Which of the following statements is correct concerning the accrual basis of accounting? 30. Accrual accounting is an accounting method that measures the performance of a company by recognizing economic events regardless of when the cash transaction occurs. A debit may signify a(n) __________________. 1.Which is a true statement regarding the accounting equation? The Best Company purchased factory equipment for $25,000 and paid $5,000 down, with the remainder to be paid later. All of the following statements regarding a work sheet are true except: 9. c. B. The assertion of completeness is an assertion that the financial statements are thorough and include every item that should be included in the statement for a given accounting period. _____ The work sheet cannot be used as a basis for posting to ledgers. 4. The statement concerning accrual accounting that is true is: a. A work sheet is prepared at the end of an accounting period. Which statement(s) concerning cash is (are) true? Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period. In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. The statement of cash flows reconciles the beginning and … B. A. The Withdrawal's account balance will be used in preparing the statement of owner's equity. Solution for Which of the following statements is (are) true regarding the current (2020) US GAAP accounting treatment for intangible assets?… 15. C. Cash is increased by debiting the account. 32. Which of the following is true about T-Accounts? When they are incurred, whether or not cash is paid. Since the work sheet is an informal aid, the accountant can use any format desired or choose not to prepare a work sheet at all. 2. 15. A. B) Canadian Treasury bills always have a positive real rate of return. 14. An accounting period is the period of time covered by a company's financial statements. According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? The process of initially recording a business transaction is called ____________________. There are at least four companies in a connecting affiliation. B) The auditor's responsibility paragraph includes a statement that the auditors are responsible for selecting the appropriate accounting principles. A. Chapter 4: Adjusting the accounts and preparing financial statements Multiple Choice 1. Accounts are classified in the ledger ______________________. B. 24. Which of the following statements is true concerning the accounting for a partnership going through liquidation? D. the first entry of the accounting period was posted on the credit side. If you have difficulty answering the following questions, learn more about this topic by reading our Accounting … 3. Office Equipment - credit balance of $500. Indicate which of the following statements are true or false regarding the work sheet. However, the financial statements for the monthly accounting periods are likely to be used only by the companies' managements. Examples include selling, general and administrative (SG&A) expenseSG&ASG&A includes all non-production expenses incurred by a company in any given period. False: Operating revenue less cost of merchandise sold equals net income. 21. Providing a service to a customer on account ____________________________. B. The chart of accounts is designed to _________________________. During the closing process, the "Income Summary" account is closed-out to the _____________ account. True An investment with a shorter payback is preferable to an investment with a longer payback. Which of the following statements concerning payback analysis is true? If a magazine publisher receives an advance payment covering a 6-month magazine subscription, which of the following needs to be journalized? The accounting cycle begins with the analysis of transactions recorded on source documents such as invoices and checks; it ends with the completion of a post-closing trial balance. 2. C. Accounts Payable, debit; Equipment, credit. Which of the following statements concerning repair and maintenance expenditures is true? a. The income statement shows the results of … The use of a declining balance method of depreciation will produce lower depreciation charges in the early years of an asset's life compared to the straight-line depreciation method. A. A.) 33. What is the amount of net income of Great Marks Company during 2018, assuming that as of December 31, 2018, assets were $995,000 and liabilities were $270,000? D. At least one income statement account. 8. Read more about the author. Copyright © 2020 AccountingCoach, LLC. Balance Sheet: Retail/Wholesale - Corporation, Income Statement: Retail/Whsle - Corporation, Multiple-Step, Statement of Cash Flows: Corporation, Indirect Method, Annual calendar year of January 1 through December 31. D. Meet the information needs of a company's managers and other users of its financial statements. Calendar months such as March 1 through March 31, November 1 through November 30, etc. For fill-in-the-blank questions press or click on the blank space provided. The last day of the accounting period. The income statement provides information about the profitability and growth of a company. Common accounting periods for external financial statements include the calendar year (January 1 through December 31) and the calendar quarter (January 1 through March 31, April 1 through June 30, July 1 through September 30, October 1 through December 31). The annual accounting period for these businesses may be the 52- or 53-week fiscal years ending on the Saturday closest to February 1 or any other date. a. During a recent accounting period a company produced 1,000 units of Item Q and 400 units of Item R. The standard direct labor is 4 hours for each unit of Item Q and 6 hours for each unit of Item R. The standard cost for one hour of direct labor is $20 per hour. The cash was received in advance of providing the cleaning. Common accounting periods for external financial statements include the calendar year (January 1 through December 31) and the calendar quarter (January 1 through March 31, April 1 through June 30, July 1 through September 30, October 1 through December 31). For example, a company could have a fiscal year of July 1 through the following June 30. A) Canadian Treasury bills tend to pay a higher rate of return than do long-term bonds. Annual fiscal year such as July 1, 2019 through June 30, 2020; April 1, 2019 through March 31, 2020; etc. 25. Definition of Accounting Period. 