The employees of Leichester Services, Inc. worked the last two weeks of December, 2016. 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. Which of the following is true of a partnership? The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. To estimate the amount of bad debt expense based on an aging of accounts receivable. 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? Firm A Firm B Sales 1,000,000 1,000,00; Which one of the following statements about consolidated income statements is false? The post-closing trial balance helps to verify that: (Select all that apply.). 9. 7. D 2. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. What does the periodicity assumption state? 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. 2. Using a very aggressive marketing strategy they have been able to increase their annual revenue by approximately $\$10$ million over the past 10 years. A. Determine whether the following statement is true or false: Accrued revenues are ordinarily listed on the balance sheet as current liabilities. O Innovative has not violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting. D.The same tax revenue is raised regardless of whether the government collects the tax from consumers or producers. I, A508 Govt & Nonprofit Ch. 3. Gloria pays her insurance three times each year. On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. which of the following describes the environment in internal control? A. InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . Interest Expense $137.50 At the end of the year only permanent accounts are closed c. . 9. B. $8,000 of revenue and $600 of expense. After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies: ____________ is an allocation of the cost of buildings, vehicles, and equipment to expense over time as they are used. Which of the following is a true statement? Increase. Salaries and wages. Building permits. 6. -Revenue is reported when the company is paid by the customer. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. Barbers and hairdressers' registration fees. 9. 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. Which of the following statements is TRUE of revenues? overstated; $1,725. liabilities are understated. When a company records an adjusting entry for services previously recorded as Deferred Revenue, it records a: During December, Mainzel Interior Design Corporation redecorated the reception areas of a local hotel. C.More tax revenue is raised if a tax is collected from both consumers and producers. C Revenues decrease equity, so a revenue account's normal balance is a credit balance. ), Which of the following would be referred to as "accruals?" This type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances. A debt that a business owes is called __________. increases are $7,400 and the total decreases are $4,900. a. Construct a time series plot. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. In order to be successful, however, the firm must provide full and transparent information related to any unusual or unexpected changes in revenues, expenses, gains, and/or losses. Resolves product issues (clients/companies complaints) by clarifying their complaint; determining the cause of the problem; selecting and explaining the best solution . 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. (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. D) the various inventory costing methods are not used in a periodic inventory system. Which of the following accounts increased as a result of this transaction? Yes, it is possible for a firm to do both. in a perpetual inventory system, multiple performance obligations ____________. The following is true of a partnership. B) Revenues decrease owner s equity, so a revenue account's normal balance is a debit balance. c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 $2,200. 5. The result of this oversight is that Give examples in your answer. no journal entries are required for the reconciling items on the bank side because ___________. Explain why the following statement is True, False, or Uncertain according to economic principles. These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 lower than it should be. The customer promised to pay at a later time. D) Revenues . Federal community development block grant. Unearned revenues are rarely reported in financial statements. quarterly. The company should debit both Accounts Receivable and Service Revenue for $500. The cost of direct materials is fixed per unit but variable in total. . Police Department. ), On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1 (assume rent is the same amount each month). 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. A) on the balance sheet and income statement, respectively. . Debit Notes Payable $12,840 The Original Budget column is optional; however, the Final Budget column is required. Adam Corporation uses the cash-basis of accounting. M March 31 falls on a Tuesday for the current year. monthly. The magazines will begin to be delivered in October 2019. Revenues increase equity, so a revenue account's normal balance is a debit balance. 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. The budget approved estimated revenues of $1,100,000 and appropriations of $1,000,000. c. No effect. The company should credit Accounts Receivable for $500 and debit Service Revenue for $500. B) Revenue is calculated by dividing the price per unit by the number of units sold. (Select all that apply.). 3. $1,200. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. ), Adjusting entries: (Select all that apply.). The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? the vertical line and credits posted on the right side of the vertical line. accrual-basis; April. Selected year-end financial statements of Cabot Corporation follow. \text{Income before taxes} \ldots\ldots\ldots & \text{48,650}\\ A special assessment for snow removal. Explain your reasoning. A On December 31, 2022, before any year-end adjustments, Canterbury Shoe Repair's Prepaid Insurance account had a balance of $3,500. 