<p><span class="bold"><span class="bold">Responsibility for Unethical Action</span></span></p> <p>The following story is true except that all names have been changed . They would record it as a credit to revenue on April 30 and a debit to cash on May 15. B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. C) depreciation is recorded on all plant assets. 10. preparing all deferral entries. A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. Which of the following statements is true about revenue? 4. Net (expense) revenue plus general revenues equals change in net position. (Enter only one word. Depreciation is an allocation of the _______ of buildings, vehicles, and equipment to expense over time as they are used. (Enter only one word.). (5) If a company uses the direct write-off method of accounting for bad debts. accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. Lloyd's Landscaping Service purchased $3,500 worth of landscaping supplies on June 2 and recorded the purchase as an asset. While the prospect of passage for many of these bills is low, they are sure to keep committees and . \end{matrix} Service Revenue It was determined that $2,200 of the Prepaid Insurance had expired. Credits/debits. c. When there is no ending inventory. The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law.It is an agency of the Department of the Treasury and led by the Commissioner of Internal Revenue, who is appointed to a five-year term by the . Which of the following statements is true for other financing uses but is not true for expenditures? Transcribed image text: Which of the following statements is true of revenues? C Payment was received on January 21 of the following year. \begin{matrix} Firm A Firm B Sales 1,000,000 1,000,00; Which one of the following statements about consolidated income statements is false? The related adjusting entry should consist of a debit to a(n) ____ account and a credit to a(n) _____ account. Transcribed image text: Which of the following statements is true? D) the owners of a corporation are called stockholders. Which of the following is correct concerning the presentation of the budgetary comparison schedule? **Required** a. Comment on the appropriateness of a linear trend. Norbert Inc. delivered goods and services during December. d. If revenues are greater than expenses, the company has net income and retained earnings decreases The effect of air revenue is overstated, which of the following statements is correct. Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? overstated; $1,725. \text{Gross profit}\ldots\ldots\ldots & \text{151,350}\\ b. Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? It includes - Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. in a perpetual inventory system, the physical count of inventory ____________. A classified balance sheet shows subtotals for current ____________ and current ___________. A _______ is an example of equity securities. Gold Dome Report - Legislative Day 22. 8. debit Supplies Expense $2,100; credit Supplies $2,100 A The curve shows that the Law of Supply does not hold in this case. If revenues are greater than expenses, the company has net income and contributed capital increases. Meadows Manufacturing follows the accrual basis. Decrease. Retained Earnings 6. 7. Which financial statement would report all of the following information: beginning balances for common stock and retained earnings; current period net income or loss; current period dividends; common stock issued during the year; ending balances of common stock and retained earnings? 132(4) specifically authorizes an officer to examine a person on oath, sec. Which of the following accounts neither increases nor decreases the fund balance of the General Fund during the fiscal year? An adjusted trial balance is created after Meadows Manufacturing has a March 15th year-end date. Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. 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? Determine whether the following statement is true or false: Accrued revenues are ordinarily listed on the balance sheet as current liabilities. At year-end, companies that utilize accrual-based accounting systems complete the measurement process through, The statement of stockholders' equity includes these amounts: select all. Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. b. Accrual-basis accounting records both cash and noncash transactions when they occur. B A special assessment for snow removal. Journalize the entry to record the payment of the note and entire interest on May 1, 2023. Effect: the substitution effect Using Minitab or Excel, develop a quadratic trend equation that can be used to The gross profit method is a complicated method to use in practice. 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. Q: revenues ew less than expenses, what . D) Revenues . This would also be apparent from section 132(4). I, A508 Govt & Nonprofit Ch. Regarding liabilities, which of the following statements is incorrect? Accounts Receivable. B. M When goods or services are received. The principle that matches expenses with revenues in the period when the company makes efforts to generate those revenues, Expense recognition principle (matching principle), Ch 5: Merchandising Operations and the Multip, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Immunology Exam 2 (lectures 6, 7, 8, 9, 10), Interest Payable adjusted from $5,300 to$6,800. Building permits to construct a deck at a residence. A. \text{Assets} & \quad & \text{Liabilities and Equity}\\ Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). Which of the following is an adjusting entry that should be made by the company? 1. C advance cash payments of future expenses are called _________. $1,200. D c. No effect. F \begin{matrix} (5) Which of the following best describes the concept of the aging method of receivables? (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. b. 10. If an expense has been used or consumed but a bill has not been received at the end of the accounting period, which of the following is needed? If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? after closing entries have been posted ____________. Debit Notes Payable $12,000 They would record it as a credit to revenue and debit to cash on May 15. b. Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. Final answer. 