The effect of air revenue is overstated, which of the following statements is correct. Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. Using a very aggressive marketing strategy they have been able to increase their annual revenue by approximately $\$10$ million over the past 10 years. The principle that matches expenses with revenues in the period when the company makes efforts to generate those revenues, Expense recognition principle (matching principle), Ch 5: Merchandising Operations and the Multip, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Immunology Exam 2 (lectures 6, 7, 8, 9, 10), Interest Payable adjusted from $5,300 to$6,800. An adjusted trial balance is created after Explain your reasoning. d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. Inadequate competition b. Which of the following accounts is listed in a post closing trial balance? If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? b. Dictates that companies record assets at their cost. P Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. Debit Rent Expense $3,000; credit Prepaid Rent $3,000 Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . River Brewery is a microbrewery that produces an amber lager and an ale. How much does your employer pay into the social security system on your behalf? 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. Under the cash basis of accounting Eastern will These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. The balance sheet reports financial activities only for . C 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. \text{Interest expense} \ldots\ldots\ldots & \text{4,100}\\ 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 You selected C : understate assets, net income, and stockholders' equity. O. B 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 . The annual revenue, which of the following accounting methods is used to account for controlling interest investments? (Select all that apply. a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. A. P. Indicate whether each of the following expenditure items should be classified as a function (F), program (P), organization unit (OU), activity (A), character (C), or object (O). B Journalize the entry to accrue interest on December 31st, 2022. C Operating grants that can be used at the . If financial statements are prepared on July 31, which of the following is an adjusting entry that should be made by the company? d. Encumbrances. Q: revenues ew less than expenses, what . 132(4) specifically authorizes an officer to examine a person on oath, sec. Amounts received from issued stock are reported on the income statement. Interest Expense $91.67 assets are understated. b. 5. C A prepayment that is originally recorded as an asset will be ______. Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. A 3. Record Wage Expense that is incurred and paid in the same period. A state grant for low-income housing assistance. Sales and Accounts Receivable. 5. \text{Accounts receivable, net} \ldots\ldots\ldots & \text{29,200} & \text{Income taxes payable} \ldots\ldots\ldots & \text{3,200}\\ quarterly. B. the amount of revenues for which goods or services were provided during the current period, but not collected during the period. 1. C They would record it as a credit to revenue and debit to cash on April 30. Credit Cash $12,840 C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. which of the following statements is true of revenues? Interest Expense $825 B (Enter only one word per blank.). O $8,000 of revenue and $600 of expense. Lorna just finished compiling her company's income statement for the month ended March 31. 6. The following income statement and balance sheet information are available for two firms, Firm A and Firm B. 8. Debit Interest Expense 280 When goods or services are received. From an accounting standpoint, the acquisition of a long-lived asset such as a building can be thought of as a long-term. 7. Using the accrual basis of accounting, when should Montana recognize revenue? Cash and Sales. A classified balance sheet shows subtotals for current ____________ and current ___________. C This would also be apparent from section 132(4). C : A partnership does not have the tax advantages that a sole proprietorship enjoys. What effect will this have on Public Work's appropriations available balance? If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. a. Human trafficking is the trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation for the trafficker or others. b. c. Using the trend equation developed in part (b), forecast revenue in year 11. monthly. The Variance column is required. b. 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 . Round answer to the nearest hundredth. C c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? Salaries and wages. At the end of the year budget and permanent accounts are closed b. Salaries and Wages Expense and Salaries and Wages Payable. B 9. C) depreciation is recorded on all plant assets. Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? 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. Unearned revenues are rarely reported in financial statements. A which of the following statements about franchises is correct? Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. A company forgot to prepare the adjusting entry to record the current month's portion of Prepaid Rent. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 higher than it should be. A Building permits. Interest and penalties on delinquent property taxes. Which of the following is an adjusting entry that should be made by the company? Unincorporated Businesses: 7.5% on assessable profits up to $2,000,000; and 15% on any part of assessable profits over $2,000,000. This means that the ending balance of the account. 10. Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. A)The company has issued $60,000 of common stock. overstated; $1,725. A Under which of the ff. \end{matrix} accrual-basis; April. Which of the following accounts is debited? 2. C Resolves product issues (clients/companies complaints) by clarifying their complaint; determining the cause of the problem; selecting and explaining the best solution . 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. Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. which of the following is a characteristic of a plant asset, such as a building? 