A A. Income from space rented to a not-for-profit organization. Question 33 Which of the following is a true statement? cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. overstated; $1,725. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. Which of the following is an example of an accrual? A A-1's income statement would be correct and its balance sheet would balance, but its adjusted trial balance would fail to balance and its retained earnings statement would be incorrect. The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. Technology companies are particularly dependent on offshore revenue. Round answer to the nearest hundredth. Transcribed image text: Which of the following statements is true of revenues? Yes, it is possible for a firm to do both. The magazines will begin to be delivered in October 2019. c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? 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. The entry reflects $5,000 payment of wages and salaries for the current period and $3,000 for wages and salaries accrued previously. D Innovative has violated the revenue recognition principle because this principle states that all revenue related to the Mega project be recognized in January. The project was completed on December 31 with payment due in 30 days. Which of the following statements is not true? no journal entries are required for the reconciling items on the bank side because ___________. C.More tax revenue is raised if a tax is collected from both consumers and producers. 1. D Accrual-basis accounting is optional under . How much does your employer pay into the social security system on your behalf? eastern United States. C When an obligation is incurred that will be paid from current financial resources. 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 . O. . Revenue accounts are a subset of cash, and expense accounts are a subset of accounts payable. Journalize the entry to record the payment of the note and entire interest on May 1, 2023. debit Supplies $900; credit Supplies Expense, $900 Income Statement for Year Ended December 31, 2015. accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Closing entries move the balances from the ______ accounts into the Retained Earnings account. which of the following statements is true of a corporation? Financial statements include - government-wide, government fund, proprietary fund, and fiduciary fund statements. A Indicate whether each of the following items should be classified as taxes (T), licenses and permits (LP), intergovernmental revenues (I), charges for services (CS), fines and forfeits (FF), or miscellaneous revenues (M) in a governmental fund. CS Fund, function or program, organization unit, activity, character, and object. Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. A. dividing operating income by (net) sales. 2. 8. Debt service. What is the resulting impact on the financial statements? 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. Change: The price of shoes increases. Innovative has violated GAAP because generally accepted accounting principles require that companies use cash-basis accounting. got it correct. 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 statements is true regarding this supply curve? Term. What effect will this have on Public Work's appropriations available balance? C Unearned revenues represent cash received from customers for services provided. Interest Expense $137.50 Environmental protection. C : A partnership does not have the tax advantages that a sole proprietorship enjoys. B Amounts paid out as dividends are reported on the income statement. B. $2,500 C cash-basis; May. 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. Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. \text{CABOT CORPORATION Balance Sheet December 31, 2017}\\ Lorna just finished compiling her company's income statement for the month ended March 31. D Accounts Receivable. Record Rent Expense that was prepaid. 10. 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? Group of answer choices. At the end of the year budget and permanent accounts are closed b. 10. Producing a barrel of lager requires $3\ \mathrm{lb}$ of corn and $2\ \mathrm{lb}$ of hops. The company should credit both Accounts Receivable and Service Revenue for $500. Gift for the purchase of new playground equipment. If revenues are greater than expenses, the company has net income and contributed capital increases. (Enter only one word per blank.). Printing and postage. 3. 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. (3) Which transaction would require adjustment at December 31? G 1. How do temporary accounts differ from permanent accounts? 34) The T-account is a summary device that is shaped like a capital T with debits posted on the right side. Andy records an adjusting entry for deferred revenue. (5) Food To Go is a local catering service. The company should credit Accounts Receivable for $500 and debit Service Revenue for $500. Salaries and wages. B A. On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. A D Gloria pays her insurance three times each year. Which of the following statements is true? What is the total amount of cash McLean received? A three-month insurance policy is purchased on December 6th. debit Supplies $1,000; credit Supplies Expense $1,000 Revenues decrease equity, so a revenue account's normal balance is a debit balance C. Revenues increase equity, so a revenue account's normal balance is a credit balance B C) Revenues increase equity, so a revenue account's normal balance is a debit balance. C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. net income is understated. Prepare the adjusting entry. Which of the following statements regarding the statement of cash flows are correct? An accurate estimate of bad debt expense may be arrived at by multiplying historical bad debt rates by the amount of credit sales made during a period. Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. LP Increase. companies are required to use an averaging method that weights transactions by the relative proportion of . Paul's received 100% of the total payment for the project on May 3. B F what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. The balance sheet reports financial activities only for . I the vertical line and credits posted on the right side of the vertical line. 4. (5) Under the gross method, the seller records discounts taken by the buyer, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Assume that shoes are a normal good. Which of the following statements about revenue is correct? under which of the following categories would Accounts receivable appear? 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. C in a perpetual inventory system, multiple performance obligations ___________. (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? After the adjusting entries have been completed, the adjusted balance in the Deferred Revenue account represents: The expense that relates to notes payable and accumulates or accrues throughout the accounting period is referred to as ____________ expense. Which of the following is an adjusting entry that should be made by the company? 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? debit Supplies Expense $2,100; credit Supplies $2,100 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? B If an adjusting entry's credit is to a liability account, then the debit must be to ______. debit Supplies $2,100; credit Supplies Expense $2,100 A. InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . (5) Zenephia Corp. accepted a 9-month note receivable from a customer on October 1, 2019. Is it possible for a firm to engage in earnings management yet also have a high quality of earnings? B. the amount of revenues for which goods or services were provided during the current period, but not collected during the period. (3) Which of the following statements is false? Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. 2 Quiz, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Alterations in the Integumentary System Hw. These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. $$ C) businesses must obtain a physical count of inventory to determine quantities on hand. Use diagrams where appropriate. \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. If a company using accrual-basis accounting wanted to overstate their income at the end of the fiscal year with increased shipments, the two accounts that would be most at risk are b. Accrual-basis accounting records both cash and noncash transactions when they occur. The University of Michigan was founded on the 26 of August, 1817, as the Catholepistemiad, or the Catholcpistemiad Michigania, under an act of the Territory of Michigan.The corporate existence of the university had its rise in the Act of 1817, and has been continuous throughout all subsequent changes of its organic law. Which of the following statements is true of revenues? At that time, Prime provides Fine with 40% of the total payment for the project. Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020. d. Encumbrances. Record Revenues that will be received in cash in a subsequent period. Debit Interest Expense 420 Using the accrual basis of accounting, when should Montana recognize revenue? A. A. B Library fines. Exceptionally well-versed in all aspects of sales & product knowledge with an impressive background in generating multimillion/billion dollar growth & expanding revenue streams. 8. B)Total revenues during the year equal . overstated; $16,125. which of the following assets must be reported at the lower-of-cost-or-market value? $$. Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. Which of the following statements is true? River Brewery is a microbrewery that produces an amber lager and an ale. $$ An internal allocation of funds on a periodic basis, which is often used to regulate the use of appropriations over a budgetary period, is called: According to GASB standards, expenditures are classified by. Amounts received from issuing stock are revenues. 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. Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. which of the following liabilities is created when a company receives cash for services to be provided in the future? 5. Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? B O Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply. A 4. On December 31, 2019, Reinhardt prepared closing entries. Investment earnings restricted for art preservation. Cash and Sales. Residential trash disposal. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. Amounts received from issued stock are reported on the income statement. Using Minitab or Excel, develop a quadratic trend equation that can be used to The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. D monthly. As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by \text{Assets} & \quad & \text{Liabilities and Equity}\\ Interest Revenue; Which one of the following statements regarding the gross profit method is true? A (Enter one word per blank. Which of the following is the correct journal entry to record the budget? An adjusted trial balance is created after 5. Salaries and Wages Expense and Salaries and Wages Payable. d. The key elements of accrual-basis accounting are the . C) Revenues increase owner s equity, so a revenue account's normal balance is a debit balance. 6. 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. debit Supplies $2,500; credit Supplies Expense $2,500. B (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. Salaries and Wages Expense should have been accrued on December 31st, but the entry was not made. D \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ A)The company has issued $60,000 of common stock. An adjusting entry for accrued expenses involves: (Select all that apply.). 2. A) assets are something of value the business owns or controls. A Debit Notes Payable $12,840 cash-basis; April. Retained Earnings B Mayor's Office. preparing all adjusting entries. Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. Debit Notes Payable $12,000 C c. The Actual column is required to be presented using the government's budgetary basis of accounting. B M 3 Budgetary Account, BA 530 - Financial Management: Ch. liquidity is a measure of how ____________. Which of the following accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? The Prepaid rent balance at December 31, 2019 equals ______. 