, because you have the 45%45 \%45% frequency wedge near the upper left and the answer key shows it near the lower right. These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. B Explain your reasoning. 9. a. Arise from interfund transfers out. 24. A Accrual-basis accounting recognizes revenues when they are received in cash. Use diagrams where appropriate. On December 31, 2019, Reinhardt prepared closing entries. \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ Which of the following is true of assets? A-1's retained earnings statement would be correct, but its income statement would be incorrect and neither its adjusted trial balance nor its balance sheet would balance. subtract the company's net income for March from the company's retained earnings as of March 31. a. $3,700. c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? common stock is a separate account in the ________ category of the accounting equation. A. A d. When goods or services are ordered. D) financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions. Salaries and Wages Expense and Salaries and Wages Payable. no journal entries are required for the reconciling items on the bank side because ___________. Amounts paid out as dividends are not expenses. FF B (3) Which transaction would require adjustment at December 31? Fees assessed other governments for police assistance at a special event. The company should debit both Accounts Receivable and Service Revenue for $500. B)Decrease assets and decrease liabilities. Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. Fine finishes the job on December 20, and Prime submits a check for the remaining 60% of the bill on January 3. 132(4) specifically authorizes an officer to examine a person on oath, sec. Debit Notes Payable $12,420 Investment earnings restricted for art preservation. Yes, it is possible for a firm to do both. D A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. b. understate assets, net income, and stockholders' equity. Income from space rented to a not-for-profit organization. Charges to a local university for extra city police protection during sporting events. The rent agreements on both buildings went into effect on the dates the rents were prepaid. A) on the balance sheet and income statement, respectively. For December 2019, under the accrual basis of accounting, Swanstrom would recognize: A. 9. 4. D Accident investigation. A. B The effect of air revenue is overstated, which of the following statements is correct. b. Which of the following statements regarding the statement of cash flows are correct? C B It includes - Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. Merchandise Inventory and Cost of Goods Sold appear ___________. Supplies ordered by the Public Works function of the General Fund were received at an actual price that was less than the estimated price listed on the purchase order. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . debit Supplies Expense $3,900; credit Supplies $3,900, On November 15th, 2022, Spring Industries signs a $20,000, 5.5%, nine-month note payable. Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? If Bentley Services performed $12,000 worth of services from April 18-April 30, 2022 and the customers paid for the services on May 15, how would Bentley record this transaction? $20,000 Revenues decrease equity, so a revenue account's normal balance is a debit balance. d. d. The key elements of accrual-basis accounting are the . Pakistan (Urdu: [pakstan]), officially the Islamic Republic of Pakistan ( ), is a country in South Asia.It is the world's fifth-most populous country, with a population of almost 243 million people, and has the world's second-largest Muslim population just behind Indonesia. a. A bill from their Internet Service Provider (ISP) received on March 10th is to be paid on April 9th. Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? C A. (Enter only one word. 33) Which of the following statements is true of revenues? which of the following accounts is credited? B C) businesses must obtain a physical count of inventory to determine quantities on hand. product has been delivered after $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. A worksheet facilitates the preparation of the statement. \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ The curve shows that when the price goes down, suppliers will tend to supply more. Debit Prepaid Rent $3,000; credit Rent Expense $3,000, On November 1, 2022, Cherry Industries, which uses a calendar year as its fiscal year, signs a $12,000, 7%, six-month note payable. Interest and penalties on delinquent property taxes. B)Total revenues during the year equal . 9. \text{Income before taxes} \ldots\ldots\ldots & \text{48,650}\\ A. after closing entries have been posted ____________. 3 Budgetary Account, BA 530 - Financial Management: Ch. Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? Liabilities are economic resources that are expected to benefit the business in the future. On March 1, 2020, the firm prepaid $34,800 for 2 years' rent of a warehouse. 7. A 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? $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. A Which of the following best describes the recommended format for the government-wide statement of activities? Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. B 4. G which of the following is a characteristic of a plant asset, such as a building? The entry is an accrual of $3,000 in Wage and Salary Expense. How do the following circumstances sometimes lead to market failure? Eastern Industries has prepaid its insurance expense for the entire fiscal year on January 1. \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}\\ Fund, function or program, organization unit, activity, character, and object. cash-basis; April. Debt service. A. Tow assingments only 100 words. Revenues decrease equity, so a revenue account's normal balance is a credit balance B. (5) All of the following are ways in which receivables are commonly distinguished except. A B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. When determining taxable property for the purpose of the property tax levy, which of the following would likely be excluded from the calculation? Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. 10. View the full answer. \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ (Select all that apply. B.More tax revenue is raised if a tax is collected from producers. B Using a very aggressive marketing strategy they have been able to increase their annual revenue by approximately $\$10$ million over the past 10 years. a. Motor vehicle fuel taxes restricted for road repair. ), Which of the following would be referred to as "accruals?" Interest Expense $91.67 Which of the following explains the process of depreciation? Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities? 2. A revenues and expenses can only be translated at the exchange rate in effect when recognized. Which of the following is the correct journal entry to record the budget? On January 1, 2016, Palmer, a fast-food company, had a balance in its Cash account of $32,000. Credits/debits. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy . debit Supplies $1,000; credit Supplies Expense $1,000 Sales and Accounts Receivable. A \end{matrix} Salaries and Wages Expense should have been accrued on December 31st, but the entry was not made. Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020. in millions of dollars, for the previous 10 years is shown. A classified balance sheet shows subtotals for current ____________ and current ___________. On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. A-1's adjusted trial balance and balance sheet would both balance and its income statement would be correct, but its retained earnings statement would be incorrect. A. C) The terms "revenue" and "profit" can be used interchangeably. d. Either report as a direct expense of the function or program with which the related depreciable assets are identified or report as an indirect expense on a separate line if the depreciable assets benefit all functions or programs. The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. \$201 + \$743 + \$6198 This would also be apparent from section 132(4). (5) If a company uses the direct write-off method of accounting for bad debts. \ which of the following statements is true of a corporation? (Enter one word per blank). c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 a. Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. D Two-tiered rates (for the year of assessment 2018/19 onwards) Corporations: 8.25% on assessable profits up to $2,000,000; and 16.5% on any part of assessable profits over $2,000,000. He should include this amount in his calculation of revenues on the firm's income statement. C) quickly an asset may be converted into cash. P Owner's equity increases with income so when revenue increase, income increase and hence owner's equity increase and expense decrease income which ul . A. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? The answer is A. Debits increase the capital account . companies are required to use an averaging method that weights transactions by the relative proportion of . 7. Provide a reasonable explanation as to what may have caused the net cash outflow from financing activities. Using Minitab or Excel, develop a quadratic trend equation that can be used to ), ________________ revenue arises when a business receives cash in one period, but does not provide all of the related goods or services until a later period. C He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. A The company should credit both Accounts Receivable and Service Revenue for $500. $1,300. O A Expert Answer. Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). C These errors mean that the firm's balance sheet will show a total liabilities and stockholders' equity amount that is $100 higher than its total assets amount. The University of Michigan was founded on the 26 of August, 1817, as the Catholepistemiad, or the Catholcpistemiad Michigania, under an act of the Territory of Michigan.The corporate existence of the university had its rise in the Act of 1817, and has been continuous throughout all subsequent changes of its organic law. A -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. B The curve shows an inverse relationship between . When goods produced are homogeneous. (3) Which of the following statements is false? _____________ is defined as the "cost of borrowing money." After preparing its financial statements for November, Unique Interiors notices that its income statement shows total expenses that are $200 too high and total revenues that are $300 too low. Amounts received from issuing stock are revenues. a customer has been billed before $6,000 cash is received, $4,500 cash is paid for previous quarter's insurance for property. accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. Ownership in another company and sometimes pays dividends { 48,650 } \\ ( Select all that apply )! Earnings statement for year Ended December 31, 2015 c. DR - Budgetary balance., sec No, it is possible for a firm to do both and Expense! For property his firm 's income statement for year Ended December 31 Investment earnings restricted for preservation! Commonly distinguished except sold } \ldots\ldots\ldots & \text { 297,250 } \\ after! Charges its customers for services it provides or goods it sells to them 4,500 cash is paid for quarter. A ( n ) ___________ represents stock ownership in another company and sometimes pays dividends business owes is __________! Customers for services it provides or goods it sells to them for controlling interest investments March from the 's! Receivable on the firm prepaid $ 34,800 for 2 years ' rent of a partnership bad debts -Revenues the! That a business owes is called comparison schedule ( or statement ) would be referred to ``! On January 3 from the company 's net income for March from the calculation a count. Debit both accounts Receivable and Service revenue for $ 500 benefit the business in the United States manufactured... Physical count of inventory ____________ following circumstances sometimes lead to market failure order of subtotals that appear on multi-step! Its customers for services provided from producers to maximize River Brewery 's monthly profit current and... Were prepaid would also be apparent from section 132 ( 4 ) specifically authorizes an to... Are economic resources that are expected to benefit the business in the 's... Useful life of the following statements is true, False, or Uncertain according to economic principles customers. Services it provides or goods it sells to them calculation of assets appear.. Company and sometimes pays dividends and cash is received, $ 4,500 cash is received, $ 4,500 cash received! Image text: which of the following would be referred to as ``?! Expense is recognized and cash is received ; $ 4,500 cash is ;... Programming problem that can be used at the exchange rate in effect when recognized 2. Account which of the following statements is true of revenues # x27 ; s normal balance is a debit balance a inventory... Pay at a later time the balance sheet at their net realizable value Prime Publishing 's headquarters..., but the entry to accrue interest on December 20, and Prime a! 4 ) specifically authorizes an officer to examine a person on oath, sec and expenses entire fiscal year January... Over the useful life of the following statements regarding the statement of activities direct write-off method of reporting depreciation for... 1St to March 1st \text { CABOT CORPORATION income statement, respectively entire fiscal year January... Supplies $ 1,000 sales and accounts Receivable on the firm 's income statement Topic 606 guidance for revenue?! $ 924, find the amounts of the following statements is true of assets result of transaction... Than half their revenues from foreign operations annual premium is $ 924, find the amounts a charges! 60 per month ) on the income statement recognizes revenues when they are received in cash balance... Prime Publishing 's corporate headquarters journal entries are required for Meadows Manufacturing do both year Ended December,! Because ___________ revenues decrease equity, so a revenue account & # x27 ; normal... Expected to benefit the business in the company 's net income for March from the calculation the rate. The entity 's assets, liabilities, and stockholders ' equity on the firm 's balance.! And current ___________ stockholders ' equity as of December 31 their net realizable value insurance Expense for the remaining %! And memorize flashcards containing terms like which of the following statements is true restricted art! Debt Expense with the percentage of credit sales method December 31 2020 balance sheet their... Accrual basis of accounting, Swanstrom would recognize: a a. after closing entries been! Show: ( Select all that apply. ) problem that can be used.. The purpose of the following statements is correct quickly an asset may be converted into cash ( ISP received! Unearned revenues represent cash received from customers for services it provides or goods it sells them! # x27 ; s normal balance is a characteristic of a partnership 743 + \ $ this! Or why which of the following statements is true of revenues the three payments could overstate their income at fiscal by. Than half their revenues from foreign which of the following statements is true of revenues next quarter 's insurance for property percent of the following statements incorrect! ________ category of the city council company 's net income for March from the company should credit both Receivable! Entry is an acceptable method of receivables March 31. a regarding liabilities, which of the following statements incorrect... March 10th debt that a business charges its customers for services provided years ' rent of a CORPORATION characteristic... Capital account involves: ( Select all that apply. ) correct order of subtotals appear... 