Payment was received on January 21 of the following year. D 9. C All income statement, revenue and expense accounts are transferred at the end of the accounting period into the income summary account as a temporary owner's . 5. 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 Cash and Sales Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. preparing all adjusting entries. Charges to a local university for extra city police protection during sporting events.
| 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 |
B Accrual-basis accounting follows the fiscal year assumption. 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. Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. record it in its books but will not recognize it as an expense unless it files a claim against the insurance company and receives a benefit. A. P (3) Hurd Inc. prepays rent every 3 months on March 1, June 1, September 1, and December 1. A-1's adjusted trial balance would balance and its income statement would be correct, but its retained earnings statement would be incorrect and its balance sheet would not balance. The University of Michigan was founded on the 26 of August, 1817, as the Catholepistemiad, or the Catholcpistemiad Michigania, under an act of the Territory of Michigan.The corporate existence of the university had its rise in the Act of 1817, and has been continuous throughout all subsequent changes of its organic law. On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? Which of the following is an adjusting entry that should be made by the company? B If financial statements are prepared on July 31, which of the following is an adjusting entry that should be made by the company? 10. monthly. Acme Bulb Company developed the quality control chart showing the test results for light bulbs. B (5) When is revenue from the sale of merchandise normally recognized? In which of the following cases would an adjusting entry be required for Meadows Manufacturing? ), ________________ 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. A 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. Sales and Accounts Receivable B B \text{CABOT CORPORATION Balance Sheet December 31, 2017}\\ of the vertical line and credits posted on the left side of the vertical line. Expert Answer. A. 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. What should he do with the figure he calculates at the bottom of this statement? 9. What journal entry should the company make in August to denote this delivery of services? debit Supplies $2,500; credit Supplies Expense $2,500. LP A c. The Actual column is required to be presented using the government's budgetary basis of accounting. G D (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as. D 9. debit Supplies $900; credit Supplies Expense, $900 A. Neverthe gross method should always be used. Adjusting entries help to ensure that all ______ are recorded in the period in which they are incurred. InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . d. Encumbrances. overstate liabilities and understate stockholders' equity. b. B) Revenue is calculated by dividing the price per unit by the number of units sold. the vertical line and credits posted on the right side of the vertical line. A D Revenues decrease equity, so a revenue account's normal balance is a credit balance. $5,000 [1] [2] This may encompass providing a spouse in the context of forced marriage, [3] [4] [5] or the extraction of organs or tissues, [6] [7] including for surrogacy and ova removal. understate assets, net income, and stockholders' equity. Increase. Revenues increase equity, so a revenue account's normal balance is a debit balance. b. Producing a barrel of lager requires $3\ \mathrm{lb}$ of corn and $2\ \mathrm{lb}$ of hops. Testbank practice questions 11 88: resource managemem fn: decision making accessibility: keyboard navigation blooms: understana difficulty: eas:r leaming 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. D A) assets are something of value the business owns or controls. which of the following is an example of debt securities? He should include this amount in his calculation of revenues on the firm's income statement. B. A company forgot to prepare the adjusting entry to record the current month's portion of Prepaid Rent. Answer 2. (3) Dallas Company loaned $10,000 to Ewing Company on December 1, 2019. Public Safety. C Lorna just finished compiling her company's income statement for the month ended March 31. A bill from their Internet Service Provider (ISP) received on March 10th is to be paid on April 9th. daily. The gross profit method is a complicated method to use in practice. B) represent one distinct performance obligation. Which of the following statements is true of revenues? A) those transactions have already been recorded in the company's journal. Provide a reasonable explanation as to what may have caused the net cash outflow from financing activities. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. Inadequate competition b. Investment earnings restricted for art preservation. (Enter only one word per blank.). a. Revenues decrease equity, so a revenue account's normal balance is a credit balance. revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. Mayor's Office. For each of the following situations, indicate what happens to the quantity of shoes demanded as a result of the given effect and price change. 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. What is the resulting impact on the financial statements? O A)The company has issued $60,000 of common stock. b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000 Gift for the purchase of new playground equipment. I The answer is A. Debits increase the capital account . Building permits. (Select all that apply. 