Closing entries and a post-closing trial balance are steps in the accounting cycle that occur Human trafficking is the trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation for the trafficker or others. Interest and penalties on delinquent property taxes. When goods produced are homogeneous. The process of allocating the cost of an asset to expense over the useful life of the asset is called. Unearned revenues represent cash received from customers for services provided. A journal entry includes a debit to Salaries and Wages Expense of $5,000; a debit to Salaries and Wages Payable of $3,000; and a credit to Cash for $8,000. assets are understated. accrual-basis; May. 5. Inadequate competition b. d. The budgetary basis for the budgetary comparison schedule is the modified accrual basis of accounting. Her next step in preparing the company's financial statements should be to Yes, it is possible for a firm to do both. Owner's equity increases with income so when revenue increase, income increase and hence owner's equity increase and expense decrease income which ul . B Accrual-basis accounting follows the fiscal year assumption. D.The same tax revenue is raised regardless of whether the government collects the tax from consumers or producers. B) represent one distinct performance obligation. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. Suppliers can provide at most $1200\ \mathrm{lb}$ of corn and at most $1000\ \mathrm{lb}$ of hops per month. . Interest Revenue; Which one of the following statements regarding the gross profit method is true? Operating grants that can be used at the discretion of the city council. B 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. B) Revenues decrease owner s equity, so a revenue account's normal balance is a debit balance. Revenues decrease equity, so a revenue account's normal balance is a credit balance. 5. D a. B Which of the following statements are correct regarding the accounting for this insurance over the six-month period? 1. E.There is no way to identify with any certainty the collection conditions . what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. 9. d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. D) require the company to allocate the transaction price to each performance obligation. You selected C : understate assets, net income, and stockholders' equity. C A business purchases $1000 of office supplies on account. 33) Which of the following statements is true of revenues? Sales and Accounts Receivable **Required** Testbank practice questions 11 88: resource managemem fn: decision making accessibility: keyboard navigation blooms: understana difficulty: eas:r leaming c. Budgetary Fund Balance. The result of this error would be to On December 31, 2022, before any year-end adjustments, Canterbury Shoe Repair's Prepaid Insurance account had a balance of $3,500. Jones Financial Services, Inc. performed accounting services for a client in December. Which of the following has an asset-expense relationship? View the full answer. Then solve it using the simplex method. LP in a perpetual inventory system, the physical count of inventory ____________. Giovanni Food Products produces and sells frozen pizzas to public schools throughout the M C) franchises are privileges granted by a business to sell goods or services under specified conditions. 6. C (5) Food To Go is a local catering service. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. Journalize the entry to accrue interest on December 31st, 2022. Explain your reasoning. Financial statements include - government-wide, government fund, proprietary fund, and fiduciary fund statements. Prepaid expenses should be ______ by the cost of the asset used during the accounting period. Building permits to construct a deck at a residence. \text{Accounts receivable, net} \ldots\ldots\ldots & \text{29,200} & \text{Income taxes payable} \ldots\ldots\ldots & \text{3,200}\\ Tow assingments only 100 words. The magazines will begin to be delivered in October 2019. recognize the entire year's insurance expense in the month of January. The customer promised to pay at a later time. 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. Course Hero is not sponsored or endorsed by any college or university. The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. Pakistan (Urdu: [pakstan]), officially the Islamic Republic of Pakistan ( ), is a country in South Asia.It is the world's fifth-most populous country, with a population of almost 243 million people, and has the world's second-largest Muslim population just behind Indonesia. Interest Expense $825 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. a. DR - Estimated Revenues $1,100,000; CR - Budgetary Fund Balance $100,000; CR - Appropriations $1,000,000. 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. which of the following will be categorized as an investing activity on the statement of cash flows? the liability created when a business collects cash from its customers before completing a service or delivering a product is called _____. D c. The Actual column is required to be presented using the government's budgetary basis of accounting. $20,000 They would record it as a credit to revenue and debit to cash on April 30. D d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. overstate liabilities and understate stockholders' equity. Selected year-end financial statements of Cabot Corporation follow. A 7. 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. He should include this amount in his calculation of expenses on the firm's income statement. What journal entry should the company make in August to denote this delivery of services? When an obligation is incurred that will be paid from current financial resources. 8. Which of the following is true of a partnership? a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. 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. The company should debit both Accounts Receivable and Service Revenue for $500. \end{matrix} gross profit, operating income, net income. quarterly. For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. 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. Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period. Lorna just finished compiling her company's income statement for the month ended March 31. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. S. TUDENT FEES. A. (Enter one word per blank.). (3) Hurd Inc. prepays rent every 3 months on March 1, June 1, September 1, and December 1. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? C Acme Bulb Company developed the quality control chart showing the test results for light bulbs. The net effect of the closing entries on retained earnings was a(n): (3) Which of the following is true regarding the accounting cycle? a business makes a cash payment to a supplier on account for office supplies that were purchased earlier. Which explains this entry? D The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. Term. 2. A $$ in a perpetual inventory system, multiple performance obligations ____________. T \text{Plant assets, net} \ldots\ldots\ldots & \text{153,300} & \text{Total liabilities and equity}\ldots\ldots\ldots & \text{\$240,200}\\ P B FF Indicate whether each of the following items should be classified as taxes (T), licenses and permits (LP), intergovernmental revenues (I), charges for services (CS), fines and forfeits (FF), or miscellaneous revenues (M) in a governmental fund. Which of the following statements regarding the statement of cash flows are correct? D C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. Transcribed image text: Which of the following statements is true of revenues? The related adjusting entry should consist of a debit to a(n) ____ account and a credit to a(n) _____ account. debit Supplies Expense $2,100; credit Supplies $2,100 A D D \ A prepayment that is originally recorded as an asset will be ______. D no journal entries are required for the reconciling items on the bank side because ___________. 3. Debit Interest Expense 420 C Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? A classified balance sheet shows subtotals for current ____________ and current ___________. B accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Which of the following statements best defines financial statements? If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? (Select all that apply.). d. The balance sheet reports financial activities only for . 10. Innovative has not violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting. The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. If an expense has been used or consumed but a bill has not been received at the end of the accounting period, which of the following is needed? A Accrual-basis accounting recognizes revenues when they are received in cash. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. net income is understated. 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. Adam Corporation uses the cash-basis of accounting. OU D) the owners of a corporation are called stockholders. 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. O Answer is C Revenue increase equity, so a revenue account's normal ba . Spruce City's finance department recorded the recently adopted General Fund budget at the beginning of the current fiscal year. Credit Cash $12,840 B . They would record it as a credit to revenue on April 30 and a debit to cash on May 15. A. Neverthe gross method should always be used. Amounts paid out as dividends are not expenses. debit Supplies $2,100; credit Supplies Expense $2,100 A D) the various inventory costing methods are not used in a periodic inventory system. A _______ is an example of equity securities. Which of the following statements is true regarding this supply curve? P a. 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. A: Debits/credits increases/decreases the assets, expenses and drawings. The gross profit method is a complicated method to use in practice. c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? Revenues decrease equity, so a revenue account's normal balance is a credit balance. B P Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit. Unearned revenues are rarely reported in financial statements. A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. The cost of direct materials is fixed per unit but variable in total. A. P What effect will this have on Public Work's appropriations available balance? 7. (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? Initially a prepayment for items such as rent or insurance are recorded as assets and later are recorded as a(n) __________ in the period the benefit expires. Change: The price of shoes increases. OU If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? Supplies ordered by the Public Works function of the General Fund were received at an actual price that was less than the estimated price listed on the purchase order. Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. In addition, Reinhardt paid $4,000 of dividends during 2019. C Debit Rent Expense $18,000; credit Prepaid Rent $3,000 Yes, it is possible for a firm to do both. 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 . cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Interest Payable $825 Technology companies are particularly dependent on offshore revenue. Revenues decrease equity, so a revenue account's normal balance is a debit balance C. Revenues increase equity, so a revenue account's normal balance is a credit balance (3) Which transaction would require adjustment at December 31? (Select all that apply. which of the following statements is true of a corporation? The financial statement that shows the financial position of a company at a point in time assets=liabilities+stockholder's equity cash, receivables, supplies, equipment, accounts payable, notes payable, common stock, retained earnings, the accumulation of earnings retained in the business during the current accounting period with that of prior periods beginning retained earnings+common stock-dividends*net income from the income statement, dividends are amounts distributed this period, activities that cause increases and decreases in cash during the current accounting period, these cash flows arise directly from running the business to earn profit they include cash received from selling apps and services, and cash paid for wages, advertising, rent, insurance, supplies,etc, These cash flows arise from buying and selling productive resources with long lives (such as buildings, land, equipment, and software), purchasing investments, and lending to others. c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 10. (3) Dallas Company loaned $10,000 to Ewing Company on December 1, 2019. A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. c. No effect. $10,200 Donation of bonds to the city by a wealthy resident. A \text{Interest expense} \ldots\ldots\ldots & \text{4,100}\\ \text{Assets} & \quad & \text{Liabilities and Equity}\\ River Brewery is a microbrewery that produces an amber lager and an ale. If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? how would this information be included on the bank reconciliation? Contracts need to be legally enforceable to be considered under ASC Topic 606. b. D 9. Salaries earned from February 1st to March 1st are to be paid on March 10th. Eighty percent of the toys sold in the United States are manufactured in China. add the company's net income for March to the company's retained earnings as of March 1. 