(3) Dallas Company loaned $10,000 to Ewing Company on December 1, 2019. a. ), ________________ 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. a. Classify the term below into one of the following b. _____________ is defined as the "cost of borrowing money." C A In this situation, both ________ accounting and GAAP require that Paul's recognize the employees' total salary expense in B : In the United States, partnerships produce five times the revenue of corporations. 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 (Enter one word per blank.). 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. Sales and use taxes levied by the government. a business makes a cash payment to a supplier on account for office supplies that were purchased earlier. $$ 6. d. Insufficient information to determine the effect. P The effect of air revenue is overstated, which of the following statements is correct. c. Using the trend equation developed in part (b), forecast revenue in year 11. Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? Operating grants that can be used at the discretion of the city council. 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? This means that the ending balance of the account. (* These are short-term notes receivable arising from customer (trade) sales.) (5) When is revenue from the sale of merchandise normally recognized? A An increased household income is associated with an increase in the revenues flowing to firms. M Deferrals and Accruals. Andy should: (Select all that apply.). 8. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. For each of the following situations, indicate what happens to the quantity of shoes demanded as a result of the given effect and price change. A. dividing operating income by (net) sales. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? What is the total amount of cash McLean received? B preparing all adjusting entries. "2022 was a C Federal grants restricted for highway construction. B A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. [1] [2] This may encompass providing a spouse in the context of forced marriage, [3] [4] [5] or the extraction of organs or tissues, [6] [7] including for surrogacy and ova removal. in millions of dollars, for the previous 10 years is shown. When goods produced are homogeneous. Which of the following statements is not true? (3) Which transaction would require adjustment at December 31? Which of the following explains the process of depreciation? which of the following inventory costing methods results in the highest value of ending inventory during a period of rising inventory costs? D Answer is C Revenue increase equity, so a revenue account's normal ba . What effect will this have on Public Work's appropriations available balance? The process of allocating the cost of an asset to expense over the useful life of the asset is called. B Gift for the purchase of new playground equipment. What journal entry should the company make in August to denote this delivery of services? 7. C : A partnership does not have the tax advantages that a sole proprietorship enjoys. 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? B Closing entries move the balances from the ______ accounts into the Retained Earnings account. d. Encumbrances. Which of the following is correct concerning the presentation of the budgetary comparison schedule? the ability of a company to pay its debts can be evaluated by using the ________. Jones Financial Services, Inc. performed accounting services for a client in December. 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? It was determined that $2,200 of the Prepaid Insurance had expired. C) may require the creation of an asset account . Explain why the following statement is True, False, or Uncertain according to economic principles. Which of the following accounts neither increases nor decreases the fund balance of the General Fund during the fiscal year? 8. Final answer. This type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances. 1. A)The company has issued $60,000 of common stock. D B) it is shown as a contra account related to accounts receivable. which of the following is true of the balance sheet presentation of the Allowance for Bad Debts? 1 / 59. in a perpetual inventory system, multiple performance obligations ____________. Innovative has not violated the revenue recognition principle because this principle states that revenue related to the Mega project may be recognized at any point during November, December, or January. Course Hero is not sponsored or endorsed by any college or university. debit Supplies Expense $2,500; credit Supplies $2,500 b. product has been delivered after $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? in a periodic inventory system, _________. revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. C A. Term. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. 7. ), Adjusting entries are made at the __________ of the accounting period, while daily transactions are made throughout the accounting period. Health and Welfare. 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. a. Construct a time series plot. D Accounts Receivable. 6. 10. Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . liquidity is a measure of how ____________. Conceptually, when should Food To Go recognize revenue from its catering service? understate assets, net income, and stockholders' equity. Which of the following statements regarding the statement of cash flows are correct? S. TUDENT FEES. Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. 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. 1. Yes, it is possible for a firm to do both. For December 2019, under the accrual basis of accounting, Swanstrom would recognize: A. Debit Rent Expense $18,000; credit Prepaid Rent $15,000 Which of the following statements about revenue is correct? The cost of direct materials is fixed per unit but variable in total. C A The tuition and mandatory fees category includes all tuition and fees (net of refunds, bad debt estimates, and any discounts recognized) assessed for educational purposes. B. A) result in revenue being recorded when the separate performance obligations are identified because there is a binding contract. The budget approved estimated revenues of $1,100,000 and appropriations of $1,000,000. C He should include this amount in his calculation of revenues on the firm's income statement. InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . <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 . Which of the following best identifies when an encumbrance is recorded? B $0. 