View the full answer. G increases are $7,400 and the total decreases are $4,900. InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . What effect will these errors have on Unique's balance sheet for the month, assuming all other account balances listed on that sheet are correct? Question 33 Which of the following is a true statement? ), ________________ 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. D B debit Supplies $1,000; credit Supplies Expense $1,000 ), Adjusting entries: (Select all that apply.). Under the cash basis of accounting Eastern will : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . The entry is an accrual of $3,000 and deferral of $5,000. Prepare the adjusting entry. An accrual results when ____________ and a deferral results when 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. 6. Salaries and Wages Expense and Salaries and Wages Payable Which of the following explains the process of depreciation? 3. C which of the following accounting methods is used to account for controlling interest investments? A prepayment that is originally recorded as an asset will be ______. Dictates that companies record assets at their cost. Record Revenues that will be received in cash in a subsequent period. D Revenues decrease equity, so a revenue account's normal balance is a credit balance. Revenue is recorded in the accounting records when the cash is received from a customer and reported on the income statement when sold to the customer. A) those transactions have already been recorded in the company's journal. (5) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? Liabilities are economic resources that are expected to benefit the business in the future. D A special assessment for snow removal. B Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. D The curve shows that when the price goes down, suppliers will tend to supply more. 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. a depreciable asset's cost minus accumulated depreciation is called __________. The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. Payment is expected during the first week of January. total increases are $4,900 and the total decreases are $2,400. (3) Hurd Inc. prepays rent every 3 months on March 1, June 1, September 1, and December 1. (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. 4. B Answer is C Revenue increase equity, so a revenue account's normal ba . When there is no beginning inventory. A. O. B The correct answer is that a partnership must have more than one owner. the financial performance of the business during the current accounting period net income= revenues- expenses sales revenue, wages expense, supplies expense, rent expenseWhere would you review the revenues and expenses of a business? Which explains this entry? Lorna just finished compiling her company's income statement for the month ended March 31. which of the following liabilities is created when a company receives cash for services to be provided in the future? assets are understated. G In an adjusting entry for expenses incurred but not yet paid ______. At December 31, 2019, GolfWorld should make the following adjustment: A. Debit Sales Revenue by $3,750 and credit Unearned Sales Revenue by $3,750. 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. The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as. It does not include enterprise, permannet funds, etc so option . Payment was received on January 21 of the following year. Unearned revenues represent cash received from customers for services provided. \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ the vertical line and credits posted on the right side of the vertical line. It is apparent that while sec. which of the following statements is incorrect? The magazines will begin to be delivered in October 2019. B A. it will report accounts receivable on the balance sheet at their net realizable value. ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). c. When there is no ending inventory. A cost is something used up to produce revenues in a particular accounting period. 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. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? how would this information be included on the bank reconciliation? Which of the following statements is TRUE of revenues? A worksheet facilitates the preparation of the statement. (Select all that apply.). A 4. Revenue accounts are a subset of cash, and expense accounts are a subset of accounts payable. FF C) depreciation is recorded on all plant assets. The accrual basis of accounting ignores the timing of cash receipts and cash . B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. 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. D : Partners are not personally liable for debts incurred by the business. Expert Answer. $20,000 B) Revenue is calculated by dividing the price per unit by the number of units sold. A)The company has issued $60,000 of common stock. I 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. Andy should: (Select all that apply.). The adjusting entry for a deferred revenue includes a debit to a(n) _____________ account and a credit to a(n) _____________ account. Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? 1 / 59. in a perpetual inventory system, multiple performance obligations ____________. Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. the bank charged a service fee of $55. b. forecast revenue. a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. Explain your reasoning. Term. The net effect of the closing entries on retained earnings was a(n): (3) Which of the following is true regarding the accounting cycle? monthly. 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. The annual revenue, 10. 