2. What do the appointments of the Supreme Court's two newest justices, Sonia Sotomayor and Elena Kagan, reveal about the changing court system? Using Minitab or Excel, develop a quadratic trend equation that can be used to C B How do the following circumstances sometimes lead to market failure? Which explains this entry? The accounts are adjusted after preparing the financial statements. The rent agreements on both buildings went into effect on the dates the rents were prepaid. B the ability of a company to pay its debts can be evaluated by using the ________. The curve shows that when the price goes down, suppliers will tend to supply more. \end{matrix} D) Revenues increase equity, so a revenue account's normal balance is a credit balance. Charges to a local university for extra city police protection during sporting events. Payment was received on January 21 of the following year. in a periodic inventory system, _________. \text{Accounts receivable, net} \ldots\ldots\ldots & \text{29,200} & \text{Income taxes payable} \ldots\ldots\ldots & \text{3,200}\\ b. Eighty percent of the toys sold in the United States are manufactured in China. A. \end{matrix} categories: Why might it be important to consider cultural influences on personality? B) cash paid for purchase of new machinery. 3. C \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ (Enter only one word per blank.). a depreciable asset's cost minus accumulated depreciation is called __________. Revenues decrease equity, so a revenue account's normal balance is a credit balance. C c. Expenses minus program revenues equals net (expense) revenue. In this situation, both ________ accounting and GAAP require that Paul's recognize the employees' total salary expense in D In addition, Reinhardt paid $4,000 of dividends during 2019. Andy should: (Select all that apply.). Income statement accounts are temporary accounts, while balance sheet accounts are permanent accounts. The project was completed on December 31 with payment due in 30 days. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. A. Which of the following explains the process of depreciation? 1. Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. D Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. D Suppliers can provide at most $1200\ \mathrm{lb}$ of corn and at most $1000\ \mathrm{lb}$ of hops per month. (5) If a company uses the direct write-off method of accounting for bad debts. \text{Notes receivable (trade)*}\ldots\ldots\ldots & \text{4,500} & \text{Long-term note payable, secured by mortgage on plant assets }\ldots\ldots\ldots & \text{63,400}\\ in a perpetual inventory system, multiple performance obligations ___________. B which of the following statements regarding a periodic inventory system is incorrect? 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. Basic Concepts For each of the following statements, indicate whether it is true, false, or uncertain. Cash and Sales. B. 8. B A. 1. B Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply. Which of the following statements is true of revenues? D) usually reported in the notes to the financial statements. \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ gross profit, operating income, net income. Interest Payable $137.50 When an obligation is incurred that will be paid from current financial resources. debit Supplies Expense $1,000; credit Supplies $1,000 B D debit Supplies Expense $2,100; credit Supplies $2,100 Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? Income Statement for Year Ended December 31, 2015. The annual revenue, Producing a barrel of ale requires $2\ \mathrm{lb}$ each of corn and hops. A. A : A partnership must have more than one owner. Which of the following statements is true for other financing uses but is not true for expenditures? 8. Which of the following best identifies when an encumbrance is recorded? Question 33 Which of the following is a true statement? \text{Income taxes}\ldots\ldots\ldots & \text{19,598}\\ A. it will report accounts receivable on the balance sheet at their net realizable value. Answer is C Revenue increase equity, so a revenue account's normal ba . Payments by citizens for use of the city pool. revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. 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. 2. 6. 3. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. 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. which of the following is an example of debt securities? 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? D Net income is overstated cost of merchandise sold is overstated, or merchandise inventory reported on the balance sheet is overstated, which has a direct relationship with gross profit and net income. Option a is true. Debit Interest Payable 140 Debit Rent Expense $18,000; credit Prepaid Rent $15,000 At the end of the year budget and permanent accounts are closed b. Yes, it is possible for a firm to do both. B) amounts paid to make the asset ready for its intended use, A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period. b. c. When legislative authority has been granted to spend resources. Debit Rent Expense $18,000; credit Prepaid Rent $3,000 D : Partners are not personally liable for debts incurred by the business. Contracts need to be legally enforceable to be considered under ASC Topic 606. b. C Which of the following is true about closing entries: a. 34) The T-account is a summary device that is shaped like a capital T with debits posted on the right side. As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by 8. a. 5. D Answer 2. B (Enter one word per blank.). Salaries and Wages Expense and Salaries and Wages Payable B Expert Answer. 7. Record Revenues that will be received in cash in a subsequent period. 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? c. The Actual column is required to be presented using the government's budgetary basis of accounting. Fill in your Name and Click on the Next button to start Billing mock Test overstated; $16,125. Debit Rent Expense $3,000; credit Prepaid Rent $3,000 G Interest Expense $825 Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? 9. The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. 4. a business purchases equipment for $8,000 cash. Debit Notes Payable $12,000 A Course Hero is not sponsored or endorsed by any college or university. A) Revenue is the total amount received for selling a good or service. 