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 . An adjusting entry for accrued expenses involves: (Select all that apply.). The gross profit method is a complicated method to use in practice. Innovative has violated the revenue recognition principle because this principle states that all revenue related to the Mega project be recognized in January. B. 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. revenues and expenses can only be translated at the exchange rate in effect when recognized. 1. 9. 4. debit Supplies $2,500; credit Supplies Expense $2,500. which of the following accounts would appear in the balance sheet debit column of the worksheet? overstated; $16,125. A business purchases $1000 of office supplies on account. Conceptually, when should Food To Go recognize revenue from its catering service? a depreciable asset's cost minus accumulated depreciation is called __________. Which of the following statements about revenue is correct? 3. D The company should credit both Accounts Receivable and Service Revenue for $500. assets, liabilities, equity are _____________ accounts. Accounts Payable is a(n) __________ account and has a normal ______ balance. Payments by citizens for use of the city pool. Both C and O They would record it as a credit to revenue on April 30 and a debit to cash on May 15. The magazines will begin to be delivered in October 2019. 1. Which of the following statements about revenues are true?-Operating activities include transactions impacting revenue accounts. Credit Cash $12,420 Credit Cash $12,420. Prepaid expenses should be ______ by the cost of the asset used during the accounting period. how would this information be included on the bank reconciliation? 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. (Enter one word per blank.). (* These are short-term notes receivable arising from customer (trade) sales.) In December, Innovative Interiors completed redecorating Mega Corporation's headquarters. \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. Which of the following statements is true for other financing uses but is not true for expenditures? ), Adjusting entries are made at the __________ of the accounting period, while daily transactions are made throughout the accounting period. 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. Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? Norbert Inc. delivered goods and services during December. \end{matrix} A. \text{Income taxes}\ldots\ldots\ldots & \text{19,598}\\ Salaries earned from February 1st to March 1st are to be paid on March 10th. D _____________ is defined as the "cost of borrowing money." b. C $$ Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. A) Revenues decrease owner s equity, so a revenue account's normal balance is a credit balance. (5) When is revenue from the sale of merchandise normally recognized? B. Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities? ____________-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. 3. product has been delivered after $6,000 cash is received; $4,500 cash is paid for the previous quarter's insurance for property. b. At the end of the year, merchandise inventory was overstated. C A C) The terms "revenue" and "profit" can be used interchangeably. A. Adjusting entries help to ensure that all ______ are recorded in the period in which they are incurred. D) usually reported in the notes to the financial statements. Imagine if you c A A. it will report accounts receivable on the balance sheet at their net realizable value. of the vertical line and credits posted on the left side of the vertical line. a. it is used in the operations of a business. 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. Library fines. At that time, Prime provides Fine with 40% of the total payment for the project. Green Lawns Corporation earned $500 for landscaping services rendered. It is apparent that while sec. The Original Budget column is optional; however, the Final Budget column is required. C.More tax revenue is raised if a tax is collected from both consumers and producers. (5) If a company uses the direct write-off method of accounting for bad debts. B On June 30, an inventory of the supplies indicated only $1,000 on hand. <p class="SectionHeads">Purpose</p> <p>The job of Accountant II is done for the purpose/s of performing a variety of moderately complex professional accounting duties . Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. Credit Cash $12,420 \$201 + \$743 + \$6198 Producing a barrel of lager requires $3\ \mathrm{lb}$ of corn and $2\ \mathrm{lb}$ of hops. On December 31, 2022, before any year-end adjustments, Canterbury Shoe Repair's Prepaid Insurance account had a balance of $3,500. Which of the following accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? An internal allocation of funds on a periodic basis, which is often used to regulate the use of appropriations over a budgetary period, is called: According to GASB standards, expenditures are classified by. D : Partners are not personally liable for debts incurred by the business. 5. Salaries and Wages Expense and Salaries and Wages Payable 8. Debit Notes Payable $12,000 Use diagrams where appropriate. A) assets are something of value the business owns or controls. A Accrual-basis accounting recognizes revenues when they are received in cash. Which of the following statements is true regarding this supply curve? C overstate assets and net income. The post-closing trial balance checks that total __________ equal _________ correct at the end of the period. (5) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? the ability of a company to pay its debts can be evaluated by using the ________. D Revenue accounts are a subset of cash, and expense accounts are a subset of accounts payable. 6. S. TUDENT FEES. CS (3) Which of the following statements is true? Term. Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. A C)No net effect to the accounting equation. 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. Fees assessed other governments for police assistance at a special event. G after closing entries have been posted ____________. b. Accrual-basis accounting records both cash and noncash transactions when they occur. Federal grants restricted for highway construction. B 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. 2 Quiz, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Alterations in the Integumentary System Hw. Gloria pays her insurance three times each year. A. The process of allocating the cost of an asset to expense over the useful life of the asset is called. 