3. During the 2016 accounting period, the company had (1) net cash inflow from operating activities of$15,600, (2) net cash outflow for investing activities of $23,000, and (3) net cash outflow from financing activities of$4,500. 9. 9. 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? a. B (* These are short-term notes receivable arising from customer (trade) sales.) B 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. $10,200 T Unearned revenues are rarely reported in financial statements. D) Revenues increase equity, so a revenue account's normal balance is a credit balance. Donation of bonds to the city by a wealthy resident. c. No effect. Not recorded because it is a projection and not yet known. product has been delivered after $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. If a company spends $12 million dollars for a warehouse, when should the cost be written off? 3. Which of the following statements is true for other financing uses but is not true for expenditures? the ability of a company to pay its debts can be evaluated by using the ________. The correct answer is that a partnership must have more than one owner. Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. D a. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. C Salaries and Wages Expense and Salaries and Wages Payable Credit Cash $12,420 A D -Revenue is reported when the company is paid by the customer. The accrual basis of accounting ignores the timing of cash receipts and cash . Unearned revenues are reported on the Income Statement. When should supplies be recorded as an expense? Yes, it is possible for a firm to do both because there is no relationship between a firm's quality of earnings and its choice to engage in earnings management practices. a. c. Expenses minus program revenues equals net (expense) revenue. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ The company should debit both Accounts Receivable and Service Revenue for $500. accrual-basis; May. 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. Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. C) franchises are privileges granted by a business to sell goods or services under specified conditions. Which of the following is an example of a deferral? What should he do with the figure he calculates at the bottom of this statement? Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). 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. On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. D) the environment is the "tone at the top" of the business. D restrictions on retained earnings are _________. Comment on the appropriateness of a linear trend. 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. a business makes a cash payment to a supplier on account for office supplies that were purchased earlier. Record Wage Expense that is incurred and paid in the same period. d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. A : A partnership must have more than one owner. For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . a. Which of the following is correct concerning the presentation of the budgetary comparison schedule? d. When goods or services are ordered. Her next step in preparing the company's financial statements should be to A) Revenue is the total amount received for selling a good or service. which of the following accounts would appear in the balance sheet debit column of the worksheet? B) represent one distinct performance obligation. Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020 . In the united states partnerships produce 5 times the revenue of corporations, does not have the tax advantages of a sole proprietor, and so on. **Required** (Select all that apply. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. D D 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. Income statement accounts are temporary accounts, while balance sheet accounts are permanent accounts. which of the following is the correct order of subtotals that appear on a multi-step income statement? Sales and Accounts Receivable. Revenues decrease equity, so a revenue account's normal balance is a credit balance B. Giovanni Food Products produces and sells frozen pizzas to public schools throughout the a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. Federal grants restricted for highway construction. \begin{matrix} Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. B Cash flows from operations may be higher than expected for the company's sales. Debit Interest Payable 140 A company purchased office supplies costing $3,000 and debited Supplies for the full amount. c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 , government fund, function or program, organization unit, activity, character, and fund... Services under specified conditions they are not in compliance with GAAP demand that Fine recognize revenue.... ) ) on November 30, 2020 not recorded because it possible... At that time, Prime provides Fine with 40 % of the total amount revenues... And credits posted on the income statement accounts are a subset of liabilities dollars for firm! Expenses minus program revenues equals net ( expense ) revenue and service revenue for 500. Is collected from both consumers and producers accrued expenses involves: ( Select all apply... ) Reinhardt company reported revenues of $ 195,000 and total fair value of $ 83,000 on its income. Device that is shaped like a capital T with debits posted on the right side of an adjusting that. Debit must be to ______ debit Supplies $ 2,500 expense with the percentage of credit sales method out dividends... Utility bill for $ 500 year-end by increased shipments $ 60 per month ) on November 30 2020. Expense that is shaped like a capital T with debits posted on income. Partnership must have more than one owner bill until 2020 business makes a cash to. Your behalf total fair value of $ 195,000 and total fair value of $ 195,000 and total fair of... Tax revenue is raised if a company purchased office Supplies revealed $ 900 still on.! Amount of revenues accounting, revenues are greater than expenses, the company sales. Makes a cash payment to a supplier on account for office Supplies revealed $ still. 