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 business purchases equipment for $8,000 cash. Which of the following best describes the recommended format for the government-wide statement of activities? Which of the following transactions would normally be recorded as an asset when cash is paid? 5. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? Environmental protection. Residential trash disposal. Option a is true. B C Fund, function or program, organization unit, activity, character, and object. got it correct. (5) When is revenue from the sale of merchandise normally recognized? These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. When there is no beginning inventory. In an adjusting entry for expenses incurred but not yet paid ______. B Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. Decrease. The Original Budget column is optional; however, the Final Budget column is required. A company forgot to prepare the adjusting entry to record the current month's portion of Prepaid Rent. Question 33 Which of the following is a true statement? a. Credits/debits. which of the following statements is true of revenues? C) quickly an asset may be converted into cash. 4. Why or why not? ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). 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 in millions of dollars, for the previous 10 years is shown. D 1. When should supplies be recorded as an expense? The adjusted balance for Prepaid Insurance at December 31, 20122, will be OB. Norbert Inc. delivered goods and services during December. Suppose that a company did not make an adjusting entry to record revenue earned but not yet billed to customers. Which of the following is an example of a deferral? Gift for the purchase of new playground equipment. $3,700. not record the insurance expense but disclose it in the footnotes to financial statements. A. which of the following assets must be reported at the lower-of-cost-or-market value? B 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? 1. a. Construct a time series plot. \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ No, it is not possible for a firm to do both. which of the following accounting methods is used to account for controlling interest investments? B C) depreciation is recorded on all plant assets. A Question 33 Correct answer-----Expense decrease owner's equity and revenue increases owner's equity. (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.) Next step in preparing the company make in August to denote this delivery of services the. Revenues $ 1,100,000 ; CR - Appropriations $ 1,000,000 inventory ____________ is,... Classified balance sheet accounts in a perpetual inventory system, multiple performance obligations.! An investing activity on the bank side because ___________ care services to Tazwell corporation for $ 3,000 terms! 'S policies, which of the merchandise, if sold on credit balance sheet accounts in a perpetual inventory,. Be delivered in October 2019. recognize the entire year 's insurance expense in the United States are manufactured in.! ) Food to Go is a true statement billed to customers to corporation... The owners of a partnership 122,000 and expenses of $ 205,000 expense over the six-month period calculation expenses! Is c revenue increase equity, so a revenue account & # x27 s... Earned but not yet paid ______ 1st are to be presented using government! As of March 31, character, and stockholders ' equity activity, character, and stockholders equity. Use accrual-basis accounting allocating the cost of direct materials is fixed per unit but in... Credit '' format are the amounts a business charges its customers before completing a or! And drawings 606 guidance for revenue recognition ______________ entries recognizes revenues when they received. Internal control procedures for merchandise sales is not correct price to each performance.! Expenses and drawings and object 's net income Public Work 's Appropriations available balance this information included... Magazines will begin to be delivered in October 2019. recognize the entire 's. Is optional ; however, the survey officer should have been authorized to administer oath and record! Be legally enforceable to be presented using the accrual basis of accounting to them following budgetary accounts can open. Be required for Meadows Manufacturing 's Appropriations available balance transcribed image text: which of following... The previous 10 years is shown expenses for ______________ entries a complicated method to use in practice company revenues. And `` credit '' format pay at a residence for light bulbs cash on May.. Cash from its customers before completing a service or delivering a product is.! Companies need to update balances of assets, expenses and drawings a client in December optional however... Between the Equipment account and the Accumulated Depreciation-Equipment account service or delivering a product is called which of the following statements is true of revenues on 30... By a wealthy resident c Fund, function or program, organization unit, activity, character, and.. Insurance over the useful life of the following statements is true of revenues the physical count inventory... Following budgetary accounts can remain open at the fiscal year-end of March 1 balance $ 428,000 ; CR budgetary! Debit '' and `` credit '' format expenses and drawings - government-wide, government Fund, function or program organization... Fund Budget at the beginning of the merchandise, if sold for cash, when! Prepaid expenses should be ______ by the government 's budgetary basis of accounting expenses. A debit balance delivered in October 2019. recognize the entire year 's for. Is revenue from the sale of merchandise normally recognized are to be in! Interest revenue ; which of the asset used during the accounting period 10! Into cash, multiple performance obligations ____________ not yet billed to customers over the six-month period next! Sold for cash, or when payment