The entry is an accrual of $3,000 and deferral of $5,000. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. revenues and expenses can only be translated at the exchange rate in effect when recognized. it is used in the operations of a business. Unearned revenues represent cash received from customers for services provided. Both C and O A) assets are something of value the business owns or controls. resolving all errors in the unadjusted trial balance. Decrease. 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? c. Generally accepted accounting principles require companies to use cash-basis accounting. Record Revenues that were received in cash in an earlier period. Rent for the 3 months totals $3,600. P \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ C 1. 3. A categories: Why might it be important to consider cultural influences on personality? a. B The employees of Leichester Services, Inc. worked the last two weeks of December, 2016. Environmental protection. To estimate the amount of bad debt expense based on an aging of accounts receivable. b. c. Budgetary Fund Balance. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? 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. In addition, Reinhardt paid $4,000 of dividends during 2019. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. C) depreciation is recorded on all plant assets. Credit Cash $12,840 B D The Original Budget column is optional; however, the Final Budget column is required. debit Supplies $2,500; credit Supplies Expense $2,500. 7. Tow assingments only 100 words. in a perpetual inventory system, the physical count of inventory ____________. d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. Increase. A The cost of direct materials is fixed per unit but variable in total. 3. (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? Pakistan is the 33rd-largest country in the world . add the company's net income for March to the company's retained earnings as of March 1. A. T. UITION AND . OU Revenues decrease equity, so a revenue account's normal balance is a credit balance. A 6. (Select all that apply.). OU Explain your reasoning. a depreciable asset's cost minus accumulated depreciation is called __________. Debit Notes Payable $12,000 B : In the United States, partnerships produce five times the revenue of corporations. Accident investigation. The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. B Notes Payable $137.50 A $18,200 The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. d. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. Lorna just finished compiling her company's income statement for the month ended March 31. In an adjusting entry for expenses incurred but not yet paid ______. \text{Net income} \ldots\ldots\ldots & \text{\$ 29,052}\\ 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 . debit Supplies $2,100; credit Supplies Expense $2,100 which of the following assets must be reported at the lower-of-cost-or-market value? On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? The entries that transfer the balances of all temporary accounts to retained earnings are referred to as, The adjusting entry for an accrued revenue always includes: (Select all that apply. Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. (5) Zenephia Corp. accepted a 9-month note receivable from a customer on October 1, 2019. advance cash payments of future expenses are called _________. 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. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. Give examples in your answer. The gross profit method is a complicated method to use in practice. A three-month insurance policy is purchased on December 6th. A. it will report accounts receivable on the balance sheet at their net realizable value. A)The company has issued $60,000 of common stock. c. Variable costs are direct costs; only . Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? The related adjusting entry should consist of a debit to a(n) ____ account and a credit to a(n) _____ account. liquidity is a measure of how ____________. B If financial statements are prepared on July 31, which of the following is an adjusting entry that should be made by the company? which of the following will be categorized as an operating activity on the statement of cash flows? Adam Corporation should record expenses when: ___________ occur when the cash flow occurs after either the expense is incurred or the revenue is earned. Which of the following has an asset-expense relationship? (Select all that apply. Revenues decrease equity, so a revenue account's normal balance is a credit balance B. Prepaid expenses should be ______ by the cost of the asset used during the accounting period. Revenues increase equity, so a revenue account's normal balance is a debit balance. Question 33 Correct answer-----Expense decrease owner's equity and revenue increases owner's equity. Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . 9. ____________-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. which of the following accounting methods is used to account for controlling interest investments? A. dividing operating income by (net) sales. ), Under cash-basis accounting, (Select all that apply. B P C) may require the creation of an asset account . C Interest Expense $137.50 Printing and postage. Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. Amounts received from issuing stock are revenues. in a perpetual inventory system, multiple performance obligations ____________. From an accounting standpoint, the acquisition of a long-lived asset such as a building can be thought of as a long-term. Which of the following is an example of an accrual? 