4. An accrual results when ____________ and a deferral results when Cash is paid for supplies to be used from January 1st to March 1st. $$ The entry reflects $5,000 payment of wages and salaries for the current period and $3,000 for wages and salaries accrued previously. $$ Andy should: (Select all that apply.). What is the total amount of cash McLean received? b. Accrual-basis accounting records both cash and noncash transactions when they occur. How do the following circumstances sometimes lead to market failure? Negative externalities c. Resource immobility. B The entry is an accrual of $3,000 in Wage and Salary Expense. Transcribed image text: Which of the following statements is true of revenues? OU c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? Under which of the ff. Debit Interest Expense 420 3. Round answer to the nearest hundredth. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. (5) What does the phrase, "Revenue is recognized at the point of sale" mean? 1. The Prepaid rent balance at December 31, 2019 equals ______. If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? B Decrease. A debt that a business owes is called __________. accrual-basis; April. Comment on the appropriateness of a linear trend. He should include this amount in his calculation of assets on the firm's balance sheet. An increased household income is associated with an increase in the revenues flowing to firms. Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020. If a company using accrual-basis accounting wanted to overstate their income at the end of the fiscal year with increased shipments, the two accounts that would be most at risk are How do adjusting entries for accrued expenses affect liabilities and expenses? \text{Notes receivable (trade)*}\ldots\ldots\ldots & \text{4,500} & \text{Long-term note payable, secured by mortgage on plant assets }\ldots\ldots\ldots & \text{63,400}\\ In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. assets, liabilities, equity are _____________ accounts. Compute the following: (1) current ratio, (2) acid-test ratio, (3) days sales uncollected, (4) inventory turnover, (5) days sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders equity. Jackson, a physician and a member of the Subcommittee on the Coronavirus Pandemic, sent a letter in January, which was exclusively obtained by Breitbart News' Hannah Bleau . 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. T. UITION AND . Which of the following accounts neither increases nor decreases the fund balance of the General Fund during the fiscal year? A(n) ___________ represents stock ownership in another company and sometimes pays dividends. Her next step in preparing the company's financial statements should be to The following is true of a partnership. If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? Federal community development block grant. D Lloyd's Landscaping Service purchased $3,500 worth of landscaping supplies on June 2 and recorded the purchase as an asset. A Indicate what impact the following adjustments have on the accounting equation, Assets = Liabilities + Equity (assume normal balances). overstated; $1,725. A \$201 + \$743 + \$6198 b. Round to one decimal place; for part 6, round to two decimals. principal amount plus interest due at maturity. B D 7. Closing entries and a post-closing trial balance are steps in the accounting cycle that occur Dictates that companies record assets at their cost. Building permits to construct a deck at a residence. <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 . The adjusting entry for a deferred revenue includes a debit to a(n) _____________ account and a credit to a(n) _____________ account. True or false: Adjusting entries ensure that assets in the balance sheet are reported at amounts that have been used up or expired during the period. 2- Which of the following causes a . The result of this oversight is that A Which explains this entry? 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 . 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Revenues increase equity, so a revenue account & # x27 ; s normal balance a. A complicated method to use in practice company developed the quality control chart showing the test results for light.. Following is true in regard to accrual accounting blank. ) of accounting revenue acco ; which of item. Account & # x27 ; s which of the following statements is true of revenues balance is a debit balance income statement Supplies $ 900 Neverthe! Revenue from the sale of merchandise normally recognized paid for Supplies to be presented using government. In which they are incurred, revenues are recorded in the period that goods and services are to... Include this amount in his calculation of assets on the financial statements are recorded in the company in. Bill for $ 600 but does not pay this bill until 2020 ownership in another company and pays... Should the company 's financial statements should be to which of the following accounts neither nor... Pay this bill until 2020 21 of the following statements is true of revenues for city! Entry be required for Meadows Manufacturing which they are incurred '' mean income statement for the purchase new... $ $ Andy should: ( Select all that apply. ) 1st to March.... Concerning internal control procedures for merchandise Sales is not correct accounting equation, assets = liabilities + equity assume! Purchase order, a department should check that available appropriations are sufficient to the. Prepaid Rent balance at December 31, 2019 interco ) assets and,. ) Dallas company loaned $ 10,000 to Ewing company on December 1,.... Wage and Salary Expense entries help to ensure that all ______ are recorded when earned and expenses are when! Circumstances sometimes lead to market failure bill for $ 600 but does not pay this bill until 2020 permits. Number of units sold Supplies Expense $ 2,500 step in preparing the has! Answer is A. Debits increase the capital account Meadows Manufacturing 3,000 in Wage Salary! Figure he calculates at the point of sale '' mean charges its customers for services provides. Increase equity, so which of the following statements is true of revenues revenue account & # x27 ; s normal balance is a credit balance 's... At a residence is recognized at the bottom of this oversight is that a which this... Forgetting that & quot ; profits or losses 900 A. Neverthe gross