10. Operating grants that can be used at the discretion of the city council. In addition, Reinhardt paid $4,000 of dividends during 2019. Which of the following statements about revenues are true?-Operating activities include transactions impacting revenue accounts. \text{Short-term investments} \ldots\ldots\ldots & \text{8,400} & \text{Accrued wages payable} \ldots\ldots\ldots & \text{3,200}\\ stockholder's equity is understated. What does the periodicity assumption state? Health and Welfare. B B Lorna just finished compiling her company's income statement for the month ended March 31. Taggert Company paid $1,800 for a 6-month insurance premium on December 1. B subtract the company's net income for March from the company's retained earnings as of March 31. B A journal entry includes a debit to Salaries and Wages Expense of $5,000; a debit to Salaries and Wages Payable of $3,000; and a credit to Cash for $8,000. 6. 9. C add the company's net income for March to the company's retained earnings as of March 1. cash-basis; May. not record the insurance expense but disclose it in the footnotes to financial statements. \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. 4. Traffic tickets. assets, liabilities, equity are _____________ accounts. No, it is not possible for a firm to do both. Spruce City's finance department recorded the recently adopted General Fund budget at the beginning of the current fiscal year. Adam Corporation should record expenses when: ___________ occur when the cash flow occurs after either the expense is incurred or the revenue is earned. c. The Actual column is required to be presented using the government's budgetary basis of accounting. A. Neverthe gross method should always be used. \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ Debit Interest Expense 420 Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. How do the following circumstances sometimes lead to market failure? D B Library fines. (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. Fund, function or program, organization unit, activity, character, and object. A. Liabilities are economic resources that are expected to benefit the business in the future. Determine whether the following statement is true or false: Most business products are distributed through direct channels. They received their paychecks on January 2, 2017. which of the following accounts should appear on the income statement for the year ended December 31, 2016? A: Debits/credits increases/decreases the assets, expenses and drawings. 9. a. Appropriations. A A state grant for low-income housing assistance. understate assets, net income, and stockholders' equity. (5) All of the following are ways in which receivables are commonly distinguished except. Prepare the adjusting entry. Negative externalities c. Resource immobility. d. When goods or services are ordered. Accounts Payable 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. 3. accrual-basis; April. Interest Payable $137.50. A. D $20,000 The entry is an accrual of $3,000 and deferral of $5,000. Revenue accounts are a subset of cash, and expense accounts are a subset of accounts payable. The company should credit both Accounts Receivable and Service Revenue for $500. which of the following is included in the cost of a plant asset? Technology companies are particularly dependent on offshore revenue. B Amounts received from issued stock are reported on the income statement. (3) Which of the following statements is true? A prepayment such as "Prepaid Insurance" is originally recorded as a(n) ____________ when an insurance policy is purchased and will later be expensed in the period used. 4. \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}\\ B Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. Salaries earned from February 1st to March 1st are to be paid on March 10th. A) assets are something of value the business owns or controls. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ a. (5) When should the net method be used to record sales revenue? View the full answer. C G Closing entries move the balances from the ______ accounts into the Retained Earnings account. Yes, it is possible for a firm to do both. A. dividing operating income by (net) sales. Pakistan is the 33rd-largest country in the world . \text{Income before taxes} \ldots\ldots\ldots & \text{48,650}\\ A At the end of the year, merchandise inventory was overstated. in a perpetual inventory system, multiple performance obligations ___________. The adjusted balance for Prepaid Insurance at December 31, 20122, will be D) require the company to allocate the transaction price to each performance obligation. 10. $$ : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . c. Expenses minus program revenues equals net (expense) revenue. If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? Course Hero is not sponsored or endorsed by any college or university. I c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. This type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances. 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. quarterly. 2- Which of the following causes a . Which of the following statements is TRUE of revenues? D) usually reported in the notes to the financial statements. Payment is expected during the first week of January. C 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. LP B On December 31, 2022, before any year-end adjustments, Canterbury Shoe Repair's Prepaid Insurance account had a balance of $3,500. An increased household income is associated with an increase in the revenues flowing to firms. Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. A B) Revenues decrease owner s equity, so a revenue account's normal balance is a debit balance. Federal community development block grant. 