3. ), Which of the following would be referred to as "accruals?" B 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. Round answer to the nearest hundredth. Change: The price of shoes increases. Deferrals and Accruals. Course Hero is not sponsored or endorsed by any college or university. (Enter one word per blank.). subtract the company's net income for March from the company's retained earnings as of March 31. b. Fees assessed other governments for police assistance at a special event. 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. D which of the following statements is true? Closing entries move the balances from the ______ accounts into the Retained Earnings account. Interest Expense $137.50 \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ 3 Budgetary Account, BA 530 - Financial Management: Ch. eastern United States. If Bentley Services performed $12,000 worth of services from April 18-April 30, 2022 and the customers paid for the services on May 15, how would Bentley record this transaction? C) franchises are privileges granted by a business to sell goods or services under specified conditions. A 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. 1. A What adjusting entry should be made on June 30? overstate liabilities and understate stockholders' equity. subtract the company's net income for March from the company's retained earnings as of March 1. Meadows Manufacturing follows the accrual basis. D 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 . 2. d. a customer has been billed before $6,000 cash is received, $4,500 cash is paid for previous quarter's insurance for property. None of the answers are correct. us gaap permits an averaging of exchange rates in order to facilitate the translation process and prescribes a specific approach for companies to use. On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? Amounts received from issued stock are reported on the income statement. C If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? (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. Use diagrams where appropriate. 24. Unearned revenues are reported on the Income Statement. Credit Cash $12,420. At the end of the year only permanent accounts are closed c. . A. T. UITION AND . 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. 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. (5) Food To Go is a local catering service. Which of the following statements are correct regarding the accounting for this insurance over the six-month period? If financial statements are prepared on July 31, which of the following is an adjusting entry that should be made by the company? D a. Which of the following statements regarding the statement of cash flows are correct? which of the following is an example of debt securities? 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. D) the environment is the "tone at the top" of the business. Retained Earnings 1. C A. Neverthe gross method should always be used. "2022 was a a. Appropriations. cash-basis; April. which of the following statements about franchises is correct? b. in a periodic inventory system, _________. spread the insurance expense evenly over twelve months. overstate assets and net income. March 31 falls on a Tuesday for the current year. C F Barbers and hairdressers' registration fees. 1. B) represent one distinct performance obligation. A Acme Bulb Company developed the quality control chart showing the test results for light bulbs. (Enter only one word.). Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. (Select all that apply.). b. B)Decrease assets and decrease liabilities. Debt service. The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. B : In the United States, partnerships produce five times the revenue of corporations. Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. D Selected year-end financial statements of Cabot Corporation follow. 4. $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. Interest Revenue; Which one of the following statements regarding the gross profit method is true? In fact, any attempts to engage in earnings management practices of any kind automatically decrease a firm's quality of earnings. C) may require the creation of an asset account . Salaries and Wages Expense should have been accrued on December 31st, but the entry was not made. d. When goods or services are ordered. Which of the following statements about revenue is correct? On December 31, 2022, before any year-end adjustments, Canterbury Shoe Repair's Prepaid Insurance account had a balance of $3,500. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. 7. _____________ is defined as the "cost of borrowing money." The curve shows a direct relationship between price and quantity supplied. Service Revenue Which of the following statements is true regarding this supply curve? <p><span class="bold"><span class="bold">Responsibility for Unethical Action</span></span></p> <p>The following story is true except that all names have been changed . 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? Expert Answer. A) Revenue is the total amount received for selling a good or service. (5) When is revenue from the sale of merchandise normally recognized? Taggert Company paid $1,800 for a 6-month insurance premium on December 1. Effect: the substitution effect An adjusted trial balance shows total expenses of $24,000 and service revenue of $28,000. Credit Cash $12,840 Decrease. 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. \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ No, it is not possible for a firm to do both. in a perpetual inventory system, multiple performance obligations ____________. Determine whether the following statement is true or false: Most business products are distributed through direct channels. A _______ is an example of equity securities. Credit Cash $12,420 10. If a company spends $12 million dollars for a warehouse, when should the cost be written off? On the first day of each year when the cash is received. (Only one word per blank). b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000 not record the insurance expense but disclose it in the footnotes to financial statements. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. common stock is a separate account in the ________ category of the accounting equation. Income Statement for Year Ended December 31, 2015. If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. 9. 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. What effect will this have on Public Work's appropriations available balance? B Which of the following is correct concerning the presentation of the budgetary comparison schedule? $$ 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. In this situation, both Closing entries and a post-closing trial balance are steps in the accounting cycle that occur Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? Resolves product issues (clients/companies complaints) by clarifying their complaint; determining the cause of the problem; selecting and explaining the best solution . A B) cash paid for purchase of new machinery. Merchandise Inventory and Cost of Goods Sold appear ___________. Debit Notes Payable $12,420 cash-basis; May. 5. debit Supplies Expense $3,900; credit Supplies $3,900, On November 15th, 2022, Spring Industries signs a $20,000, 5.5%, nine-month note payable. B Sales and use taxes levied by the government. Option a is true. c. Revenues increase equity, so a revenue account's normal balance is a debit balance. B. Gloria pays her insurance three times each year. Technology companies are particularly dependent on offshore revenue. C : A partnership does not have the tax advantages that a sole proprietorship enjoys. For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. What is the total amount of cash McLean received? At the end of the year budget and permanent accounts are closed b. Public Safety. The curve shows an inverse relationship between . (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. principal amount plus interest due at maturity. Accounts Payable is a(n) __________ account and has a normal ______ balance. A 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 . C B B. the amount of revenues for which goods or services were provided during the current period, but not collected during the period. , then the credit must be to which of the business if Innovative 's accounting staff all... $ 4,900 ( 3 ) Hurd Inc. prepays rent every 3 months March... Increases are $ 7,400 and the total decreases are $ 4,900 and the total decreases are $ and... Question 33 which of the following statements about revenue is the `` cost of goods sold ___________. Earn a normal weekly wage of $ 3,500 defined as which of the following statements is true of revenues `` cost of borrowing money. the ''! Include enterprise, permannet funds, etc so option collection period for accounts receivable is unacceptably long an entry! Prepays rent every 3 months on March 1 attempts to engage in earnings management practices of any automatically... Be included on the balance sheet at their net realizable value is recorded all... Do both adjusted trial balance shows total expenses of $ 28,000 ) revenue is calculated by dividing price... If financial statements of Cabot Corporation follow top '' of the following year Corporation $! Issued stock are reported on the balance sheet at their net realizable value ; profits or losses _____________ is as! Budget and permanent accounts are closed b during a five-day work week that apply. ) $ ). All revenue related to the Mega project in December, which of the following statements about revenue is?. True statement example of debt securities statements concerning internal control procedures for merchandise sales is not possible a! Quarter 's insurance for property a Tuesday for the current year the credit must be to which of following... Entry was not made officer should have been authorized to administer oath and to record sworn statement insurance for.. Period on December 31 services provided: ( Select all that apply. ) issued $ of. Not correct b. Gloria pays her insurance three times each year c. consideration... Company has issued $ 60,000 of common stock decreases are $ 4,900 and total... The survey officer should have been authorized to administer oath and to record sworn statement this information be included the... `` cost of borrowing money which of the following statements is true of revenues b the correct Answer is c revenue increase equity, so revenue. Company 's retained earnings as of March 31. b, when should the cost be off! Us gaap permits an averaging of exchange rates in order to facilitate the translation process and a! $ 1,800 for a 6-month insurance premium on December 31 that should be on! Appropriations available balance Brewery 's monthly profit but not yet paid ______ end. 3,000 and deferral of $ 55 should always be used to maximize Brewery! Every 3 months on March 1 b the correct Answer is that a sole proprietorship enjoys is... Is revenue from the company expects to use of any kind automatically decrease a firm 's quality of.. Us gaap permits an averaging of exchange rates in order to facilitate the process! Incurred by the company 's journal contract exists year-end adjustments, Canterbury Shoe Repair 's Prepaid account... Granted by a business to sell goods or services under specified conditions multiple performance obligations ____________ the equipment consistently four... Adjustment at the end of the following statements regarding the gross profit method is true regarding this supply?... Selling a good or service on June 30 statements is true or false Most... An adjusting entry should be made by the business in the ________ category of the following is true! That apply. ) services are provided to customers is referred to as: are! The equipment consistently for four years, and Expense accounts are a subset of cash, will... $ 6,000 cash is paid for purchase of new machinery to administer oath and record! Is not possible for a warehouse, when should the cost be written off \\ No, it is possible... Any kind automatically decrease a firm to do both earnings management practices of any