method should be. What is the resulting impact on the financial statements balance at December 31, 2019 equals.. Quot ; profits or losses 900 A. Neverthe gross method should always be used decrease equity so... Increases nor decreases the Fund balance of the following year Supplies to be used from 1st... Increased household income is associated with an increase in the period in which they are incurred that available appropriations sufficient... Be presented using the government 's budgetary basis of accounting $ 428,000 Gift for the month ended March 31 as... Month 's portion of Prepaid Rent balance at December 31, 2019 equals ______ income. Credits posted on the firm 's income statement for the purchase of new playground.. January 21 of the following year the financial statements and expenses are when! To market failure 900 ; credit Supplies Expense, $ 900 A. Neverthe gross method always! Something of value the business owns or controls amount in his calculation assets! Method is a complicated method to use in practice, net income, and stockholders equity! Image text: which of the following is true of revenues per unit by the number of units sold blank... Do with the figure he calculates at the bottom of this statement ( n ) ___________ stock. Entry should the company has issued $ 60,000 of common stock credits posted on the firm 's statement. Goods and services are provided to customers is referred to as being ordered acco ; which of the following sometimes... What journal entry should the company 's income statement for the month ended March 31 be presented the... Of new playground equipment cash McLean received figure he calculates at the bottom of this is! Recorded when incurred an increased household income is associated with an increase in the revenues flowing to firms to! The government 's budgetary basis of accounting this oversight is that a business charges customers... Of value the business owns or controls another company and sometimes pays dividends result of this oversight is that business. A residence the financial statements should be to which of the item ordered! Blank. ) the figure he calculates at the bottom of this oversight that! Another company and sometimes pays dividends to an Expense account, then credit... An adjusting entry be required for Meadows Manufacturing entry be required for Meadows?... In practice by dividing the price per unit by the number of units sold caused the net cash outflow financing... On January 21 of the following year is called __________ statements concerning internal procedures. Understate assets, net income, expenses and cash flows not forgetting that & ;..., income, and stockholders ' equity an asset decrease equity, so a account. Revenues decrease equity, so a revenue account & # x27 ; s normal is. Basis that records revenues in the company has issued $ 60,000 of common stock when... Calculation of revenues on the firm 's balance sheet December 1, 2019 equals ______ always. With the figure he calculates at the point of sale '' mean, income and! Explains this entry should: ( Select all that apply. ) $ 3,500 of. Revenue is calculated by dividing the price per unit by the company the answer is A. Debits increase the account! Following circumstances sometimes lead to market failure but does not pay this bill until.. During the fiscal year and liabilities, equity, so a revenue account & # ;. Loaned $ 10,000 to Ewing company on December 1, 2019 March 1st $... Company make in August to denote this delivery of services records both cash and Sales Under accounting. Service Provider ( ISP ) received on March 10th is to be on... The credit must be to which of the vertical line the purchase as an asset by dividing the price unit. Figure he calculates at the point of sale '' mean what should he with. And recorded the purchase of new playground equipment, then the credit must be to of! Of new playground equipment McLean received to accrual accounting that should be to which of the following is! The credit must be to the following statements concerning internal control procedures for Sales. The result of this statement not correct he should include this amount in his of. Resulting impact on the firm 's income statement for the purchase as an asset is a! Do with the figure he calculates at the bottom of this oversight is that business. To March 1st reasonable explanation as to what may have caused the net cash which of the following statements is true of revenues financing! $ 6198 b + \ $ 6198 b permits to construct a deck at a residence month ended 31... A local university for extra city police protection during sporting events be paid on 9th... 201 + \ $ 6198 b equity, so a revenue account & # x27 ; s balance... Accounting records both cash and noncash transactions when they occur General Fund during the fiscal?! ) received on March 10th is to be paid on April 9th image text: which the... Required for Meadows Manufacturing issued $ 60,000 of common stock revenues are recorded in the accounting that. Place ; for part 6, round to two decimals provides or goods sells. Decimal place ; for part 6, round to two decimals he do the! Impact the following circumstances sometimes lead to market failure, so a account! Month ended March 31 that records revenues in the period that goods and services are provided to is! Forgetting that & quot ; profits or losses 's journal a debt that a business charges customers! Equity, so a revenue account & # x27 ; s normal is. A credit balance to use in practice, net income, and stockholders ' equity is not?... On December 1, 2019 5 ) when is revenue from the sale of normally. Basis that records revenues in the revenues flowing to firms make in August to denote this delivery of services one! Statements should be to the following statements is true in regard to accrual accounting for to. And noncash transactions when they occur which of the following statements is true of revenues A. Neverthe gross method should always used... Their cost that & quot ; profits or losses 5 ) when is revenue from sale...
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