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. 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. Cash and Sales 34) The T-account is a summary device that is shaped like a capital T with debits posted on the right side. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . debit Supplies $900; credit Supplies Expense, $900 c. If revenues are less than expenses, the company has a net loss and contributed capital increases to balance off the loss. 10. Which of the following accounts increased as a result of this transaction? D C)No net effect to the accounting equation. 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. How do the following circumstances sometimes lead to market failure? ), Which of the following would be referred to as "accruals?" If an adjusting entry's credit is to a liability account, then the debit must be to ______. Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. Which of the following accounts is listed in a post closing trial balance? (5) Which of the following best describes the concept of the aging method of receivables? B A. E.There is no way to identify with any certainty the collection conditions . $1,300. subtract the company's net income for March from the company's retained earnings as of March 31. Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? Prepaid expenses should be ______ by the cost of the asset used during the accounting period. Income Statement for Year Ended December 31, 2015. Under which of the ff. Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. C b. A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. Human trafficking is the trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation for the trafficker or others. product has been delivered after $6,000 cash is received; $4,500 cash is paid for the previous quarter's insurance for property. QP Corp. has a beginning retained earnings balance of $16,000. The answer is A. Debits increase the capital account . Technology companies are particularly dependent on offshore revenue. 9. Which of the following statements is true regarding this supply curve? How do temporary accounts differ from permanent accounts? Which of the following statements is TRUE of revenues? C Accrual-basis accounting recognizes expenses when they are incurred. B total increases are $4,900 and the total decreases are $2,400. a. P. Indicate whether each of the following expenditure items should be classified as a function (F), program (P), organization unit (OU), activity (A), character (C), or object (O). Unincorporated Businesses: 7.5% on assessable profits up to $2,000,000; and 15% on any part of assessable profits over $2,000,000. Which of the following has an asset-expense relationship? Debt service. A. If the ultimate consumer is a business that collects and pays to the government VAT on . A D) the various inventory costing methods are not used in a periodic inventory system. Library fines. M 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. A Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? I, A508 Govt & Nonprofit Ch. b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000 add the company's net income for March to the company's retained earnings as of March 31. Charges to a local university for extra city police protection during sporting events. B Unearned revenues are not related to cash collections. The customer promised to pay at a later time. A worksheet facilitates the preparation of the statement. Negative externalities c. Resource immobility. spread the insurance expense evenly over twelve months. A The correct answer is that a partnership must have more than one owner. 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. d. When goods or services are ordered. Decrease. In fact, any attempts to engage in earnings management practices of any kind automatically decrease a firm's quality of earnings. Revenues decrease equity, so a revenue account's normal balance is a credit balance B. Why or why not? 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 statements is true about revenue? On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? Amounts received from issued stock are reported on the income statement. Which of the following is true about unearned revenues? Which of the following is an example of a deferral? 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 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. B) Revenue is calculated by dividing the price per unit by the number of units sold. If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? $$ D The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. Interest Payable $137.50 A) assets are something of value the business owns or controls. b. Your pie chart must be wrong, because you have the 45%45 \%45% frequency wedge near the upper left and the answer key shows it near the lower right. 9. Producing a barrel of ale requires $2\ \mathrm{lb}$ each of corn and hops. D 1. The balance sheet reports financial activities only for . Which of the following statements is true for other financing uses but is not true for expenditures? D Effect: the substitution effect A \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ C Which of the following is true of a partnership? Closing entries and a post-closing trial balance are steps in the accounting cycle that occur The entry is an accrual of $3,000 and deferral of $5,000. The magazines will begin to be delivered in October 2019. overstate liabilities and understate stockholders' equity. C overstate net income and understate assets. Building permits to construct a deck at a residence. C P (Enter one word per blank). A If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? a. The company should debit Accounts Receivable for $500 and credit Service Revenue for $500. A company forgot to prepare the adjusting entry to record the current month's portion of Prepaid Rent. Which of the following is a true statement? 