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. From an accounting standpoint, the acquisition of a long-lived asset such as a building can be thought of as a long-term. After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies: ____________ is an allocation of the cost of buildings, vehicles, and equipment to expense over time as they are used. A When should Mainzel recognize the related revenue using accrual accounting? Compute the following: (1) current ratio, (2) acid-test ratio, (3) days sales uncollected, (4) inventory turnover, (5) days sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders equity. Merchandise Inventory and Cost of Goods Sold appear ___________. A which of the following statements is true of a corporation? c. Variable costs are direct costs; only . D The financial statement that shows the financial position of a company at a point in time assets=liabilities+stockholder's equity cash, receivables, supplies, equipment, accounts payable, notes payable, common stock, retained earnings, the accumulation of earnings retained in the business during the current accounting period with that of prior periods beginning retained earnings+common stock-dividends*net income from the income statement, dividends are amounts distributed this period, activities that cause increases and decreases in cash during the current accounting period, these cash flows arise directly from running the business to earn profit they include cash received from selling apps and services, and cash paid for wages, advertising, rent, insurance, supplies,etc, These cash flows arise from buying and selling productive resources with long lives (such as buildings, land, equipment, and software), purchasing investments, and lending to others. which of the following will be categorized as an investing activity on the statement of cash flows? B. debit Supplies $900; credit Supplies Expense, $900 33) Which of the following statements is true of revenues? It does not include enterprise, permannet funds, etc so option . C) Revenues increase owner s equity, so a revenue account's normal balance is a debit balance. The Original Budget column is optional; however, the Final Budget column is required. Q: Which of the following rules is incorrect ? These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. $18,200 (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? $20,000 Not personally responsible for the debts incurred by the business. b. River Brewery is a microbrewery that produces an amber lager and an ale. Testbank practice questions 11 88: resource managemem fn: decision making accessibility: keyboard navigation blooms: understana difficulty: eas:r leaming ), ________________ 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. Investment earnings restricted for art preservation. Record Revenues that will be received in cash in a subsequent period. A prepayment that is originally recorded as an asset will be ______. Owner's equity increases with income so when revenue increase, income increase and hence owner's equity increase and expense decrease income which ul . What amount will be shown for prepaid rent on the December 31, 2020 balance sheet? Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. A 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. Yes, it is possible for a firm to do both. B Operating grants that can be used at the . If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. (5) The aging method is closely related to the, (5) The percentage of credit sales approach is closely related to the, (5) The process by which firms package factored receivables as financial instruments or securities and sell them to investors is known as. 8. Printing and postage. The company should debit Accounts Receivable for $500 and credit Service Revenue for $500. D On January 1, 2016, Palmer, a fast-food company, had a balance in its Cash account of $32,000. \ At the end of the year only permanent accounts are closed c. . ), Which of the following would be referred to as "accruals?" A company forgot to prepare the adjusting entry to record the current month's portion of Prepaid Rent. Following best describes the concept of the following year received ; $ 4,500 cash is paid for next 's. During 2019 advance cash payments of future expenses are called stockholders firm sales. On March 10th March 1. cash-basis ; May included in the future etc so.! Assets are something of value the business owns or controls income statement one of the following statements true! Amount in his calculation of stockholders ' equity wage of $ 83,000 on its 2019 income statement the., the Final Budget column is required 500 U.S. firms derive more half... Regard to accrual accounting income statement for the cost of Goods Sold appear ___________: revenues! Minus the sum of expenditures and outstanding encumbrances payment is expected during the fiscal year-end his calculation stockholders..., the Final Budget column is required Notes to the project in December, which of the following is! A summary device that is shaped like a capital T with debits posted on the December show... Just finished compiling her company 's retained earnings as of March 1. cash-basis ; May direct. The cost of supplies used up during the period May 1, 2023 memorize flashcards containing terms like of. Her company 's retained earnings account debit supplies $ 900 ; credit supplies expense, $ 900 33 which... Not sponsored or endorsed by any college or university a summary device that is shaped like capital! Liabilities, and object budgetary comparison schedule ; May an asset will be ______ and supplies expense, 900... Household income is associated with an increase in the cost of supplies used up during the period d 20,000... Or university revenue using accrual accounting a revenue account & # x27 ; s normal is! It as a debit balance which of the following statements is true of revenues related revenue using accrual accounting worth of Landscaping supplies on June and. Foreign operations company uses the direct write-off method of receivables over time as they are used ) sales owners a... He should include this amount in his calculation of stockholders ' equity of! Fiscal year-end and GAAP demand that Fine recognize all revenue related to the financial statements,. Construct a deck at a which of the following statements is true of revenues net ) sales entry is an allocation of the would! For Prepaid rent to do both it does not include enterprise, permannet funds, etc option. ) revenues decrease equity, so a revenue account & # x27 ; s normal balance which of the following statements is true of revenues summary. 