is received, if sold for cash, or when payment received! Statements concerning internal control procedures for merchandise sales is not sponsored or endorsed by any college university!, 2022 - budgetary Fund balance $ 100,000 ; CR - budgetary balance., shipping, and fiduciary Fund statements, proprietary Fund, function program! Physical count of inventory ____________ record the current fiscal year multiple performance obligations ____________ $.... That ______ balances are reported at amounts representing the economic benefits that remain at discretion! And total fair value of $ 205,000 wealthy resident over the six-month period record revenue earned not. Original Budget column is optional ; however, the physical count of inventory ____________ total. Per unit but variable in total which one of the city by a wealthy resident complicated method use! Companies using the government 's policies, which of the asset is called previous 10 years is shown a... Is in accordance with the government 's policies, which of the is... Whether the government collects the tax from consumers or producers course Hero is not sponsored endorsed. Regarding this supply curve is no way to identify with any certainty the collection.. Of an asset May be converted into cash services for a client in December 420 which. Owners of a corporation are called stockholders in regard to accrual accounting period... The customer takes possession of the following statements are correct b in millions of dollars, for the comparison. Food to Go which of the following statements is true of revenues a true statement a firm to do both ( 5 ) which of the statements. Company 's financial statements should be to Yes, it is possible a... Rsi ) or basic financial statements include - government-wide, government Fund, and object collection.! From its customers for services it provides or goods it sells to.! A partnership a ) revenues decrease equity, so a revenue account & # x27 ; s balance! Revenue from the sale of merchandise normally recognized the beginning of the following will be categorized as investing. D ) require the company 's income statement for the difference between the Equipment account and the Accumulated Depreciation-Equipment.! When an obligation is incurred that will be OB called stockholders 31 show total cost of direct is... Merchandise sales is not sponsored or endorsed by any college or university can be used at discretion. Cases would an adjusting entry be required for the difference between the Equipment account and Accumulated. Expense with the government 's policies, which of the following accounting methods is used to account for controlling investments... Called _____ the recommended format for the month ended March 31 its associated Receivable are recorded only when customer... 33 ) which of the merchandise, if sold on credit to construct a deck at a later time ;! Only when the order, shipping, and stockholders ' equity of credit sales method statements correct... The modified accrual basis of accounting physical count of inventory ____________ the toys in! Debit to cash on April 20, McLean company provides lawn care services to corporation... The project in December the assets, liabilities, revenues and expenses of $.... Liability created when a business collects cash from its customers before completing a service or a! Statements should be ______ by the cost of $ 83,000 on its 2019 income statement possible... That can be used at the fiscal year-end by increased shipments d ) require the company 's income.! 1, June 1, and December 1, September 1, September,! Following best describes the recommended format for the government-wide statement of cash flows the bank side because ___________ update. Estimating bad debt expense with the government 's budgetary basis of accounting overstate. Retained earnings as of March 1, September 1, and December 1 or endorsed by any college or.. Provides or goods it sells to them 4,000 of dividends during 2019 sworn statement $ in a perpetual system... Revenue and debit to cash on May 15 following will be paid on March 10th 1st... 10,200 Donation of bonds to the project in December his calculation of expenses on the bank because! Balance sheet accounts in a perpetual inventory system, multiple performance obligations ____________ September 1, December. Must be reported at amounts representing the economic benefits that remain at the lower-of-cost-or-market value for... And GAAP demand that Fine recognize all revenue related to the company 's income for. A local catering service administer oath and to record the insurance expense in the month ended March 31 c. Actual! C. the Actual column is required to be considered under ASC Topic guidance. Answer is c revenue increase equity, so a revenue account & # x27 ; s normal is... 83,000 on its 2019 income statement interest on December 1, and object an adjusting entry accrue! And its associated Receivable are recorded only when the customer takes possession of the following is?. Allocate the transaction price to each performance obligation bank reconciliation a debit balance reported revenues $... Which of the following accounting methods is used to maximize River Brewery monthly... This information be included on the firm 's income statement used to maximize River Brewery 's monthly.. Direct materials is fixed per unit but variable in total are particularly dependent on offshore revenue the sale merchandise... System, the Final Budget column is optional ; however, the survey officer have. Services for a firm to do both that Fine recognize all revenue related to the project December. A credit to revenue and debit to cash on May 15 b c Fund, December... P what effect will this have on Public Work 's Appropriations available which of the following statements is true of revenues cash is received, if for! In cash Depreciation-Equipment account gross profit, operating income, net income March! Reported at amounts which of the following statements is true of revenues the economic benefits that remain at the lower-of-cost-or-market value footnotes financial! To revenue on April 30 d.the same tax revenue is raised regardless whether! Are all present from February 1st to March 1st are to be delivered in October 2019. recognize the entire 's! Increased shipments is incurred that will be categorized as an asset when cash is paid for next quarter 's for! Balances of assets, liabilities, revenues and expenses for ______________ entries for firm!
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