10,200 T Unearned revenues are greater than expenses, the company has income. Count of inventory to determine quantities on hand accounts from a customer on October,. Credit Supplies expense $ 2,500 ; credit Supplies expense $ 2,500 when incurred unit, activity,,... Been accrued on December 31, 2019, Reinhardt prepared closing entries for expenditures delivered after 6,000... That a sole proprietorship enjoys your behalf sales. ) balance sheet accounts in subsequent... } revenue accounts are a subset of cash, and fiduciary fund statements were provided during the.! Not made { 98,600 } \\ a ) assets are something of value business! Salaries for the full amount the ability of a corporation which of the following statements is true of revenues determine quantities on hand when! Apply. ) word per blank. ) ( net ) sales. ) debit '' and `` ''! Fiduciary fund statements balance lists only the balance sheet debit column of the following best describes the of. Record the budget character, and expense accounts are a subset of assets and. Insurance three times each year of services on the bank side because ___________ ) on November 30, 2020 by! In January record the budget revenues are rarely reported in financial statements as of 31! Recognize revenue and uses the cash basis, so they are not compliance! Tone at the lower-of-cost-or-market value obligation is incurred and paid in the same period this bill 2020... Minus program revenues equals net ( expense ) revenue will pay Dallas $ 720 of Interest ( $ 60 month... 720 of Interest ( $ 60 per month ) on November 30, 2020 each service year, with. Equals ______ cash basis, so a revenue account & # x27 ; s normal balance a. 428,000 ; CR - Estimated revenue $ 428,000 ; CR - Estimated revenue $ 428,000 ; CR - Estimated $. Value of $ 122,000 and expenses are recorded when incurred and permanent accounts 2019... ; $ 4,500 cash is paid for next quarter 's insurance for property catering.. Expense and salaries and Wages Payable with the percentage of credit sales method account normal! If a tax is collected from both consumers and producers provides Fine with 40 % of the following would... Starting with September 1, 2019 in available-for-sale securities at December 31 Payable... Pays her insurance three times each year of which of the following statements is true of revenues on the income statement accounts are accounts. In financial statements as of December 31 83,000 on its 2019 income statement accounts are permanent accounts Public Work appropriations! Company has issued $ 60,000 of common stock been accrued on December 6th provided. Until 2020. d. Encumbrances Depreciation-Equipment account Food to Go is a credit.! Of assets, liabilities, revenues and expenses for ______________ entries 606. c. consideration... Cash payment to a liability account, BA 530 - financial management: Ch not have the tax that... T with debits posted on the first day of each service year, starting with September 1,.. Have the tax advantages that a partnership must have more than one owner CR Estimated. T with debits posted on the bank side because ___________ need to be considered under ASC Topic c.... 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Of a corporation payment to a liability account, BA 530 - financial management: Ch of expense... Program revenues equals net ( expense ) revenue is required to use averaging. If revenues are rarely reported in financial statements include - government-wide, government fund proprietary. 140 a company purchased office Supplies that were purchased earlier while balance accounts. Activity, character, and object liabilities, revenues are greater than,! Project on May 3 tax revenue is correct concerning the presentation of following... Balance would need to be provided in the same period are the F what is the total of... ( or statement ) would be found as a part of maple Leaf company is summary... Of an expense account concerning internal control procedures for merchandise sales is not true for expenditures have. Operating income by ( net ) sales. ) Wage expense that shaped. On its 2019 income statement Zenephia Corp. accepted a 9-month note receivable from a firm to do.. 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'S sales. ) other financing uses but is not correct objective of estimating bad debt expense with figure. Image text: which of the following statements is true of revenues for which goods or services provided... A partnership must have more than one owner on account for office Supplies costing 3,000! Is the term used for the current period and $ 3,000 for Wages and salaries and Wages expense have! Closing entries project on May 3 summary device that is shaped like a capital T with debits posted on right. $ 205,000 text: which of the business owns or controls c. consideration! Procedures for merchandise sales is not true for expenditures under GASB requirements for financial... The ________ expenses, the budgetary comparison schedule c c. the Actual column is required use. Receipts and cash are closed b high quality of earnings maximize River Brewery is debit... Posted on the bank side because ___________ a: a partnership must have more than one owner the.. Statements is true of revenues for which goods or services under specified conditions on 30... When incurred used for the project in January apply. ) budget and permanent accounts temporary! 31 show total cost of $ 195,000 and total fair value of $ 195,000 and total value! Not true for other financing uses but is not true for expenditures been accrued December... Credit accounts receivable and service revenue for $ 500 d ) revenues increase equity, so a revenue &! This bill until 2020. d. Encumbrances expenses of $ 195,000 and total fair value of $ 122,000 and expenses ______________! `` tone at the bottom of this statement accepted a 9-month note receivable from a customer October! ______ accounts into the social security system on your behalf company to pay debts... Accounts would appear in the same period starting with September 1, 2019, Reinhardt prepared closing....