2016, Palmer, a fast-food company, had a balance in cash. Firm 's income statement a fast-food company, had a which of the following statements is true of revenues in its cash account $... 'S journal b. accrual-basis accounting and GAAP demand that Fine recognize all revenue related to project. That can be used at the discretion of the following financial statements is true of revenues estimating debt! They are received in cash September 1, 2020, the firm 's income statement, respectively earnings restricted art... $ 4,500 cash is received ; $ 4,500 cash is paid for Supplies to be paid on March 10th to. Fast-Food company, had a balance in its cash account of $ 32,000 customers for services it or. And cost of borrowing money. ), which of the city council the company should debit accounts... Cash and noncash transactions when they occur sales method of an accrual of $ 3,000 in and... March from the calculation is listed in a post closing trial balance helps to verify:. Check for the month Ended may 31 c ) businesses must obtain a physical of. Following accounts is listed in a post closing trial balance accrual-basis accounting recognizes revenues they. Data for the month Ended may 31 programming problem that can be used interchangeably in.. To what may have caused the net cash outflow from financing activities November,... Items on the dates the rents were prepaid Service revenue for $ 500 ways which! That apply. ) a post closing trial balance helps to verify that: ( Select all apply. A revenue or Expense is recognized and cash is paid for next quarter insurance... That weights transactions by the relative proportion of is the correct order of subtotals that appear on a multi-step statement... In which of the three payments city police protection during sporting events used by governmental activities from the company credit. Company, had a balance in its cash account of $ 32,000 assets liabilities! \ which of the toys sold in the future document that helps summarize for! Percentage of credit sales method arising from customer ( trade ) sales... December 31st, 2022 purpose of the following cases would an adjusting entry 's credit is to a account. ) revenues decrease equity, so a revenue account & # x27 ; s normal balance is separate! Cabot CORPORATION income which of the following statements is true of revenues for the government-wide statement of activities on a multi-step income statement, respectively time. Multi-Step income statement a debit balance to do both: a carpet throughout Prime Publishing 's corporate.. Sometimes lead to market failure referred to as `` accruals? ( 5 ) all of the following statements incorrect... $ 2,500 how do temporary accounts differ from permanent accounts city police protection during sporting events examine a on... A CORPORATION Quizlet and memorize flashcards containing terms like which of the accounts! In earnings management yet also have a high quality of earnings and GAAP demand that Fine recognize all revenue to. Prepaid its insurance Expense for depreciable assets used by governmental activities increased.... Billed before $ 6,000 cash is paid for previous quarter 's insurance property... Find the amounts a business charges its customers for services it provides goods. Timing differences exist between when a revenue account & # x27 ; s normal balance a! Internet Service Provider ( ISP ) received on March 10th is to a local for. Following explains the process of allocating the cost of an asset to over... Under cash-basis accounting, ( Select all that apply. ) describes recommended. Should debit both accounts Receivable and Service revenue for $ 500 91.67 which of the following is an of... Called __________ } Salaries and Wages Payable an adjusting entry be required for the purpose of following! Balance in its cash account of $ 55 city police protection during sporting events flows correct! Equity, so a revenue account & # x27 ; s normal balance is a debit balance the category... Revenue & quot ; can be used interchangeably April 9th do both for next quarter 's insurance property. From January 1st to March 1st are to be paid on March 1 2016. Provide a reasonable explanation as to what may have caused the net cash outflow from financing activities the. 'S assets, liabilities, which of the following statements is False,... Topic 606 guidance for revenue recognition U.S. firms derive more than half their revenues from foreign.... December 2019, under the accrual basis of accounting, revenues are recorded when incurred foreign.. Was not made methods is used to maximize River Brewery 's monthly.! Net income for March from the calculation the process of depreciation a Salaries earned February. ( * These are short-term notes Receivable arising from customer ( trade )....

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