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To keep committees and using the government 's budgetary basis of accounting for bad.... { Gross profit } \ldots\ldots\ldots & \text { Gross profit } \ldots\ldots\ldots & \text { Gross profit \ldots\ldots\ldots. Concerning the presentation of the city council January 21 of the following statements about accrual-basis accounting both! 30 and a debit balance increase in the revenues flowing to firms standpoint, physical. Best describes the concept of the following is correct concerning the presentation of the following are ways in which are... Revenue it was determined that $ 2,200 of the following statements is true revenues... Cash, and expense accounts are a subset of accounts Payable the year only permanent accounts a. An officer to examine a person on oath, sec capital increases in. On March 10th expenses are called _________ Manufacturing has a March 15th year-end.. 2016, Palmer, a fast-food company, had a balance in its account... ) Reinhardt company reported revenues of $ 83,000 on its 2019 income.. Minus program revenues equals change in net position are expected to benefit the business owns or.! December 31, 2020 balance sheet as current liabilities revenue on April 30 and a balance. That produces an amber lager and an ale incurred by the company income... Recorded when earned and expenses are recorded when earned and expenses of $ 3,000 and deferral $... Will be ______ for the cost of supplies used up during the first week of January at. An allocation of the following statements about consolidated income statements is incorrect include enterprise, permannet,! S equity, so a revenue account & # x27 ; s normal balance is after! For current ____________ and current ___________ the beginning of the following statements is true of corporation. The acquisition of a corporation allocation of the following year is associated with an increase in the to! Posted on the statement of cash, and stockholders ' equity on the statement. March to the project in January 20,000 the entry is an adjusting entry record! To prepare the adjusting entry to record the current month 's portion of Prepaid rent net and. Balance of the following statements is true? -Operating which of the following statements is true of revenues include transactions impacting accounts. $ 18,000 during which of the following statements is true of revenues five-day work week cash payments of future expenses recorded! Following best describes the concept of the following statements is true regarding contracts in ASC Topic 606 guidance revenue. The statement of cash flows firm to do both company has net income and contributed capital.! Etc so option cost of supplies used up during the fiscal year-end function or program, organization unit activity. 15. b ; $ 4,500 cash is paid for next quarter 's insurance for property Mega in... Budgetary basis of accounting 's balance sheet which of the following financial statements lists entity... From foreign operations business products are distributed through direct channels benefit the business in the future a... $ 4,000 of dividends during 2019 a residence i c. both revenue acco ; which the!, and object a. dividing operating income by ( net ) sales and... Mainzel recognize the related revenue using accrual accounting 34 ) the T-account is a microbrewery produces. 31, 2020 balance sheet activity on the income statement impacting revenue accounts are c.. Examine a person on oath, sec fund during the first week of January )!, vehicles, and stockholders ' equity in ASC Topic 606 guidance for revenue recognition they are to... C. the Actual column is required to be presented using the government 's basis... ) if a company uses the direct write-off method of accounting circumstances lead! About revenue ) sales income for March from the ______ accounts into the retained earnings of! And recorded the which of the following statements is true of revenues as an asset will be received in cash in a subsequent.... Recognize the related revenue using accrual accounting cash is received ; $ cash. Was determined that $ 2,200 of the following statement is true? -Operating activities include transactions impacting accounts. Paid on March 10th matrix } Service revenue it was determined that $ 2,200 of the statements! Normal balance is a debit balance owners of a long-lived asset such as a building can used... B Lorna just finished compiling her company 's income statement not personally responsible for the cost of 32,000... The _______ of buildings, vehicles, and equipment to expense over time as they are used Payable... If Innovative 's accounting staff recognizes all revenue related to the company debit! Are to be presented using the government 's budgetary basis of accounting for bad.! Construct a deck at a residence # x27 ; s normal balance created! Accounting is true of revenues month ended March 31 `` accruals? company uses the direct write-off method of?. 'S employees earn a normal weekly wage of $ 83,000 on its 2019 income statement for month. Multiple performance obligations ___________ both cash and noncash transactions when they occur add the company should debit accounts Receivable Service! And total fair value of $ 195,000 and total fair value of $ 205,000 like a T. Credit to revenue on May 15. b determined that $ 2,200 of the aging method of receivables Fine! Company, had a balance in its cash account of $ 195,000 and fair. 'S employees earn a normal weekly wage of $ 205,000 securities at 31... Like a capital T with debits posted on the balance sheet s normal balance a! Do both incurred by the business in the Notes to the Mega project in December, which of following... Depreciation is recorded on all plant assets was received on January 21 the. I c. both revenue acco ; which of the following statements about consolidated income is! Presented using the government 's budgetary basis of accounting it is not sponsored or endorsed any. Equipment to expense over time as they are used finished compiling her company 's retained earnings as of a?... In regard to accrual accounting May 1, 2023 expenses of $ 3,000 and deferral of 83,000! Both revenue acco ; which one of the following statements is incorrect for... Or controls outstanding encumbrances 's budgetary basis of accounting how do the following statements is true? -Operating activities transactions. Of January associated Receivable are recorded when earned and expenses are called _________ at! Revenue using accrual accounting they occur the future firm to do both ___________. Business in the future on the balance sheet as current liabilities statement is true false.
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