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. Which of the following is an example of a deferral? (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. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. A bill from their Internet Service Provider (ISP) received on March 10th is to be paid on April 9th. 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. Debit Notes Payable $12,420 Revenues decrease equity, so a revenue account's normal balance is a credit balance B. 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. A 8. (Enter one word per blank.). 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. Deferrals and Accruals. preparing all deferral entries. 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? Giovanni Food Products produces and sells frozen pizzas to public schools throughout the C Round to one decimal place; for part 6, round to two decimals. A P None of the answers are correct. d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. The company should credit both Accounts Receivable and Service Revenue for $500. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. G Unearned revenues are rarely reported in financial statements. 7. a. (5) What does the phrase, "Revenue is recognized at the point of sale" mean? cash-basis; April. overstated; $16,125. Her next step in preparing the company's financial statements should be to The company should debit Accounts Receivable for $500 and credit Service Revenue for $500. \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ daily. C 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) assets are something of value the business owns or controls. C.More tax revenue is raised if a tax is collected from both consumers and producers. d. Either report as a direct expense of the function or program with which the related depreciable assets are identified or report as an indirect expense on a separate line if the depreciable assets benefit all functions or programs. Interest Expense $137.50 O $10,200 It is apparent that while sec. 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. D C When should Mainzel recognize the related revenue using accrual accounting? C On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. The project was completed on December 31 with payment due in 30 days. Final answer. The entry is an accrual of $3,000 in Wage and Salary Expense. The company should credit Accounts Receivable for $500 and debit Service Revenue for $500. 1 / 59. in a perpetual inventory system, multiple performance obligations ____________. A Debit Rent Expense $18,000; credit Prepaid Rent $3,000 A. How do the following circumstances sometimes lead to market failure? accrual-basis; April. Compute the following: (1) current ratio, (2) acid-test ratio, (3) days sales uncollected, (4) inventory turnover, (5) days sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders equity. debit Supplies $2,500; credit Supplies Expense $2,500. _____________ is defined as the "cost of borrowing money." Merchandise Inventory and Cost of Goods Sold appear ___________. C C On June 30, an inventory of the supplies indicated only $1,000 on hand. D a. Why or why not? debit Supplies $2,100; credit Supplies Expense $2,100 Which of the following is true of assets? Pfizer denied conducting gain-of-function research for the coronavirus virus in a letter to Representative Ronny Jackson (R-TX), Breitbart News has learned exclusively. (Enter one word per blank). In December, Innovative Interiors completed redecorating Mega Corporation's headquarters. Negative externalities c. Resource immobility. A-1's adjusted trial balance would balance and its income statement would be correct, but its retained earnings statement would be incorrect and its balance sheet would not balance. Gold Dome Report - Legislative Day 22. Barbers and hairdressers' registration fees. ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). The adjusted balance for Prepaid Insurance at December 31, 20122, will be <p class="SectionHeads">Purpose</p> <p>The job of Accountant II is done for the purpose/s of performing a variety of moderately complex professional accounting duties . (Enter only one word. Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. Imagine if you c (Enter only one word per blank.). Income from space rented to a not-for-profit organization. Which of the following is correct concerning the presentation of the budgetary comparison schedule? B C D) the environment is the "tone at the top" of the business. Cash is paid for supplies to be used from January 1st to March 1st. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. 7. Course Hero is not sponsored or endorsed by any college or university. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? B. Which of the following is an adjusting entry that should be made by the company? a. Gift for the purchase of new playground equipment. A In this scenario, Building permits to construct a deck at a residence. Debit Rent Expense $18,000; credit Prepaid Rent $15,000 D $1,200. A cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. 2. The following is true of a partnership. ), ________________ 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. spread the insurance expense evenly over twelve months. 8. 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? Salaries and Wages Expense and Salaries and Wages Payable. 3. Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy . (5) Which of the following best describes the concept of the aging method of receivables? A cost is something used up to produce revenues in a particular accounting period. : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . 1. Sales and use taxes levied by the government. (3) Which of the following statements is true? Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? preparing all accrual entries. subtract the company's net income for March from the company's retained earnings as of March 31. restrictions on retained earnings are _________. D Charges to a local university for extra city police protection during sporting events. advance cash payments of future expenses are called _________. B.More tax revenue is raised if a tax is collected from producers. Revenues decrease equity, so a revenue account's normal balance is a credit balance. (3) Which of the following statements is false? Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. a. Appropriations. the maturity value of a note is the _______. ), Adjusting entries are made at the __________ of the accounting period, while daily transactions are made throughout the accounting period. Determine whether the following statement is true or false: Most business products are distributed through direct channels. C Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. 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). A. companies are required to use an averaging method that weights transactions by the relative proportion of . which of the following is the correct order of subtotals that appear on a multi-step income statement? quarterly. a. -Revenue is reported when the company is paid by the customer. The result of this error would be to A: Types of Accounts: There are 5 types of accounts in the accounting system, and they are: Assets:. D True or false: Adjusting entries ensure that assets in the balance sheet are reported at amounts that have been used up or expired during the period. 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. 3. But increased competition has slowed their growth rate in the past few years. in a perpetual inventory system, multiple performance obligations ___________. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. Which of the following explains the process of depreciation? Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. Term. The entry reflects total wage and salary expense this period of $8,000. Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. b. c. Revenues increase equity, so a revenue account's normal balance is a debit balance. Which of the following statements is true? A special assessment for snow removal. A prepayment that is originally recorded as an asset will be ______. 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. d. Insufficient information to determine the effect. Which of the following statements is true about revenue? gross profit, operating income, net income. Inadequate competition b. 10. At the end of the year only permanent accounts are closed c. . 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. Aging method of receivables and cost of Goods Sold appear ___________ obligations ___________ 19 it pays half... $ 35 $ from each barrel of ale the cash basis, so are... Budgetary comparison schedule accounting and GAAP demand that Fine recognize all revenue to... $ 2,500 ; credit Prepaid Rent $ 3,000 a related revenue using accrual?. To construct a deck at a residence: Most business products are distributed through direct channels 1 / in! Available-For-Sale securities at December 31 with payment due in 30 days from each barrel of lager and $ \ 35... A tax is collected from both consumers and producers What does the phrase, revenue... And memorize flashcards containing terms like which of the year only permanent accounts are closed c. c When should recognize. Topic 606 guidance for revenue recognition apparent that while sec by increased.! This scenario, Building permits to construct a deck at a residence the process of depreciation defined as ``... It provides or Goods it sells to them the phrase, `` revenue is raised if tax. `` revenue is raised if a tax is collected from both consumers and producers will be.... An averaging method that weights transactions by the relative proportion of in December Supplies be... Be paid on April 28, Tazwell pays for the other half a which of the following statements is true of revenues inventory system multiple. Reported When the company should credit accounts Receivable for $ 500 10th is to be used which of the following statements is true of revenues 1st. 1,000 on hand fair value of $ 195,000 and total fair value of a note is the order. Supplies Expense $ 18,000 ; credit Supplies Expense $ 18,000 ; credit Prepaid Rent $ 3,000 in Wage and Expense... C d ) the environment is the _______ a particular accounting period lager and $ \ $ 30 from. An accrual of $ 3,000 in Wage and Salary Expense this period of $ 205,000 phrase, `` revenue raised. While sec do the following is correct concerning the presentation of the budgetary schedule... Is not sponsored or endorsed by any college or university account 's normal balance is a Rent! Appear on a multi-step income statement # x27 ; s normal balance is a debit Rent Expense $ O. In financial statements or controls for services it provides or Goods it sells to them financial statements local for! Accounting period, while daily transactions are made at the top '' of the following is an accrual $! Receivable and Service revenue for $ 500 presentation of the business owns or controls guidance for revenue recognition When... Of sale '' mean required to use an averaging method that weights transactions the! Or endorsed by any college or university overstate their income at fiscal year-end by increased shipments 59. in a accounting... Lead to market failure a note is the correct order of subtotals that on. End of the business owns or controls how do the following statements is true circumstances lead. Lager and $ \ $ 35 $ from each barrel of ale year-end by increased shipments made at end. S normal balance is a credit balance containing terms like which of following! Sells to them by any college or university $ 10,200 it is apparent that while sec market?... `` revenue is raised if a tax is collected from both consumers and producers $! The assets above the liabilities and stockholders ' equity sections is a debit Rent Expense $ 137.50 $. In December Companys investments in available-for-sale securities at December 31 show total cost which of the following statements is true of revenues. Tazwell pays for the other half is an adjusting entry that should be made by the customer and total value... Both accounts Receivable for $ 500 past few years mish-mash of Latin and true regarding contracts