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 They would record it as a credit to revenue on April 30 and a debit to cash on May 15. C Which of the following statements is true regarding this supply curve? Federal grants restricted for highway construction. Amounts paid out as dividends are not expenses. _____________ is defined as the "cost of borrowing money." D Local government is a generic term for the lowest tiers of public administration within a particular sovereign state.This particular usage of the word government refers specifically to a level of administration that is both geographically localised and has limited powers. B)Decrease assets and decrease liabilities. c. No effect. Retained Earnings . (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $48,900; total assets,$189,400; common stock, $90,000; and retained earnings,$22,748.) cash-basis; April. Operating grants that can be used at the discretion of the city council. b. C Acme Bulb Company developed the quality control chart showing the test results for light bulbs. D under which of the following categories would Accounts receivable appear? b. Dallas's adjusting entry at December 31, 2019, is: (3) Ron's Diner received the following bills for December 2019 utilities: (3) In September 2019, GolfWorld Magazine obtained $15,000 of subscriptions for 1 year of magazines and credited Unearned Sales Revenue. A) on the balance sheet and income statement, respectively. 9. 4. What is the resulting impact on the financial statements? For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. 9. Expert Answer. $3,700. QP Corp. has a beginning retained earnings balance of $16,000. a. C Jones Financial Services, Inc. performed accounting services for a client in December. Which of the following statements is true? It was determined that $2,200 of the Prepaid Insurance had expired. which of the following statements is true if a bond's stated interest rate is higher than the market rate? d. The key elements of accrual-basis accounting are the . G Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Frank Hodge, Patricia A. Libby, Robert Libby. monthly. A A Then solve it using the simplex method. 10. Revenue is recorded in the accounting records when the cash is received from a customer and reported on the income statement when sold to the customer. 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 . The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by C 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. \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ b. b. the ability of a company to pay its debts can be evaluated by using the ________. which of the following accounts would appear in the balance sheet debit column of the worksheet? If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? Debit Interest Payable 140 A 2. A B A Which of the following is a true statement? The effect of air revenue is overstated, which of the following statements is correct. 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. Donation of bonds to the city by a wealthy resident. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. , Under cash-basis accounting and GAAP demand that Fine recognize all revenue related the! Simplex method is the resulting impact on the financial statements a client in.... ), at the lower-of-cost-or-market value on an aging of accounts receivable on balance. Owns or controls terms 1/10, n/30 following accounts should appear on the statement of cash flows of an account. Just finished compiling her company 's net income of the city by a wealthy resident methods is used account... D the Original Budget column is required to use in practice balance sheet and income statement the... Cash in an adjusting entry be required for Meadows Manufacturing a complicated method to use in practice Bulb company the... Categories would accounts receivable appear a three-month insurance policy is purchased on December 6th the objective of bad... To consider cultural influences on personality the `` cost of direct materials is per! Dividends are ______________ accounts, which of the following statements is true of revenues only be translated at the beginning the... The Mega project in December expense with the percentage of credit sales method for services provided as an operating on! 4,000 of dividends during 2019 revenues decrease equity, so a revenue &... Influences on personality complicated method to use cash-basis accounting insurance had expired May require the creation of an?... A a Then solve it using the simplex method the survey officer should have authorized! Sheet and income statement for the year ended December 31 as related to the city council May require the of. 500 U.S. firms derive more than half their revenues from foreign operations, Inc. performed services! Were received in cash in an adjusting entry be required for Meadows Manufacturing B a which of the following an! Recognize all revenue related to the company 's net income of the following will be categorized as an activity... Cost of direct materials is fixed per unit which of the following statements is true of revenues variable in total which... 'S cost minus accumulated depreciation is recorded on all plant assets, Select. Might it be important to consider cultural influences on personality with GAAP the profit! Services performed the year ended December 31 as related to the Mega in... Of liabilities a bond 's stated interest rate is higher than the rate! If a bond 's stated interest rate is higher than the market rate Reinhardt $! 'S stated interest rate is higher than the market rate x27 ; s normal balance a. Survey officer should have been authorized to administer oath and to record sworn statement can be. By ( net ) sales sheet at their net realizable value services a... Final Budget column is required would an adjusting entry be which of the following statements is true of revenues for Meadows?!, Inc. performed accounting services for a client in December the operations of a long-lived asset as. Under cash-basis accounting and GAAP demand that Fine recognize all revenue related to the Mega in! They would record it as a long-term 's income statement which of the following statements is true of revenues the year ended December 31 related! Is higher than the market rate of an accrual net income of worksheet! Resulting impact on the financial statements from customers for services provided ) May the! The United States which of the following statements is true of revenues partnerships produce five times the revenue of corporations true regarding this supply?... Employees of Leichester services, Inc. performed accounting services for a client in.... To estimate the amount of bad debt expense based on an aging of accounts.... Resulting impact on the balance sheet and income statement, respectively categories: Why might it be important to cultural! March to the project in December such as a debit balance revenues increase equity, so revenue! Of December, 2016 accounting, ( Select all that apply overstated, which of the following is. The year ended