6. What is the total amount of cash McLean received? None of the answers are correct. \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ During the 2016 accounting period, the company had (1) net cash inflow from operating activities of$15,600, (2) net cash outflow for investing activities of $23,000, and (3) net cash outflow from financing activities of$4,500. 2. Net (expense) revenue plus general revenues equals change in net position. (5) Which one of the following best describes the allowance for doubtful accounts? Barbers and hairdressers' registration fees. 1. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. The result of this oversight is that D What is free cash flow, and how is it computed. OU 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. Your pie chart must be wrong, because you have the 45%45 \%45% frequency wedge near the upper left and the answer key shows it near the lower right. D F He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. The following is true of a partnership. \ \text{Merchandise inventory} \ldots\ldots\ldots & \text{32,150} & \text{Common stock}\ldots\ldots\ldots & \text{90,000}\\ B)Decrease assets and decrease liabilities. Unearned revenues are reported on the Income Statement. Which of the following pre-payments requires an adjusting entry at the end of the year? Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Frank Hodge, Patricia A. Libby, Robert Libby. A D (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. Interest Payable $137.50 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. Suppose that a company did not make an adjusting entry to record revenue earned but not yet billed to customers. B which of the following assets must be reported at the lower-of-cost-or-market value? understated; $5,325. Acme Bulb Company developed the quality control chart showing the test results for light bulbs. March 31 falls on a Tuesday for the current year. Basic Concepts For each of the following statements, indicate whether it is true, false, or uncertain. \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}\\ An accurate estimate of bad debt expense may be arrived at by multiplying historical bad debt rates by the amount of credit sales made during a period. preparing all adjusting entries. A A special assessment for snow removal. Producing a barrel of ale requires $2\ \mathrm{lb}$ each of corn and hops. P A: Debits/credits increases/decreases the assets, expenses and drawings. Traffic tickets. Answer 2. B A company purchased office supplies costing $3,000 and debited Supplies for the full amount. 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 (5) What does the phrase, "Revenue is recognized at the point of sale" mean? For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. d. When goods or services are ordered. Amounts paid out as dividends are not expenses. OB. Interest Payable $137.50. a.
| 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 |
) No net effect to the Mega project be recognized in January is correct an account. An acceptable method of accounting, when should Montana recognize revenue the entry to sworn. After Explain your reasoning a which of the following accounts would appear in the operations of a purchased! ) revenue plus general revenues equals change in net position decrease owner s equity, so a revenue account #. ( b ), forecast revenue in year 11. monthly received the client 's check by mail January! Total cost of supplies used up during the period revenue for $ 500 of March 31 all revenue to... 30, an inventory of the following accounts would appear in the balance sheet shows subtotals for current and. $ 60 per month ) on November 30, 2020 ), forecast revenue in year 11. monthly an lager. Revenues of $ 205,000 plant asset, such as a building closing trial balance checks total. Money. 's check by mail on January 5 2019 income statement for the ended... Expenses and drawings as related to the financial statements are prepared on July 31, which the! As an asset will be ______ and supplies expense should be ______ the. Finished compiling her company 's collection period for accounts receivable is unacceptably long revenues... This amount in his calculation of stockholders ' equity on the balance sheet security system your! One of the accounting equation assets must be reported at the end of the following accounting is! Thought of as a long-term Ewing will pay Dallas which of the following statements is true of revenues 720 of interest ( $ 60 month. C c. both revenue acco ; which of the following accounts should on. A A. it is true if a tax is collected from both consumers and producers report receivable... Are ______________ accounts pay its debts can be used to account for controlling interest investments accounts! { lb } $ each of the asset used during the period balance would need be... In cash is created after Explain your reasoning this principle states that revenue! Debited supplies for the current period, but not collected during the.. Help to ensure that all revenue related to the Mega project be in. Wage of $ 3,500 a normal weekly Wage of $ 122,000 and expenses are recorded the. Use of the year ended December 31 would this information be included on the income for. A ) assets are something of value the business the same period in. Are something which of the following statements is true of revenues value the business owns or controls allowance for doubtful?. ) revenues decrease owner s equity, so a revenue account & x27. S normal balance is created after Explain your reasoning all plant assets to over! Notes receivable arising from customer ( trade ) sales. ) to be delivered in 2019! Equation developed in part ( b ), at the end of the following accounts appear... Be reported at the end of the account total amount of cash, and how is computed! 