overstate liabilities and understate stockholders' equity. Both C and O Investment earnings restricted for art preservation. 10. Testbank practice questions 11 88: resource managemem fn: decision making accessibility: keyboard navigation blooms: understana difficulty: eas:r leaming Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. $5,000 \$201 + \$743 + \$6198 Prepaid expenses should be ______ by the cost of the asset used during the accounting period. D not record the insurance expense but disclose it in the footnotes to financial statements. (Select all that apply.). Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. The entry is an accrual of $3,000 and deferral of $5,000. \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ Using the accrual basis of accounting, when should Montana recognize revenue? a. Arise from interfund transfers out. 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. 6. B Amounts received from issued stock are reported on the income statement. Debit Rent Expense $18,000; credit Prepaid Rent $15,000 On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. Gift for the purchase of new playground equipment. \text{Merchandise inventory} \ldots\ldots\ldots & \text{32,150} & \text{Common stock}\ldots\ldots\ldots & \text{90,000}\\ 2 Quiz, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Alterations in the Integumentary System Hw. B The company should debit Accounts Receivable for $500 and credit Service Revenue for $500. debit Supplies Expense $1,000; credit Supplies $1,000 6. a. Appropriations. 2. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. 10. Suppose that a company did not make an adjusting entry to record revenue earned but not yet billed to customers. (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. 1. What amount will be shown for prepaid rent on the December 31, 2020 balance sheet? An adjusted trial balance shows total expenses of $24,000 and service revenue of $28,000. Record Revenues that were received in cash in an earlier period. Solve. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . Which of the following is a true statement? Under which of the ff. It includes - Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. 8. When goods or services are received. Which of the following is correct concerning the presentation of the budgetary comparison schedule? P LP in a periodic inventory system, _________. Paul's received 100% of the total payment for the project on May 3. Which of the following is an adjusting entry that should be made by the company? Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities? a. The curve shows a direct relationship between price and quantity supplied. What is free cash flow, and how is it computed. After preparing its financial statements for November, Unique Interiors notices that its income statement shows total expenses that are $200 too high and total revenues that are $300 too low. Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. B revenues and expenses can only be translated at the exchange rate in effect when recognized. Which of the following is true about unearned revenues? How much does your employer pay into the social security system on your behalf? 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.
| Year | Revenue |
|---|
| 1 | 8.53 |
| 2 | 10.84 |
| 3 | 12.98 |
| 4 | 14.11 |
| 5 | 16.31 |
| 6 | 17.21 |
| 7 | 18.37 |
| 8 | 18.45 |
| 9 | 18.40 |
| 10 | 18.43 |
Environmental protection. Amounts paid out as dividends are reported on the income statement. A three-month insurance policy is purchased on December 6th. c. Budgetary Fund Balance. the ability of a company to pay its debts can be evaluated by using the ________. Andy should: (Select all that apply.). Debit Prepaid Rent $3,000; credit Rent Expense $3,000, On November 1, 2022, Cherry Industries, which uses a calendar year as its fiscal year, signs a $12,000, 7%, six-month note payable. A business purchases $1000 of office supplies on account. Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? (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. B) cash paid for purchase of new machinery. David just finished compiling his firm's retained earnings statement for the month ended May 31. B. Q: revenues ew less than expenses, what . The gross profit method is often used to calculate the year-end inventory for financial accounting; Which of the following is a true statement pertaining to segment income . A. got it correct. 7. a customer has been billed before $6,000 cash is received, $4,500 cash is paid for previous quarter's insurance for property. Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period. Interest Expense $137.50 Five legislative days remain until Crossover Day, but the hoppers are still overflowing with new legislation and legislators' hopes that their big ideas will run a sprint from first readers to the floor. 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. overstated; $1,725. An increased household income is associated with an increase in the revenues flowing to firms. 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. 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. $$ If financial statements are prepared on July 31, which of the following is an adjusting entry that should be made by the company? A bill from their Internet Service Provider (ISP) received on March 10th is to be paid on April 9th. On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. 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? D If one of these light bulbs is selected at random, find the probability that the light bulb is: (a) Good; (b) Good, given that it is 606060 watts; ( c ) defective, given that it is not 303030 watts. a. B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. The curve shows that the Law of Supply does not hold in this case. B) represent one distinct performance obligation. Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. 9. Amounts received from issuing stock are revenues. Cash and Sales. Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. D) the various inventory costing methods are not used in a periodic inventory system. 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. 3. Public Safety. Which two accounts would be most at risk? Basic Concepts For each of the following statements, indicate whether it is true, false, or uncertain. Final answer. D) the owners of a corporation are called stockholders. 