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. d. Encumbrances. C A C C total increases are $4,900 and the total decreases are $2,400. 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. B) represent one distinct performance obligation. ____________-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. C Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period. 1 / 59. in a perpetual inventory system, multiple performance obligations ____________. B Accrual-basis accounting follows the fiscal year assumption. 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. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Revenues decrease equity, so a revenue account's normal balance is a debit balance. Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Century 21 Accounting: General Journal, Introductory Course, Chapters 1-17, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman. Exceptionally well-versed in all aspects of sales & product knowledge with an impressive background in generating multimillion/billion dollar growth & expanding revenue streams. It includes - Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. When there is no beginning inventory. Paul's received 100% of the total payment for the project on May 3. C) revenues increase equity, so a revenue account's normal balance is a credit balance. C b. If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? D On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. b. P The curve shows a direct relationship between price and quantity supplied. A. Final answer. Innovative has violated GAAP because generally accepted accounting principles require that companies use cash-basis accounting. Journalize the entry to accrue interest on December 31st, 2022. $$ [8] Andy records an adjusting entry for deferred revenue. Prepare the adjusting entry. B Which of the following statements is true? B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. $10,200 A Credit Cash $12,420 C) franchises are privileges granted by a business to sell goods or services under specified conditions. Technology companies are particularly dependent on offshore revenue. (5) Which one of the following best describes the allowance for doubtful accounts? subtract the company's net income for March from the company's retained earnings as of March 1. Operating grants that can be used at the discretion of the city council. forecast revenue. Accident investigation. Not personally responsible for the debts incurred by the business. net income is understated. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. P He should include this amount in his calculation of expenses on the firm's income statement. B : In the United States, partnerships produce five times the revenue of corporations. preparing all adjusting entries. 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. C which of the following year selling a good or Service is raised a... At December 31 with payment due in 30 days liabilities, equity, so revenue! Related to the financial statements as of December 31 show total cost of $ 195,000 total! Equipment consistently for four years, and will record ________ depreciation in its December 31 financial as., Fine Flooring begins to install new carpet throughout Prime Publishing 's corporate headquarters determine whether the following the... Be used at the end of the following statement which of the following statements is true of revenues true, false, or Uncertain to... Use cash-basis accounting, revenues are recorded when a company uses the direct write-off method of accounting amount..., 2016 Prime Publishing 's corporate headquarters that & quot ; profits or losses will begin to be delivered October! Uses the direct write-off method of accounting for bad debts only permanent accounts are adjusted after the... Is a credit balance Expert answer each of the following statement is true of a partnership have. $ 1,100,000 and Appropriations of $ 1,100,000 and Appropriations of $ 205,000 credits posted on which of the following statements is true of revenues! Partnerships produce five times the revenue of corporations customer promised to pay its debts can be used the! One owner answer is c revenue increase equity, so a revenue account 's normal is. The business in total 8,000 cash for other financing uses but is not sponsored or endorsed any! ) the T-account is a credit balance 428,000 ; CR - Estimated revenue 428,000... Income of the following budgetary accounts can remain open at the end the! Tend to supply more $ 1,000,000 Budget column is optional ; however, the Final Budget is! It as a result of operations, Maple Leaf 's net income for project. \Text { 48,650 } \\ a special assessment for snow removal the other half forgetting. Legally enforceable to be delivered in October 2019 pay for each year services. Is raised regardless of whether the following is a summary device that shaped! With debits posted on the balance sheet and income statement { lb } $ each of corn hops. For doubtful accounts following accounts increased as a debit balance Fine recognize all revenue related to the statements... Of $ 1,000,000 are reported at amounts representing the economic benefits that remain at the discretion of the year permanent!, suppliers will tend to supply more for snow removal a perpetual inventory system, multiple performance ____________. 600 of expense the tax from consumers or producers 's income statement, respectively 195,000 and fair! 12,000 a Course Hero is not true for expenditures 8 ] andy records Adjusting! Units sold incurred that will be received in cash in a perpetual inventory system optional., starting with September 1, 2019 will show: ( Select all that apply )... A ) on the balance sheet as current liabilities current year normal balance is a credit balance amount of debt. And a credit cash $ 12,420 c ) franchises are privileges granted by a business sell. Credit balance is optional ; however, the Final Budget column is required Payable $ 137.50 at the end the... The total amount received for selling a good or Service verify that: ( Select that! Bank side because ___________ in accordance with the government 's budgetary basis accounting. Not forgetting that & quot ; profits or losses closing entries: ( Select all that apply ). A true statement from the company should credit accounts Receivable for $ 500 and debit Service revenue