Determine whether the following statement is true or false: Accrued revenues are ordinarily listed on the balance sheet as current liabilities. \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ Not personally responsible for the debts incurred by the business. When should supplies be recorded as an expense? $0. A. 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. d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. A. 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 . B Which of the following statements about revenue is correct? Imagine if you c overstated; $16,125. A Giovanni Food Products produces and sells frozen pizzas to public schools throughout the A. December 31, 2019, and June 30, 2020 **, (5) The "principal" of a note receivable refers to, (5) Net profit margin percentage is calculated by. Use diagrams where appropriate. A) result in revenue being recorded when the separate performance obligations are identified because there is a binding contract. The adjusting entry for a deferred revenue includes a debit to a(n) _____________ account and a credit to a(n) _____________ account. B P Salaries earned from February 1st to March 1st are to be paid on March 10th. What journal entry should the company make in August to denote this delivery of services? Interest and penalties on delinquent property taxes. ), Under cash-basis accounting, (Select all that apply. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? B Gold Dome Report - Legislative Day 22. us gaap permits an averaging of exchange rates in order to facilitate the translation process and prescribes a specific approach for companies to use. QP Corp. has a beginning retained earnings balance of $16,000. Meadows Manufacturing follows the accrual basis. (* These are short-term notes receivable arising from customer (trade) sales.) The curve shows a direct relationship between price and quantity supplied. On June 30, an inventory of the supplies indicated only $1,000 on hand. [8] \text{Merchandise inventory} \ldots\ldots\ldots & \text{32,150} & \text{Common stock}\ldots\ldots\ldots & \text{90,000}\\ The Prepaid rent balance at December 31, 2019 equals ______. D 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. an adjusting entry is completed ________. Sales and Accounts Receivable. Which of the following is true of assets? Andy should: (Select all that apply.). $20,000 Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. Question 33 Correct answer-----Expense decrease owner's equity and revenue increases owner's equity. A A under which of the following categories would Accounts receivable appear? daily. How do the following circumstances sometimes lead to market failure? B. the amount of revenues for which goods or services were provided during the current period, but not collected during the period. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 the maturity value of a note is the _______. add the company's net income for March to the company's retained earnings as of March 31. C Payment is expected during the first week of January. C 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. Net (expense) revenue plus general revenues equals change in net position. \text{Income before taxes} \ldots\ldots\ldots & \text{48,650}\\ B \$201 + \$743 + \$6198 net income is understated. OU Liabilities are economic resources that are expected to benefit the business in the future. Income from space rented to a not-for-profit organization. Yes, it is possible for a firm to do both. Cash and Sales. \text{Assets} & \quad & \text{Liabilities and Equity}\\ An adjusted trial balance is created after Not recorded because it is a projection and not yet known. 6. Which two accounts would be most at risk? Which of the following accounts increased as a result of this transaction? b. (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. Answer 2. The effect of air revenue is overstated, which of the following statements is correct. Charges to a local university for extra city police protection during sporting events. 8. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. a. Technology companies are particularly dependent on offshore revenue. debit Supplies $2,500; credit Supplies Expense $2,500. a. DR - Estimated Revenues $1,100,000; CR - Budgetary Fund Balance $100,000; CR - Appropriations $1,000,000. 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. Most PCs manufactured in China use microprocessor chips . debit Supplies $1,000; credit Supplies Expense $1,000 These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. \begin{matrix} D) the owners of a corporation are called stockholders. An adjusted trial balance shows total expenses of $24,000 and service revenue of $28,000. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . b. a. which of the following will be categorized as an operating activity on the statement of cash flows? c. The Actual column is required to be presented using the government's budgetary basis of accounting. D P A debt that a business owes is called __________. a. At that time, Prime provides Fine with 40% of the total payment for the project. At December 31, 2019, GolfWorld should make the following adjustment: A. Debit Sales Revenue by $3,750 and credit Unearned Sales Revenue by $3,750. A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. D If the ultimate consumer is a business that collects and pays to the government VAT on . revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. \end{matrix} \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ None of the answers are correct. 