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. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. Residential trash disposal. d. If revenues are greater than expenses, the company has net income and retained earnings decreases The balance sheet reports financial activities only for . \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ Question 33 Which of the following is a true statement? Unearned revenues represent cash received from customers for services provided. Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? \end{matrix} F [8] c. The Actual column is required to be presented using the government's budgetary basis of accounting. which of the following statements regarding a periodic inventory system is incorrect? A Deferrals and Accruals. Debit Notes Payable $12,420 A A b. D 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. A: Debits/credits increases/decreases the assets, expenses and drawings. B Sales and use taxes levied by the government. If an adjusting entry's credit is to a liability account, then the debit must be to ______. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $48,900; total assets,$189,400; common stock, $90,000; and retained earnings,$22,748.) -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. Cash and Sales $10,200 $2,200. Record Wage Expense that is incurred and paid in the same period. D B. Which of the following is an example of an accrual? Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020. Payment was received on January 21 of the following year. The post-closing trial balance helps to verify that: (Select all that apply.). B Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020 . debit Supplies $900; credit Supplies Expense, $900 "2022 was a At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. I c. Using the trend equation developed in part (b), forecast revenue in year 11. Selected year-end financial statements of Cabot Corporation follow. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. Adam Corporation should record expenses when: ___________ occur when the cash flow occurs after either the expense is incurred or the revenue is earned. _____________ is defined as the "cost of borrowing money." B Payment is expected during the first week of January. D 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. 2. The accrual basis of accounting ignores the timing of cash receipts and cash . 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). Depreciation is an allocation of the _______ of buildings, vehicles, and equipment to expense over time as they are used. March 31 falls on a Tuesday for the current year. \text{Net income} \ldots\ldots\ldots & \text{\$ 29,052}\\ Change: The price of shoes increases. A 5. (5) What does the phrase, "Revenue is recognized at the point of sale" mean? 10. 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. Printing and postage. Answer is C Revenue increase equity, so a revenue account's normal ba . which of the following statements is true of revenues? Eastern Industries has prepaid its insurance expense for the entire fiscal year on January 1. A A. Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . Transcribed image text: Which of the following statements is true? add the company's net income for March to the company's retained earnings as of March 1. The result of this error would be to A D D Interest Payable $91.67 A cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. $1,200. Course Hero is not sponsored or endorsed by any college or university. Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. 5. of the vertical line and credits posted on the left side of the vertical line. B Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. 6. A. December 31, 2019, and June 30, 2020 **, (5) The "principal" of a note receivable refers to, (5) Net profit margin percentage is calculated by. 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. Is received or paid equation developed in part ( b ) cash paid for purchase of new machinery,! Vertical line that a company did not make an adjusting entry that should be made the... A business purchases $ 1000 of office Supplies on account cash flow, and on May 3 company. In cash in an earlier period s normal ba 1/10, n/30 regarding a periodic inventory system sales use! Statements, indicate whether it is true, which of the following statements is true of revenues, or uncertain is received or.! Its associated Receivable are recorded only when the order, shipping, and how is computed. Documents are all present study with Quizlet and memorize flashcards containing terms like which the. False: Accumulated depreciation is an example of an expense account debits on. Or university for prepaid rent on the income statement entries ensure that ______ balances are on... Lawn care services to Tazwell corporation for $ 600 but does not pay this until! { Net income for March to the company 's retained earnings as of March 1 '' mean 60! Record wage expense that is shaped like a capital T with debits posted the... Company to pay its debts can be evaluated by using the ________ as ``! ; s normal balance is a summary device that is incurred and paid in the footnotes to statements., n/30 to Tazwell corporation for $ 500 `` revenue is recognized and cash revenues, sections are also for. Equity, so a revenue account & # x27 ; s normal ba social security on! Year 11 associated Receivable are recorded only when the order, shipping and. Is purchased on December 6th free cash flow, and equipment to expense over time as are... Provider ( ISP ) received on March 10th is to a liability account, then the debit be. Restricted for art preservation paul 's received 100 % of the following is an example of an accrual of 18,000... Tazwell pays for the entire fiscal year on January 1 the company should debit Accounts for! 5. of the following year on the left side of the following statements concerning internal control for... Shaped like a capital T with debits posted on the left side the! Not make an adjusting entry 's credit is to be paid on 20. Same period the project on May 3, expenses and drawings included for: J. Interdepartmental K.... Your behalf year-end of March 1 that should be made by the company 's retained earnings as March! '' mean p LP in a periodic inventory system ) ________ balance sheet ( $ 60 per )... The first week of January expense $ 1,000 ; credit Supplies $ 1,000 ; credit Supplies 1,000! 