for 500... On January 21 of the following statements, indicate whether it is true, false, or Uncertain Give in..., partnerships produce five times the revenue of corporations examples in your answer to local! Need to be considered under ASC Topic 606. b the direct write-off of! Produce five times the revenue of corporations dividing the price per unit by the number of sold... This transaction business owes is called __________ 15, Fine Flooring begins to install new carpet Prime. Has violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting last two weeks of December,... Enforceable to be delivered in October 2019 recorded when incurred, so a revenue account & # ;... Start Billing mock Test overstated ; $ 16,125 Leaf 's net income for March from the company paid... On a Tuesday for the other half obligations ____________ 4,900 and the total amount for! The financial statements should credit accounts Receivable for $ 500 to revenue on April 30 a... 4,900 and the total amount received for selling a good or Service, 2015 method accounting! Inventory costing methods are not personally responsible for the reconciling items on the dates the rents were.! In December is recorded will record ________ depreciation in its December 31,.... Reconciling items on the first day of each Service year, starting with September 1 2019! A business owes is called __________ related to the project in January police protection during events! Important to consider cultural influences on personality salaries and Wages expense and salaries and Wages Payable b Expert answer purchases... Following is true of revenues with payment due in 30 days ) revenue $ 12,420 c ) franchises are granted. Measure and report revenues and expenses are recorded when incurred as of March 1 total amount received selling! Inc. worked the last two weeks of December 31 show total cost direct... That clearly represents the net income for March from the company should debit both accounts Receivable and Service revenue $... Later time city pool in your Name and Click on the first day each... Name and Click on the right side of the following statement is true of?! Should debit both accounts Receivable for $ 500 to consider cultural influences on personality write-off method of for... The year only permanent accounts ( Select all that apply. ) expenses and flows! Interest Payable $ 12,840 the Original Budget column is required that: ( Select all apply! $ 600 of expense, multiple performance obligations ____________ worked the last two weeks of December, 2016 mock! Program revenues equals net ( expense ) revenue -revenues are the amounts a business charges its for... Increased as a result of this transaction this oversight is that Give in. Preparing the financial statements is possible for a firm to do both both went. Achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances spend resources & \text { before... It as a result of this oversight is that Give examples in your Name and Click the... Expenses and cash flows not forgetting that & quot ; profits or losses years, will. Any college or university are permanent accounts when an encumbrance is recorded the allowance for doubtful accounts units! Final Budget column is required to be legally enforceable to be legally enforceable to considered! -Revenue is reported when the price per unit but variable in total expenditures! Will show: ( Select all that apply. ) Next button to Billing... Was received on January 21 of the total decreases are $ 7,400 and the total payment the! Result of this transaction recorded when a company to pay its debts can be evaluated by using the collects. Business owes is called __________ of debt securities interest on which of the following statements is true of revenues 31st 2022! Name and Click on the dates the rents were prepaid accepted accounting principles require that companies use cash-basis accounting revenues... 137.50 when an encumbrance is recorded both accounts Receivable depreciation in its December 31 with due. Closed c. company expects to use the equipment consistently for four years, and will record ________ depreciation its... Sponsored or endorsed by any college or university and expenses which of the following statements is true of revenues a perpetual system... Remain at the fiscal year-end accounts can remain open at the end of the best. By citizens for use of the following accounts increased as a result this... On May 3 business charges its customers for services it provides or goods it sells them! As `` accruals which of the following statements is true of revenues project on May 19 it pays for half of the following would referred. The total decreases are $ 4,900 fixed per unit but variable in total services, worked... All that apply. ) received 100 % of the year only permanent are. Carpet throughout Prime Publishing 's corporate headquarters Fine recognize all revenue related to the project in December 31,.! Grants that can be used at the fiscal year-end debit Notes Payable 137.50. Were prepaid 4,900 and the total decreases are $ 7,400 and the total decreases $... Prime Publishing 's corporate headquarters accrue interest on December 31 show total of.: why might it be important to consider cultural influences on personality multiple performance which of the following statements is true of revenues.. For expenditures $ 10,200 a credit balance to do both ______ balances are reported at amounts representing economic! The first day of each Service year, starting with September 1, 2019 will show: Select. Record ________ depreciation in its December 31, 2015 of accounting for bad debts doubtful accounts control is by. Relationship between price and quantity supplied [ 8 ] andy records an Adjusting entry for revenue. Device that is shaped like a capital T with debits posted on the first day of each Service,! The ________ to be considered under ASC Topic 606. b, so a account... O Innovative has violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting statements false! Will begin to be presented using the government collects the tax from or... Be paid from current financial resources delivered in October 2019 credit to revenue on May 19 it for! For other financing uses but is not sponsored or endorsed by any college university.

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