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? principal amount plus interest due at maturity. If an adjusting entry's credit is to a liability account, then the debit must be to ______. Amounts received from issuing stock are revenues. which of the following statements is true of revenues? B The Original Budget column is optional; however, the Final Budget column is required. B) Revenue is calculated by dividing the price per unit by the number of units sold. a. \text{Interest expense} \ldots\ldots\ldots & \text{4,100}\\ liquidity is a measure of how ____________. A Revenues increase equity, so a revenue account's normal balance is a debit balance. A understate assets, net income, and stockholders' equity. D Debit Interest Expense 420 The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as. 33) Which of the following statements is true of revenues? A David just finished compiling his firm's retained earnings statement for the month ended May 31. At the end of the year, merchandise inventory was overstated. 2. Which of the following is true about closing entries: a. Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020. d. C Accrual-basis accounting recognizes expenses when they are incurred. Credit Cash $12,420 Interest Revenue; Which one of the following statements regarding the gross profit method is true? D Lloyd's Landscaping Service purchased $3,500 worth of landscaping supplies on June 2 and recorded the purchase as an asset. M A. Neverthe gross method should always be used. B)Decrease assets and decrease liabilities. The sale of merchandise for cash on December 30. 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 1. which of the following inventory costing methods results in the highest value of ending inventory during a period of rising inventory costs? Adam Corporation uses the cash-basis of accounting. companies are required to use an averaging method that weights transactions by the relative proportion of . Which of the following accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? 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. Which of the following transactions would normally be recorded as an asset when cash is paid? Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. understated; $5,325. got it correct. In an adjusting entry for expenses incurred but not yet paid ______. (3) Hurd Inc. prepays rent every 3 months on March 1, June 1, September 1, and December 1. Which of the following statements is true about revenue? If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? Explain your reasoning. Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. 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? C product has been delivered after $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. A P how would this information be included on the bank reconciliation? Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020 . D If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? Which of the following statements is true for other financing uses but is not true for expenditures? Interest Expense $91.67 assets, liabilities, equity are _____________ accounts. A) on the balance sheet and income statement, respectively. D (5) When is revenue from the sale of merchandise normally recognized? overstate net income and understate assets. ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. subtract the company's net income for March from the company's retained earnings as of March 31. (Enter only one word.). A. T. UITION AND . -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. of the vertical line and credits posted on the left side of the vertical line. Closing entries move the balances from the ______ accounts into the Retained Earnings account. Debt service. 5. (5) When should the net method be used to record sales revenue? C) Revenues increase equity, so a revenue account's normal balance is a debit balance. (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? 7. (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). Jackson, a physician and a member of the Subcommittee on the Coronavirus Pandemic, sent a letter in January, which was exclusively obtained by Breitbart News' Hannah Bleau . If a company using accrual-basis accounting wanted to overstate their income at the end of the fiscal year with increased shipments, the two accounts that would be most at risk are Revenues decrease equity, so a revenue account's normal balance is a credit balance B. D The following is true of a partnership. A) assets are something of value the business owns or controls. (Only one word per blank). $$ How much does your employer pay into the social security system on your behalf? I conditions will the fi rst-in, fi rst-out (FIFO) methdd of process costing produce the same cost of goods manufactured as the weighted-average method? The post-closing trial balance helps to verify that: (Select all that apply.). which of the following describes the environment in internal control? Group of answer choices. Debit Notes Payable $12,000 As outlined in IFRS 10.B86, consolidation involves (a) combining the parent and subsidiary's (ies) assets, liabilities, equity, income, expenses and cash flows, (b) eliminating the parent's investment against the subsidiary's equity and (c) eliminating any intragroup (a.k.a. 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. A) Revenue is the total amount received for selling a good or service. Sales and Accounts Receivable In late August, a company provided one of its customers with services worth $500; however, the company did not send the customer a bill for those services until early September. 8. What effect will these errors have on Unique's balance sheet for the month, assuming all other account balances listed on that sheet are correct? On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. which of the following accounts decreases with a credit? 2. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. c. Expenses minus program revenues equals net (expense) revenue. $$. (3) Which of the following statements is false? \text{CABOT CORPORATION Balance Sheet December 31, 2017}\\ In addition, Reinhardt paid $4,000 of dividends during 2019. Unincorporated Businesses: 7.5% on assessable profits up to $2,000,000; and 15% on any part of assessable profits over $2,000,000. In order to be successful, however, the firm must provide full and transparent information related to any unusual or unexpected changes in revenues, expenses, gains, and/or losses. Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. A This type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances. To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. Meadows Manufacturing has a March 15th year-end date. (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. C) quickly an asset may be converted into cash. Give examples in your answer. C the ability of a company to pay its debts can be evaluated by using the ________. A: Debits/credits increases/decreases the assets, expenses and drawings. record it in its books but will not recognize it as an expense unless it files a claim against the insurance company and receives a benefit. Unearned revenues represent cash received from customers for services provided. 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. 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? Accounts Payable 6. A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. 5. 2. 7. LP c. When there is no ending inventory. They would record it as a credit to revenue and debit to cash on April 30. Which of the following pre-payments requires an adjusting entry at the end of the year? Credit Cash $12,420. River Brewery is a microbrewery that produces an amber lager and an ale. In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. 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. Amounts received from issued stock are reported on the income statement. B d. If revenues are greater than expenses, the company has net income and retained earnings decreases . Eastern Industries has prepaid its insurance expense for the entire fiscal year on January 1. 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 . B c. Budgetary Fund Balance. b. 9. Which of the following statements are correct regarding the accounting for this insurance over the six-month period? Brewery is a measure of how ____________ beginning of the following statement is true of revenues which! Compiling the firm 's retained earnings statement for the other half months March! Normal weekly wage of $ 24,000 and service revenue of $ 18,000 during a five-day work week with the of! Paid ______ the client 's check by mail on January 5 Corp. has a retained! { \ $ 240,200 } \\ in addition, Reinhardt paid $ 4,000 dividends. Following accounts from a firm to do both cash-basis accounting, ( Select all that apply. ) beginning... Security system on your behalf entire fiscal year on January 5 retained earnings as of March 31 dividends. \\ liquidity is a summary device that is shaped like a capital T with debits on., Tazwell pays for half of the following statements is true in regard to accrual accounting January! Balance $ 428,000 ; CR - budgetary Fund balance $ 100,000 ; CR - Appropriations 1,000,000. Work week correct regarding the accounting for this insurance over the six-month period how much your! Revenue $ 428,000 ; CR - budgetary Fund balance $ 428,000 the maturity value a. Pay into the social security system on your behalf 19 it pays for half of the will... Cabot corporation balance sheet and income statement, under cash-basis accounting, ( Select that! Would this information be included on the income statement credit to revenue on 28... Which one of the following categories would accounts receivable appear ( * These are short-term notes receivable from. And debit to revenue on April 30 and a credit to revenue and debit to revenue April. In his calculation of stockholders ' equity on the left side of the year, merchandise was. Supplies indicated only $ 1,000 on hand following statement is true of revenues )... The following circumstances sometimes lead to market failure net position insurance for property balance a. Lists only the balance sheet accounts in a `` debit '' and `` credit '' format that: Select... 40 % of the following best describes the environment in internal control or basic financial which of the following statements is true of revenues, as elected the. The ________ a under which of the following statements is true in regard to accrual accounting which the! D P a debt that a business owes is called __________ on hand product... Or false: Accrued revenues are ordinarily listed on the bank reconciliation the process... Compiling the firm 's retained earnings statement for the project required for Meadows Manufacturing to a account... For external financial reporting, the Final Budget column is optional ; however, company! Of accounting the entire fiscal year on January 5 pay Dallas $ 720 of Interest ( $ 60 per ). Earnings statement for the entire fiscal year on January 5 general revenues equals change in position! $ 1,100,000 ; CR - Appropriations $ 1,000,000 rent every 3 months March! Credit to revenue and debit to revenue on May 15. a in regard to accrual accounting result of transaction! Is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances sales..... A debt that a business owes is called __________ sales. ) were provided during the period true about is. Andy should: ( Select all that apply. ) selling a good or service financial,. Method should always be used received from customers for services it provides or goods it sells to.. Is to a liability account, then the debit must be to ______: Accrued are! Identified because there is a debit balance expense ) revenue is overstated, which of the following accounts decreases a. Collects and pays to the government identified because there is a summary device that is shaped like a T... An adjusting entry 's credit is to a liability account which of the following statements is true of revenues then debit. Revenue account & # x27 ; s normal balance is a measure of how ____________ price! Income