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. Which of the following is not true about closing entries? Is an information system that provides reports to users regarding economic activities and condition of a business. A. Receiving payment from a customer on account ___________________________. Calendar quarters such as January 1 through March 31, April 1 through June 30, etc. 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. 33. The chart of accounts is designed to _________________________. 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. Decreases assets and decreases liabilities. Which of the following statements regarding adjusting entries is not true? 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. This offer is not available to existing subscribers. Indicate which of the following statements are true or false regarding the work sheet. True 23. However, the financial statements for the monthly accounting periods are likely to be used only by the companies' managements. D. the first entry of the accounting period was posted on the credit side. For example, a company could have a fiscal year of July 1 through the following June 30. 17. A. If a law firm has provided legal services to clients and the legal services have not been recorded, which of the following needs to be journalized? It is common for these companies to also have monthly accounting periods. Office Equipment - credit balance of $500. Answer: A. Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? Which of the following statements concerning repair and maintenance expenditures is true? Which of the following is true about T-Accounts? B. If a utility bill for the current month is received, but is not due until next month, which of the following needs to be journalized? The income statement shows the results of … A. b. Which of the following statements concerning the income statement is not true? C. An equality between the total of the debit balances and the total of the credit balances provides proof that there have been no s in the accounting system Most companies prepare a trial balance only once during the accounting period The accounting records may contain errors even if the total amount of debt and credit balances are equal The accounting records may be error free even if the total amount of debit … 9. The equation is an optional tool for accountants to use. The Withdrawal's account balance will be used in preparing the statement of owner's equity. Which of the following statements concerning payback analysis is true? Using accrual accounting, expenses are recorded and reported only ______________________. Accounting Cornerstones of Financial Accounting Which of the following statements regarding the income statement is true? In the U.S., some companies have annual accounting periods that end on dates other than December 31. 30. 25. When they are incurred, whether or not cash is paid. Joe's Maintenance Service returned equipment that had been purchased on account from Ace Company. It is also common for U.S. retailers to have accounting periods that end on a Saturday. 28. Accounts are classified in the ledger ______________________. Read more about the author. 16. B. Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period. If a magazine publisher receives an advance payment covering a 6-month magazine subscription, which of the following needs to be journalized? He is the sole author of all the materials on A. 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? 22. C. All real (permanent) accounts are closed at the end of the period. The retailers' quarterly accounting periods will be the 13-week periods, and the monthly accounting periods will be a 4- or 5-week time period. A. A. C. Examples include selling, general and administrative (SG&A) expenseSG&ASG&A includes all non-production expenses incurred by a company in any given period. _____ The work sheet is essentially a working tool of the accounting. 15. A separate income statement is created to measure only the profit or loss generated during liquidation. 12. a. An accounting period is the period of time covered by a company's financial statements. Providing a service to a customer on account ____________________________. D. All of the above are true. 22. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. 15. B. C. Cash is increased by debiting the account. An accounting period is a period of time that covers certain accounting functions, which can be either a calendar or fiscal year, but also a week, month, or quarter, etc. Using up supplies that were already on hand ____________________________. 6. Each of the following accounts has a debit entry in the adjustments columns of a work sheet. Been earned and not recorded as revenue. As of December 31, 2017, Great Marks had assets of $940,000 and liabilities of $300,000. Unearned revenues are liabilities and belong on the balance sheet. A work sheet does not substitute for financial statements. 19. C. The equation can be stated as assets minus liabilities equals equity. 2. 1 Development costs recognised as an asset must be amortised over a period not exceeding five years. The equipment had not yet been paid for. You are already subscribed. The correct entry would be: 11. All of the following statements regarding income statement columns on the worksheet are true except: b) the balances in the income statement credit column are unearned revenues. D. Increases assets and increases stockholders' equity. Question: 1. _____ The work sheet is distributed to management and other interested parties. Prepare your cash flow statement last because it takes information from all of your other financial statements. Chapter 4: Adjusting the accounts and preparing financial statements Multiple Choice 1. Allen Marks is the sole Stockholder of Great Marks Company. a. Paying part of an amount owed to a creditor ________________________. Which of the following entries does Joe's Maintenance Service need to record when the equipment is returned to Ace Company? The actual direct labor for the accounting period was 6,500 hours at $19 per hour. According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? 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 amount of the credits exceeds the amount of the debits. On occasion, it may also include depreciation expense, marketing expenses, CEO salary, and … A debit may signify a(n) __________________. The statement of cash flows describes the company’s cash receipts and cash payments for a period of time. The equation consists of three parts: assets, liabilities, and net income. Analyze and journalize transactions. 2. 52- or 53-week fiscal year such as the 52 or 53 weeks ending on the last Saturday of January, etc. In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. 13. Increases assets and decreases assets. A work sheet is prepared at the end of an accounting period. It can be called the profit and loss statement b. B. D. The equation does not need to balance during a specific period. Which of the following statements is true concerning the work sheet? Which of the following statements is true concerning connecting affiliations and mutual ownerships? 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 B. A) Canadian Treasury bills tend to pay a higher rate of return than do long-term bonds. The accounting cycle includes only one optional step. If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry? Which of the following balances is always due to an error? There are at least four companies in a connecting affiliation. If a company pays for an insurance policy that covers the next 12 months, which of the following needs to be journalized? 29. Fiscal quarters such as May 1 through July 31, August 1 through October 31, etc. C) Over the long-term, large-company stocks outperform small-company stocks. The accounting principle upon which accruals and deferrals are based is ____________________. Which Of The Following Statements About Period Costs Is True? A) The format of the audit report for public and nonpublic entities are identical. 20. _____ The work sheet cannot be used as a basis for posting to ledgers. The statement concerning accrual accounting that is true is: a. B. In a mutual ownership, at least two companies in the consolidated group own portions of a third company. B) The auditor's responsibility paragraph includes a statement that the auditors are responsible for selecting the appropriate accounting principles. The last day of the accounting period. 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 _____. The Best Company purchased factory equipment for $25,000 and paid $5,000 down, with the remainder to be paid later. 15. 26. Its quarterly accounting periods would be July 1 through September 30, etc. 38) Which of the following statements is true concerning the acquisition of existing debt of a consolidated affiliate in the year of the debt acquisition?
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