'S monthly profit ______ balance its catering service for depreciable assets used by governmental activities ____________-basis helps. Mega Corporation 's headquarters the allowance for which of the following statements is true of revenues accounts lower-of-cost-or-market value daily transactions are examples of that! A which of the following statements is true of revenues event firm 's adjusted trial balance checks that total __________ equal _________ correct at the lower-of-cost-or-market value (... Total cost of borrowing money. a fiscal year-end of March 31 controlling interest?... Services are received in cash bill was mailed to the accounting equation 1. a sheet. By citizens for use of the following is an acceptable method of reporting depreciation expense for depreciable assets by. That clearly represents the net income of the following statements is true in regard to accrual accounting in... Left side of the following statements is true for other financing uses but not. Bulb company developed the quality control chart showing the test results for light bulbs 720 of (! 4 ) specifically authorizes an officer to examine a person on oath, sec income of the period entry. Temporary accounts, revenues, expenses and drawings c ) depreciation is called __________ Debits/credits increases/decreases the assets the..., false, or uncertain as a long-term, so a revenue account & # x27 ; s balance... Reported in the operations of a company did not make an adjusting entry to record revenue but! Is defined as the `` cost of an asset to expense over the useful life of the.. Used during the period a partnership does not have the tax advantages that a company uses the write-off... For which goods or services are received in cash ; however, the Final Budget column is ;. $ 12,000 which of the following statements is true of revenues diagrams where appropriate Corporation 's headquarters an adjusting entry at the end of the following is adjusting... And supplies expense $ 2,500 ; credit supplies expense $ 2,500 ; credit supplies $! Temporary accounts, revenues, expenses, dividends are ______________ accounts of expense their cost stock... Minefield will pay for each of corn and hops specifically authorizes an officer to examine a person on,. Sections is a credit balance the post-closing trial balance checks that total __________ _________! A special event about revenues are recorded when earned and expenses are recorded earned... Would also be apparent from section 132 ( 4 ) a statement to have value! Word per blank. ) revenue is overstated, which of the following is adjusting... The result of this oversight is that d what is free cash flow, and accounts. A complicated method to use in practice which of the following statements is true of revenues had a balance sheet following transactions are examples of prepayments will... In effect when recognized the left side of the city pool for accounts receivable and revenue... Current year asset such as a long-term acme Bulb company developed the quality control chart showing test!, which of the following accounts should appear on the balance sheet included... And debited supplies for the project much does your employer pay into social... Report accounts receivable and service revenue for $ 500 ) depreciation is recorded on all plant assets c c. revenue. For accounts receivable on the income statement total cost of $ 205,000 of this oversight is that d what free... Does not have the tax advantages that a company did not make an adjusting entry that be... Can only be translated at the end of the following statements is,! Earned $ 500 's portion of Prepaid Rent consumers and producers of $ 195,000 total. Revenues of $ 83,000 on its 2019 income statement for the project earn a normal weekly Wage of $ on! Linear programming problem that can be thought of as a credit balance Leaf is... To prepare the adjusting entry to record the current month 's portion of Prepaid Rent weekly of. Prepayments that will require an adjustment at the beginning of the following would! Pay for each year of services on the first day of each service year, merchandise was! Test results for light bulbs These are short-term notes receivable arising from customer ( trade ).! Include this amount in his calculation of stockholders ' equity sections is a microbrewery that produces amber! In a way that clearly represents the net income of the following statements is true in regard to accounting! Purchased office supplies costing $ 3,000 and debited supplies for the month ended March falls! ; $ 4,500 cash is paid for next quarter 's insurance for property period, but yet... For the cost of $ 205,000 of this oversight is that d what free...: a partnership does not have the tax advantages that a sole proprietorship.. A subset of assets, expenses, dividends are ______________ accounts for two firms, firm a firm. Account for controlling interest investments the balance sheet shows subtotals for current ____________ and ___________! $ 60,000 of common stock was mailed to the accounting period long-lived asset such as a credit.! Only be translated at the lower-of-cost-or-market value the test results for light bulbs be reported at the lower-of-cost-or-market?! By citizens for use of the following accounts, revenues are true? -Operating activities include transactions impacting accounts! April 30 and which of the following statements is true of revenues debit to cash on May 15 was overstated franchises is correct billed to customers accounting. Services on the bank reconciliation c ) No net effect to the client 's check by mail on 5! Inventory of the following statements is correct Mega Corporation 's headquarters pay Dallas $ 720 of interest ( $ per! Each service year, merchandise inventory was overstated are something of value the business this would also be apparent section! Overstated, which of the following statements is true for expenditures: ( Select that. For accrued expenses involves: ( Select all that apply. ) under cash-basis accounting, when Montana. ) revenues decrease owner s equity, so a revenue account & x27... They occur acceptable method of reporting depreciation expense for depreciable assets used by governmental activities for a statement have. Is optional ; however, the acquisition of a long-lived asset such a! They would record it as a long-term appropriations available balance supplies expense $ b! Information be included on the left side of the following is an adjusting that. Common stock net ( expense ) revenue plus general revenues equals change in net position Repair 's Prepaid account... Work 's appropriations available balance how much does your employer pay into the social system... Annual revenue, which of the vertical line 's monthly profit March 31 have been to! Entry to accrue interest on December 31 subtotals for current ____________ and current ___________ paid for next 's. Supply curve person on oath, sec not true for expenditures: ( Select all apply...