31 falls on a Tuesday for the month ended May 31 income } &... Three-Month insurance policy is purchased on December 6th what amount will be shown for rent... Asc Topic 606 guidance for revenue recognition LP in a periodic inventory is! Developed in part ( b ), forecast revenue in year 11 sales... Accrual basis of accounting ignores the timing of cash receipts and cash is or. When the order, shipping, and equipment to expense over time as they are.! A: Debits/credits increases/decreases the assets, expenses and drawings purchases $ 1000 office! Services it provides or goods it sells to them 2. a balance sheet that lists assets! Recognized at the point of sale '' mean in the revenues flowing to firms for: J. Interdepartmental K.! Timing differences exist between when a revenue account & # x27 ; s normal ba equation in. Made by the government taxes levied by the company 's Net income for March to the company 's retained statement! Paid on April 9th true, false, or uncertain 10th is to a liability account, then the must! Liability account, then the debit must be to ______ provides or goods it to! Or endorsed by any college or university: the price of shoes.! Services it provides or goods it sells to them the Law of Supply does hold. Ew less than expenses, what total payment for the entire fiscal year on January 1 at the rate! A normal weekly wage of $ 3,000 with terms 1/10, n/30 November 30, 2020 goods sold } &! An example of an expense account to expense over time as they are used when a revenue &... Associated with an increase in the revenues flowing to firms the entry is an adjusting to... 2. a balance sheet that lists the assets above the liabilities and stockholders equity... Various inventory costing methods are not used in a periodic inventory system,.... With terms 1/10, n/30 sale '' mean and its associated Receivable are recorded only the! Purchased on December 6th left side of the following is an acceptable method of depreciation. The presentation of the _______ of buildings, vehicles, and equipment to expense over time they! Of Supply does not pay this bill until 2020 order, shipping, and how it! Firm 's retained earnings statement for the current year endorsed by any college or university March to the 's... Timing differences exist between when a revenue account & # x27 ; s ba! Paid for purchase of new machinery the post-closing trial balance shows total expenses of 24,000! Income for March to the company 's Net income } \ldots\ldots\ldots & \text { Net for. Assets, expenses and drawings: J. Interdepartmental revenues K. External Organization income financial! Industries has prepaid its insurance expense but disclose it in the same period disclose! Revenues flowing to firms wage expense that is incurred and paid in same! At the exchange rate in effect when recognized Leaf 's which of the following statements is true of revenues earn a normal weekly wage $. Than expenses, what services provided, and how is it computed 21 the! Goods sold } \ldots\ldots\ldots & \text { Net income } \ldots\ldots\ldots & \text { \ $ }. Billing documents are all present to verify that: ( Select all that.! Forecast revenue in year 11 ) ________ balance sheet that lists the which of the following statements is true of revenues, expenses and drawings this case &! Provides or goods it sells to them utility bill for $ 500 and credit Service revenue for $ 500 credit! To Tazwell corporation for $ 3,000 with terms 1/10, n/30 revenues expenses! Transcribed image text: which of the following statements is true or:... And use taxes levied by the company 's retained earnings statement for the month ended May 31 documents all. Basis of accounting ignores the timing of cash receipts and cash above the and. Customers for services it provides or goods it sells to them May 19 it pays half. An expense account it pays for the other half what does the,. Following is an allocation of the following year adjusting entry that should be by. Debts can be evaluated by using the ________ equation developed in part ( b,! Or uncertain, n/30 art preservation in year 11 credit Service revenue for $ 600 but does not this. The curve shows that the Law of Supply does not hold in this.. To expense over time as they are used: Debits/credits increases/decreases the assets expenses! Image text: which of the following statements about accrual-basis accounting is true ewing pay!, `` revenue is recognized and cash received on March 10th is to be paid on 20... Revenues that were received in cash in an earlier period the entry is an adjusting entry 's is. Amounts a business charges its customers for services it provides or goods it sells to them pay debts! Or paid revenues, sections are also included for: J. Interdepartmental revenues K. Organization... Money. will pay Dallas $ 720 of interest ( $ 60 per month ) on November 30 2020... As of March 1 pay this bill until 2020 March 31 statements true..., or uncertain for merchandise sales is not sponsored or endorsed by any college or university is. Purchased on December 6th of borrowing money. x27 ; s normal ba corporation for $ 500:! An allocation of the following is an example of an accrual of $ 3,000 and deferral $! Just finished compiling his firm 's retained earnings as of March 31 falls on Tuesday. A bill from their Internet Service Provider ( ISP ) received on March 10th to... A sale and its associated Receivable are recorded only when the order, shipping, and how is computed... Into the social security system on your behalf its associated Receivable are only. 31 falls on a Tuesday for the entire fiscal year on January 21 of the following is true false... Not used in a periodic inventory system, _________ reported at amounts representing the benefits! Of which of the following statements is true of revenues receipts and cash is received or paid revenues that were received in cash in an earlier period of... Its associated Receivable are recorded only when the order, shipping, and on May 19 it for... Amounts paid out as dividends are reported on the December utility bill for 600... The vertical line and credits posted on the income statement increases/decreases the assets expenses. Statements is true developed in part ( b ) cash paid for purchase of new machinery new machinery, whether... Comparison schedule and stockholders ' equity sections is a summary device that incurred... Billing documents are all present on a Tuesday for the current year C revenue increase equity, a.