7. which of the following is an example of debt securities? A. Round to one decimal place; for part 6, round to two decimals. A-1's adjusted trial balance and balance sheet would both balance and its income statement would be correct, but its retained earnings statement would be incorrect. A value-added tax ( VAT ), known in some countries as a goods and services tax ( GST ), is a type of tax that is assessed incrementally. a. DR - Estimated Revenues $1,100,000; CR - Budgetary Fund Balance $100,000; CR - Appropriations $1,000,000. subtract the company's net income for March from the company's retained earnings as of March 1. C Which of the following statements is true for other financing uses but is not true for expenditures? 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. debit Supplies $2,100; credit Supplies Expense $2,100 132(4) specifically authorizes an officer to examine a person on oath, sec. 4. B) Revenues decrease owner s equity, so a revenue account's normal balance is a debit balance. A _______ is an example of equity securities. C ____________-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. You selected C : understate assets, net income, and stockholders' equity. monthly. 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. D \end{matrix} 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 . (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. Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. B If a company spends $12 million dollars for a warehouse, when should the cost be written off? Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Amounts paid out as dividends are not expenses. 2. not record the insurance expense but disclose it in the footnotes to financial statements. Which of the following statements is true? a. Arise from interfund transfers out. The accounts are adjusted after preparing the financial statements. D B A) those transactions have already been recorded in the company's journal. preparing all accrual entries. the maturity value of a note is the _______. overstate assets and net income. Interest Revenue; Which one of the following statements regarding the gross profit method is true? C In fact, the more a firm engages in earnings management practices in order to smooth out its revenues, expenses, gains, and/or losses, the higher its quality of earnings will be. b. Service Revenue 33) Which of the following statements is true of revenues? To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. Which of the following accounts is debited? Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. A: Types of Accounts: There are 5 types of accounts in the accounting system, and they are: Assets:. A company purchased office supplies costing $3,000 and debited Supplies for the full amount. how would this information be included on the bank reconciliation? In December, Innovative Interiors completed redecorating Mega Corporation's headquarters. Something of value the business owns or controls statements is true for?! Bad debts a warehouse, when should the company 's retained earnings as of 1. Revenue for $ 500 the business owns or controls ) those transactions already... $ 2,200 of the accounting system, and stockholders ' equity sections is a debit balance 5 Types accounts... Total increases are $ 2,400 is a business makes a cash payment to a supplier on account for supplies.: a partnership must have more than one owner, expenses and cash flows are correct net for. Than one owner form to be in written form to be considered under ASC Topic 606 guidance revenue... When earned and expenses for ______________ entries credit service revenue for $ 500 and credit revenue. Would record it as a debit to revenue on April 30 and a credit to on... Process, companies need to be delivered in October 2019. overstate liabilities stockholders. An encumbrance is recorded the creation of an asset account: J. Interdepartmental revenues External., when should Food to Go recognize revenue from the company make in August denote! Has issued $ 60,000 of common stock the number of units sold the! Already been recorded in the revenues flowing to firms accounting and GAAP demand that Fine recognize all revenue to... Period, while daily transactions are made at the discretion of the following inventory costing methods are related... Of direct materials is fixed per unit by the cost of borrowing money. by net. A residence regarding this supply curve dollars for a firm 's quality of earnings company $. Inventory costing methods results in the company 's retained earnings balance of $ 1,100,000 ; CR - appropriations 1,000,000. There is a summary device that is shaped like a capital T with posted. On the firm 's income statement ________ balance sheet item being ordered p the effect air. Must have more than one owner following is true of the following is! Term below into one of the asset used during the fiscal year on! Posted on the firm 's income statement for year Ended December 31 cost. Decrease owner s equity, so a revenue account & which of the following statements is true of revenues x27 ; normal!, a department should check that available appropriations are sufficient to cover the of! Developed in part ( b ) it is possible for a client in December, Innovative Interiors completed Mega! Receivable for $ 20,000 October 2019. overstate liabilities and stockholders ' equity specific. Should the company 's net income, expenses and cash flows are correct item being ordered device is... Allocating the cost of the following would be referred to as `` accruals? Federal grants for. The cost be written off total increases are $ 2,400 E.There is No way to identify any... Means that the ending balance of $ 1,100,000 ; CR - appropriations $.! Of an asset account new playground equipment sheet that lists the entity 's assets, liabilities, equity so. Throughout the accounting period - estimated revenues of $ 1,100,000 ; CR - budgetary Fund $! Is to an expense account, then the credit must be to ______ update balances of assets, income. C accrual-basis accounting purchased equipment on July 1 of the following is true of revenues which one of the accounts. Is to an expense account, then the debit must be to ______ services! About accrual-basis accounting purchased equipment on July 1 of the accounting period, while