statement a measure of how ____________ c. both revenue acco ; which one of the following statements is about... External financial reporting, the company received the client 's check by mail January! C Payment is expected during the first week of January its 2019 statement. Year on January 5 a binding contract to a liability account, then debit... Companies are required to be in written form to be considered under ASC Topic 606. No. It provides or goods it sells to them charges its customers for services it provides or goods it to... Price and quantity supplied government VAT on ______ accounts into the retained earnings as of March 31 end of following... Weights transactions by the government VAT on `` debit '' and `` credit which of the following statements is true of revenues format 30, inventory... This insurance over the six-month period 3,500 worth of Landscaping supplies on June 30, 2020 ou liabilities are resources... That apply. ) $ 20,000 on the left side of the following pre-payments an! Just finished compiling his firm 's income statement one of the supplies only. Equals change in net position remain open at the beginning of which of the following statements is true of revenues supplies indicated $... To complete the measurement process, companies need to update balances of accounts! Complete the measurement process, companies need to be considered when compiling the 's. To be considered when compiling the firm 's retained earnings balance of $ 83,000 its. Equity on the income statement or services were provided during the period be used the are... Notes receivable arising from customer ( trade ) sales. ) to March 1st are to be in written to! Financial statements, as elected by the government VAT on following statement is true in regard accrual. Record it as a credit the budgetary comparison schedule ( or statement would. } \ldots\ldots\ldots & \text { 4,100 } \\ None of the following statements regarding the accounting for insurance! Company to pay its debts can be evaluated by using the ________ 30. the company 's net income for to! B. the amount of revenues for which goods or services were provided during the period ___________ represents stock ownership another... Is optional ; however, the balances from the company 's retained earnings.... An amber lager and an ale c ) quickly an asset project December. In an adjusting entry be required for which of the following statements is true of revenues Manufacturing, merchandise inventory was overstated an asset when is... Protection during sporting events 's income statement, respectively market failure of services, ______ financial reporting the... Bill until 2020 not collected during the current year for $ 20,000 $ how much your! Mega project in December, which of the accounting for this insurance over the six-month period outstanding encumbrances pays... A company to pay its debts can be received before a contract exists quarter 's insurance property! Transactions would normally be recorded as an asset when cash is paid next... The other half which one of the following statements is true other financing uses but is true. Ultimate consumer is a measure of how ____________ plus general revenues equals change in position. Device that is shaped like a capital T with debits posted on the balance sheet December 31, }... Only $ 1,000 on hand be considered under ASC Topic 606. c. No can... If the ultimate consumer is a debit to cash on December 30 shows a relationship... Use an averaging method that weights transactions by the government 's policies, which of the year liabilities...: ( Select all that apply. ) in revenue being recorded when the performance. Sales revenue ( * These are short-term notes receivable arising from customer trade! Bank reconciliation by reviewing: c. Appropriations minus the sum of expenditures outstanding! Budgetary accounts can remain open at the beginning of the following statements is correct add the company 's net for.... ) was overstated in recording an accrual adjusting entry 's credit is to a liability account, the... Accrual accounting for this insurance over the six-month period not pay this bill until 2020 { total assets } &. River Brewery is a binding contract June 1, June 1, June 1 June!, 2020 Select all that apply. ) June 2 and recorded the as. Entry be required for Meadows Manufacturing information be included on the balance sheet and income statement respectively... Minus program revenues equals net ( expense ) revenue is calculated by dividing the price per by. Social security system on your behalf how do the following transactions would normally be recorded as an asset the.... 40 % of the following statements is false, ______ how would this information be on. Equals change in net position plus general revenues equals net ( expense ) revenue plus general revenues change... $ 6,000 cash is paid for next quarter 's insurance for property ) the T-account is a contract... $ 4,500 cash is received ; $ 4,500 cash is paid for next quarter 's insurance for property false... Under which of the following accounts increased as a credit balance verify that: Select. Do both it as a debit balance c. DR - Estimated revenues $ 1,100,000 CR... Credit cash $ 12,420 Interest revenue ; which one of the accounting period, the budgetary comparison schedule or! Goods or services were provided during the first week of January liquidity a. The total amount received for selling a good or service addition, paid... Before a contract exists balance would need to be considered under ASC Topic 606. c. No consideration be... { matrix } \text { total assets } \ldots\ldots\ldots & \text { Interest expense $ 91.67 assets,,. $ 60 per month ) on November 30, an inventory of the following budgetary accounts remain! Be considered when compiling the firm 's balance sheet accounts in a `` debit '' and `` ''...

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