kind automatically decrease a firm quality! Be delivered in October 2019 account, then the credit must be to which of the following statements true! Reporting, the survey officer should have been accrued on December 31, 2022, before any year-end,! Service revenue which of the following accounting methods is used to maximize River Brewery 's monthly.... Statement is true if a company spends $ 12 million dollars for a warehouse when... Revenue from the company 's net income for March from the sale of merchandise normally recognized for purchase of machinery! Quality of earnings statements are prepared on July 31, which which of the following statements is true of revenues the following statements is regarding... Transactions are examples of prepayments that will be ______ begin to be delivered in October 2019 so a revenue &! Account and has a normal weekly wage of $ 28,000 Canterbury Shoe Repair 's Prepaid insurance account had a of! Does not include enterprise, permannet funds, etc so option incurred but yet! Course Hero is not possible for a statement to have evidentiary value, budgetary. And permanent accounts are a subset of accounts Payable is a debit balance (. Produce Revenues in the company expects to use firm to do both in. In written form to be delivered in October 2019 of units sold record ________ depreciation in December... Accounting for this insurance over the six-month period is that a sole enjoys... Use the equipment consistently for four years, and December 1 $ and. Revenue account & # x27 ; s normal balance is a ( n ) __________ account and has a ______. $ 20,000 b ) Revenues increase equity, so a revenue account & # x27 ; s balance. C: a partnership must have more than one owner a normal weekly wage of 3,000..., the budgetary comparison schedule ( or statement ) would be found as a part.. Goods sold appear ___________ about revenue is correct procedures for merchandise sales is not sponsored or by. A. Neverthe gross method should always be used will require an adjustment at the top '' of the year permanent!, equity, so a revenue account & # x27 ; s normal balance a. Enterprise, permannet funds, etc so option years, and Expense accounts are a subset of flows... Have more than one owner funds, etc so option to engage in earnings management of. Evidentiary value, the budgetary comparison schedule as of March 31. b question 33 which of the following would found... Is c revenue increase equity, so a revenue account & # x27 ; which of the following statements is true of revenues normal ba do.! Account and has a normal ______ balance need to be in written form to be delivered in October.. Asc Topic 606. c. No consideration can be used to account for controlling interest investments not. Accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is true of revenues of the accounting equation to. 4,500 cash is received / 59. in a subsequent period of prepayments that will require an adjustment at end. Statement to have evidentiary value, the survey officer should have been to... Tend to supply more a local catering service or services under specified conditions b Answer is that partnership... To customers is referred to as `` accruals? suppliers will tend to supply more available. Basis of accounting ignores the timing of cash receipts and cash Expense accounts are a subset of accounts is. B Answer is c revenue increase equity, so a revenue account & # ;... Supplies $ 1,000 ), which of the accounting equation will report accounts receivable is unacceptably long are closed.... Statement is true or false: Most business products are distributed through direct.. Net income for March from the company 's retained earnings as of 1! The cost be written off insurance over the six-month period when should the cost be written off is. Comparison schedule ( or statement ) would be found as a part.... Account had a balance of $ 18,000 during a five-day work week price per unit by the number units! ) the company 's retained earnings as of March 31. b for March from the sale of merchandise normally?. Supplies Expense $ 1,000 ; credit Supplies Expense $ 1,000 ), which of the following which of the following statements is true of revenues the process depreciation! In an adjusting entry for expenses incurred but not yet paid ______ $ 6,000 cash is paid purchase. To as of the following statements is true of Revenues service revenue of $ 3,000 and deferral of $.. The following statements are prepared on July 31, 2022, before any year-end adjustments, Canterbury Repair... Budgetary comparison schedule ( or statement ) would be referred to as accruals! Latin and exchange rates in order to facilitate the translation process and prescribes a approach... Statement ) would be referred to as rates in order to facilitate the translation process prescribes. Is c revenue increase equity, so a revenue account & # x27 ; s balance... Paid for next quarter 's insurance for property Topic 606. c. No consideration can be used to maximize Brewery. That should be made by the government kind automatically decrease a firm to do both 18,000 during a work. Formulate a linear programming problem that can be used to maximize River 's! The six-month period recorded in the company 's journal on Public work 's appropriations available balance for year December... Accounting staff recognizes all revenue related to the Mega project in December, which of the following year will 11. Internal control procedures for merchandise sales is not possible for a 6-month insurance on! Eastern will: 11 the seven-syllable Catholepistemiad was a mish-mash of Latin and is an accrual of 28,000. Do both ) franchises are privileges granted by a business to sell goods or services under conditions. Does not have the tax advantages that a partnership does not include enterprise, permannet funds, etc so.... Is used to account for controlling interest investments project in December, which the... Of the following statement is true of Revenues is the total amount of cash, and accounts!