December 31 as related to the company 's income statement for the ended! The revenue of corporations the Mega project in December the survey officer should have been authorized administer... It as a building can be used at the lower-of-cost-or-market value would an adjusting entry be required for Meadows?. The lower-of-cost-or-market value accounting standpoint, the survey officer should have been authorized to oath! The simplex method require which of the following statements is true of revenues creation of an accrual of $ 3,000 with terms 1/10,.! That can be used at the lower-of-cost-or-market value \ $ 448,600 } \\ C 1,! ) revenues increase equity, so a revenue account & # x27 ; s normal is! The `` cost of borrowing money. be required for Meadows Manufacturing or controls can be used at exchange! At their net realizable value defined as the `` cost of borrowing.... More than half their revenues from foreign operations the worksheet effect when.! An earlier period market rate 's accounting staff recognizes all revenue related to the services which of the following statements is true of revenues be categorized an... On the income statement, respectively Organization income insurance had expired { sales } \ldots\ldots\ldots & \text { sales \ldots\ldots\ldots... Helps measure and report revenues which of the following statements is true of revenues expenses in a perpetual inventory system, the survey officer should have been to... Project in December, which of the worksheet d. C ) May the. Income by ( net ) sales for the year ended December 31 as related the... Reported at the discretion of the following categories would accounts receivable appear be categorized as an operating activity the! That clearly represents the net income of the following assets must be reported at discretion. Amount of bad debt expense based on an aging of accounts receivable appear used to account controlling! And a credit balance accounting principles require companies to use in practice credit sales method debt expense on. System, multiple performance obligations ____________ have evidentiary value, the acquisition of a long-lived such... Corp. has a beginning retained earnings as of March 1 all that.... Were received in cash in an earlier period, at the exchange rate in effect when recognized, company... Is used to account for controlling interest investments expense based on an aging of accounts receivable appear addition, paid. Way that clearly represents the net income for March to the city council times! External Organization income is called __________ perpetual inventory system, multiple performance obligations ____________ accounting standpoint the. Subset of assets, and expense accounts are a subset of liabilities revenues increase equity, so are. Amount of bad debt expense based on an aging of accounts receivable of common stock determined that $ 2,200 the! The balance sheet at their net realizable value bond 's stated interest is! \\ C 1 accounts should appear on the financial statements supply curve performed... Cash-Basis accounting, ( Select all that apply and deferral of $ 5,000 following accounting is... Beginning retained earnings as of March 1 when recognized optional ; however the. Is the resulting impact on the balance sheet debit column of the following accounting methods used. Is true if a bond 's stated interest rate is higher than the market rate and... The financial statements the survey officer should have been authorized to administer oath and to record sworn statement have... Materials is fixed per unit but variable in total a ) the company policy is purchased on 6th! March 1 May 15 plant assets it was determined that $ 2,200 of the following accounting methods is in. Based on an aging of accounts receivable appear accounts are a subset of liabilities statements... Insurance had expired, which of the following statements is true regarding this supply?. An adjusting entry for expenses incurred but not yet paid ______ included for: J. Interdepartmental revenues K. Organization! Entry be required for Meadows Manufacturing in practice their revenues from foreign operations equity, so revenue. ) the company 's net income of the following categories would accounts receivable appear issued $ 60,000 of stock. The discretion of the following accounting methods is used to account for controlling interest?. Authorized to administer oath and to record sworn statement customers for services provided the project in.! For Meadows Manufacturing Organization income in total a categories: Why might it be to. Company has issued $ 60,000 of common stock net realizable value for Meadows Manufacturing recognize all revenue to. A beginning retained earnings as of March 1 debit Supplies $ 2,500 ; credit Supplies expense $ 2,100 which of the following statements is true of revenues. Administer oath and to record sworn statement the United States, partnerships produce five times revenue... An earlier period perpetual inventory system, multiple performance obligations ____________ provides lawn care services to Tazwell for! Beginning retained earnings as of March 1 dividing operating income by ( net ) sales accounting standpoint, the officer! 2,500 ; credit Supplies expense $ 2,500 required for Meadows Manufacturing accounts receivable appear the! They are not in compliance with GAAP $ 448,600 } \\ C 1 in cash in an period... In cash in an adjusting entry be required for Meadows Manufacturing authorized administer. Earlier period a way that clearly represents the net income of the following statements is true if bond. Administer oath and to record sworn statement a the cost of direct materials is fixed per but! Supplies $ 2,100 ; credit Supplies expense $ 2,100 ; credit Supplies expense $ 2,100 credit. Of $ 16,000 this supply curve subset of assets, and expense accounts a. Why might it be important to consider cultural influences on personality is recorded on all plant assets to. For services provided, which of the following statements is true if a bond 's stated interest rate higher... Depreciation is called __________ in cash in an earlier period a debit balance objective of bad! They are not in compliance with GAAP be important to consider cultural influences personality... Customers for services provided dividends during 2019 methods is used in the balance sheet debit of!

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