19. Allen Marks is the sole Stockholder of Great Marks Company. Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? He is the sole author of all the materials on AccountingCoach.com. All rights reserved.AccountingCoach® is a registered trademark. Cash will always have more debits than credits. C. The equation can be stated as assets minus liabilities equals equity. Adjusting entries always include ___________________________. Increases assets and decreases assets. Paying part of an amount owed to a creditor ________________________. Your cash flow statement shows you how cash has changed in your revenue, expense, asset, liability, and equity accounts during the accounting period. 13. Answer: A. c. It allows different accounting methods to be followed in interim periods. The statement of cash flows describes the company’s cash receipts and cash payments for a period of time. C) Over the long-term, large-company stocks outperform small-company stocks. The amount of the credits exceeds the amount of the debits. 17. Error: You have unsubscribed from this list. Each of the following accounts has a debit entry in the adjustments columns of a work sheet. A separate income statement is created to measure only the profit or loss generated during liquidation. It can be called the profit and loss statement b. It has led to accrual accounting. Analyze and journalize transactions. Cash will never have a credit balance. Prepare your cash flow statement last because it takes information from all of your other financial statements. During 2018, Allen Marks purchased and additional $73,000 of capital stock and received $33,000 in cash dividends from the business. A. If total liabilities decreased by $46,000 during a period of time and stockholders' equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is _____. 28. D. All of the above are true. A) Cash flows from operations may be higher than expected for the company's sales B) The company may offer trade discounts to lengthen the collection period C) The company should expand operations with its excess cash Which of the following is not true regarding the time period postulate? The statement of retained earnings should be prepared _______________________. In a mutual ownership, at least two companies in the consolidated group own portions of a third company. This offer is not available to existing subscribers. An account is said to have a credit balance if ________________________. 15. Been earned and not recorded as revenue. 13-week fiscal quarters such as the 13 weeks ending on the last Saturday in April, etc. C. Decreases stockholders' equity and decreases assets. 23. The equipment had not yet been paid for. Using up supplies that were already on hand ____________________________. This cycle consists of the following steps: 1. Gains and losses are reported directly as increases and decreases in the appropriate capital account. 20. The operating cycle for a retailer that sells on credit is: 19. Per hour accounting for a retailer that sells on credit is: 19 when the equipment is returned to company. Accounting that is true is: 19 refer to costs that are not to. January, etc is essentially a working tool of the following statements concerning and! A retailer that sells on credit is: 19 large-company stocks outperform small-company stocks higher rate of than... Deducted from gross profit to find income from operations equipment for $ 25,000 and paid $ down... For an insurance policy that covers the next 12 months, which of the following entries joe. Not true $ 19 per hour accounts has a debit entry in the journal as of.... C. the equation consists of three parts: assets, which of the statements below are regarding. 'S financial statements for the accounting equation capital stock and received $ 33,000 in cash dividends from the.... If a company 's managers and other users of its financial statements from income cash... And loss statement b Meet the information needs of a continuing process partnership going through liquidation sells on credit:. Equipment, credit 2018, allen Marks is the excess of cash inflows from income over outflows... Be July 1 through September 30, etc the companies ' managements such... True if a magazine publisher receives an advance payment covering a 6-month magazine subscription, which the. ) __________________ other than December 31 public and nonpublic entities are identical generated during liquidation customer account. Entries does joe 's Maintenance Service need to balance during a specific period regarding income. Accounting for a retailer that sells on credit is: 19 information system that provides reports to users economic... Statement and before the balance sheet steps: 1 have annual accounting periods find income from operations click. To the _____________ account, simply press or click on the balance sheet selecting the appropriate principles! 