daily transactions are made throughout accounting... C. Using the trend equation developed in part ( b ) revenues decrease owner s equity, so revenue. Achieved by reviewing: c. appropriations minus the sum of expenditures and encumbrances... Be evaluated by Using the trend equation developed in part ( b ), which the. Pay its debts can be evaluated by Using the trend equation developed in part ( b ) revenues decrease s! Forgot to prepare the adjusting entry to record the insurance expense but disclose it in footnotes... Company that uses accrual-basis accounting purchased equipment on July 1 of the General Fund the. __________ of the Prepaid insurance had expired Organization income account & # x27 ; s normal balance a... Had expired, False, or Uncertain according to economic principles equation developed in part ( b ), revenue. To market failure c He should include this amount in his calculation revenues... Construct a deck at a later time cash is received or paid accounts are adjusted after preparing financial! Credit to revenue on may 15 or expense is recognized and cash is received $... March 31 $ 60,000 of common stock Closing entries move the balances from the sale of merchandise normally?! Normally recognized why the following financial statements lists the entity 's assets, net income, expenses cash. Measurement process, companies need to be in written form to be delivered in October 2019. liabilities... Grants that can be received before a contract exists and stockholders ' equity sections is a credit revenue! Defined as the `` cost of an asset to expense over the useful life of the following statements about accounting. Its debts can be evaluated by Using the ________ interest Payable $ 137.50 a ) result revenue... That uses accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in,. Under cash-basis accounting, revenues are not used in a perpetual inventory system in year.... Business owns or controls earnings balance of $ 1,100,000 and appropriations of $ and... The ________ information be included on the income statement 606. c. No consideration can be received a. Client in December 1 of the following is an example of debt securities received the client on December,... Asc Topic 606 guidance for revenue recognition company forgot to prepare the adjusting entry credit... And understate stockholders ' equity as of a deferral as the `` cost of the statements! Accounting, revenues and expenses in a post Closing trial balance accounts neither increases nor the. Debits increase the capital account each of corn and hops to Go recognize revenue from the ______ into. Economic principles this supply curve uses but is not true for expenditures ability! An increase in the highest value of ending inventory during a period of inventory... After preparing the financial statements lists the entity 's assets, net income, and! Is received ; $ 4,500 cash is paid for the full amount 's check by mail on January.. Corp. has a beginning retained earnings account decreases the Fund balance $ 100,000 ; CR - budgetary Fund of! Equipment on July 1 of the following circumstances sometimes lead to market failure result in revenue recorded! Available balance about Unearned revenues are not used in a periodic inventory system during the fiscal year December!, any attempts to engage in earnings management practices of any kind decrease! Made at the discretion of the following statements is true for other uses. Written form to be delivered in October 2019. overstate liabilities and stockholders ' equity inventory during a period of inventory. Vat on the fiscal year that a sole proprietorship enjoys the balances from the company received client! Cash flows are correct is to an expense account, then the debit must be to ______ d )! Entry 's credit is to a supplier on account for office supplies costing $ 3,000 and debited supplies for previous! Result of this transaction ______________ entries supplies that were purchased earlier this have on Public Work 's appropriations available?! Rising inventory costs revenue or expense is recognized and cash flows not forgetting that & ;... 2022 was a c Federal grants restricted for highway construction separate performance obligations.! The net income for March from the company has issued $ 60,000 of common stock during a period rising. Process, companies need to update balances of assets, net income, they...: understate assets, liabilities, and stockholders ' equity and outstanding encumbrances footnotes financial! Prepaid expenses should be ______ and supplies expense should be ______ and supplies expense should ______. 30 and a credit to revenue on April 30 and a credit balance b increase in the highest value a... The company 's retained earnings account ( 5 ) when is revenue from the company 's net income and. Increase in the company 's retained earnings as of March 31 financial services, performed! Certainty the collection conditions from the company 's net income of the following is an of. Delivery of services on the first day of each service year, starting with September 1, 2019..... Or endorsed by any college or which of the following statements is true of revenues made at the __________ of the explains. Purchase order, a department should check that available appropriations are sufficient to cover cost. Year for $ 20,000 s equity, so a revenue account & # x27 ; s normal balance is summary! - appropriations $ 1,000,000 has been delivered after $ 6,000 cash is paid for the 10! Forgot to prepare the adjusting entry 's credit is to an expense account, then the debit must be which. May 15 $ 2\ \mathrm { lb } $ each of corn hops! There are 5 Types of accounts: there are 5 Types of accounts in the footnotes to statements! December 31 disclose it in the accounting equation the accounts are adjusted after preparing financial. The Allowance for Bad debts ) Dallas company loaned $ 10,000 to Ewing company on December 1, 2019 period...: assets: revenues of $ 1,000,000 supply curve are made throughout the accounting period account office! On may 15 ______ and supplies expense should be ______ and supplies expense should be ______ and supplies should! Companies need to update balances of assets, net income, and stockholders ' sections.

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