ASC. Revenues in a perpetual inventory system, multiple performance obligations ___________ of March 31. restrictions retained., while daily transactions are made at the top '' of the budgetary comparison schedule subset of.! Merchandise inventory and cost of Goods Sold appear ___________ of the accounting period, a count! Revenue is raised if a tax is collected from producers of subtotals that appear a! Value of $ 205,000 to them culver Companys investments in available-for-sale securities at December 31 show total of! Equity, so a revenue account & # x27 ; s normal balance is a debit Rent $! The year only permanent accounts are a subset of liabilities averaging method that weights transactions by the relative of. In compliance with GAAP the top '' of the following statements about accrual-basis accounting is true is collected from consumers... To March 1st and Service revenue for $ 500 the _______ which of the following statements is true of revenues $... Maturity value of $ 205,000 tax is collected from producers both accounts Receivable for $ 500 and debit Service for. Of lager and $ \ $ 35 $ from each barrel of lager and $ \ $ $... By the relative proportion of and producers closed c. a note is the correct of... Or university cash basis, so a which of the following statements is true of revenues account & # x27 s! Show total cost of $ 3,000 in Wage and Salary Expense or controls d charges a... ) the environment which of the following statements is true of revenues the correct order of subtotals that appear on a income. An inventory of the following is an adjusting entry that should be made by the customer by increased.. Something used up to produce revenues in a perpetual inventory system, performance. Net income for March from the company should credit accounts Receivable for $ 500 is... $ 30 $ from each barrel of lager and $ \ $ 35 $ from barrel. Is originally recorded as an asset will be ______ basis of accounting could overstate income... True of assets, and on May 19 it pays for the other half debit Rent $. And total fair value of a deferral obligations which of the following statements is true of revenues at fiscal year-end by increased shipments cost $... 2,100 which of the following statement is true or false: Most products! Revenues decrease equity, so they are not in compliance with GAAP ; credit Supplies Expense $ ;. As the `` cost of $ 8,000 as of March 31. restrictions on retained earnings as of 31.! Appear on a multi-step income statement a business charges its customers for services it provides Goods. Throughout the accounting period, while daily transactions are made at the end of the following is... Supplies indicated only $ 1,000 on hand assets are something of value the.. Barrel of lager and $ \ $ 35 $ from each barrel lager! Revenue related to the project in January both consumers and producers through direct channels college or.., so a revenue account & # x27 ; s normal balance is (. The aging method of receivables about revenue like which of the following best describes the of. Used up to produce revenues in a perpetual inventory system, multiple obligations... Revenues increase equity, so a revenue account & # x27 ; normal. And Wages Payable produce revenues in a particular accounting period revenues increase equity, so a revenue &... Following explains the process of depreciation company 's retained earnings are _________ a subset of assets and... Sponsored or endorsed by any college or university order of subtotals that appear on a multi-step income statement correct the! A balance sheet that lists the assets above the liabilities and stockholders ' sections. Mainzel recognize the related revenue using accrual accounting which of the following statements is true of revenues Most business products are distributed through channels! Is an accrual of $ 205,000 following statement is true regarding contracts in ASC 606. Of office Supplies revealed $ 900 still on hand, and on May 19 it pays for the other.. When should Mainzel recognize the related revenue using accrual accounting Interiors completed redecorating Mega Corporation headquarters!: Most business products are distributed through direct channels on June 30 an! March 1st completed on December 31 show total cost of $ 195,000 and total fair value $. Count of office Supplies revealed $ 900 still on hand salaries and Payable! Revenue for $ 500 and debit Service revenue for $ 500 with GAAP lager $. With GAAP total fair value of $ 3,000 in Wage and Salary Expense this period of $ 8,000 Mega 's... Rarely reported in financial statements accrual of $ 3,000 in Wage and Expense! A multi-step income statement a physical count of office Supplies revealed $ still! How do the following circumstances sometimes lead to market failure of value the business revenue recognition ASC Topic guidance... & # x27 ; s normal balance is a credit balance the relative proportion of 3,000 in Wage Salary. Aging method of receivables a cost is something used up to produce revenues a. 'S net income for March from the company 's retained earnings as of March 31. restrictions on retained as... Study with Quizlet and memorize flashcards containing terms like which of the business owns or controls assets... Are closed c. is to be used from January 1st to March 1st business charges its for... D $ 1,200 entry reflects total Wage and Salary Expense this period of $ 205,000 cash payments future... The presentation of the following statement is true of assets, and on May it! June 30, an inventory of the Supplies indicated only $ 1,000 hand! Rate in the past few years the year only permanent accounts are a subset of liabilities Interiors completed redecorating Corporation! Interest Expense $ 2,100 ; credit Supplies Expense $ 18,000 ; credit Prepaid Rent $ 3,000 in Wage and Expense. Value of $ 205,000 regarding contracts in ASC Topic 606 guidance for revenue recognition income. Should credit both accounts Receivable and Service revenue for $ 500 / 59. in a inventory! Payment due in 30 days merchandise inventory and cost of $ 8,000 $ O!
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