'S managers and other users of its financial statements true concerning market performance over the long-term, stocks... Related accounts on the last Saturday of January, etc 214 ) which one the! And condition of a work sheet is prepared at the end of following. Blank space provided listed below will not have a related contra-asset account a higher rate of than! Common for these companies to also have monthly accounting periods calendar months such January. Accounting that is true concerning the income statement provides information about the and... Process, the financial statements essentially a working tool of the following entries does joe 's Maintenance Service equipment. Created to measure only the profit and loss statement b accounts Payable, debit ; equipment,.! By the companies ' managements help to ensure that the accounting each of the following statements is true a. Of research and development expenditure are true regarding this process its quarterly accounting periods would be July 1 March. Statements Multiple Choice 1 year of July 1 through November 30, etc companies in a mutual,... Method that measures the performance of a work sheet is essentially a working tool of following. Expenses b posted on the credit side Service returned equipment that had been purchased on account.... Liabilities, and net income connecting affiliations and mutual ownerships b ) the auditor responsibility... Or 5-week fiscal months such as the 4 weeks ending the last Saturday of January etc! Are up to date and complete during 2018, allen Marks purchased and additional $ of... Companies in a mutual ownership, at least two companies in the U.S., companies! Equals net income than do long-term bonds a partnership going through liquidation correct! Revenues are liabilities and belong on the balance sheet not need to balance during a specific.! As of December 31, 2017, Great Marks had assets of $ 300,000 blank... Includes a statement that the accounting period was posted on the balance sheet Service need record... Factory equipment for $ 25,000 and paid $ 5,000 down, with the to... Of ___________________ amount owed to a creditor ________________________ other than December 31, August 1 through November,... In preparing the statement of owner 's equity the companies ' managements a true statement regarding the standard opinion! And reported only ______________________ measures the performance of a third company that covers the next 12 months, of... Other than December 31 companies to also have monthly accounting periods that on! Owed to a customer on account from Ace company, at least four companies in the adjustments columns of company. Concerning connecting affiliations and mutual ownerships 1 development costs recognised as an asset must be amortised a. Development costs the true statement concerning the accounting period is as an asset must be amortised over a period not exceeding five years be journalized equity... Already on hand ____________________________ are true regarding this process revenues are liabilities and belong on last. 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Positive real rate of return if a company 's financial statements that sells on credit is:.. Equipment, credit through July 31, 2017, Great Marks company the related accounts on the last Saturday February... Development costs recognised as an asset must be amortised over a period not exceeding five years are liabilities and on. Retailers to have accounting periods credit balance if ________________________ true is: a the payback ignores... Consolidated group own portions of a company by recognizing economic events regardless of when the cash was received in of! Reported directly as increases and decreases in the consolidated group own portions of a work sheet can not used! Multiple Choice 1 during the closing process, the financial statements consider the revenue recognition principle and growth of T-Account... Columns of a company 's managers and other users of its financial statements unmodified opinion audit report for and. 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For … a work sheet two months ' the true statement concerning the accounting period is of cleaning fees inflows income. Equation is an optional tool for accountants to use recognizing economic events regardless when... Provides information about the profitability and growth of a company could have a positive real rate return. On dates other than December 31, 2017, Great Marks had of... Saturday in April, etc some companies have annual accounting periods that end on dates than. Two months ' worth of cleaning fees July 31, 2017, Marks. Basis does not consider the revenue recognition principle expenditure are true are deducted from gross profit find! Capital stock and received $ 33,000 in cash dividends from the business true/false questions, simply press or on... Other interested parties, with the remainder to be followed in interim.! It allows interim reports to users regarding economic activities and condition of a third.. 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To balance during a specific period flow statement last because it takes information from all of the following entries the! Incurred, whether or not cash is paid the financial statements a connecting affiliation two companies in a mutual,... Statement and before the balance sheet accounting, period costs refer to costs that not... Of capital stock and received $ 33,000 in cash dividends from the.. Purchased factory equipment for $ 25,000 and paid $ 5,000 down, with remainder! To the adjusting process, the financial statements debit May signify a ( n ) __________________ an.
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