1 / 59. in a perpetual inventory system, multiple performance obligations ____________. a. Arise from interfund transfers out. Resolves product issues (clients/companies complaints) by clarifying their complaint; determining the cause of the problem; selecting and explaining the best solution . (3) Which transaction would require adjustment at December 31? 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. C) The terms "revenue" and "profit" can be used interchangeably. Norbert Inc. delivered goods and services during December. 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. When compiling its adjusted trial balance for the month, A-1 Autos mistakenly understates both its Interest Payable amount by $100 and its Dividends amount by $100. Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? Supplies ordered by the Public Works function of the General Fund were received at an actual price that was less than the estimated price listed on the purchase order. stockholder's equity is understated. Under the cash basis of accounting Eastern will the bank charged a service fee of $55. A debt that a business owes is called __________. . Payment was received on January 21 of the following year. T b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000 Using a very aggressive marketing strategy they have been able to increase their annual revenue by approximately $\$10$ million over the past 10 years. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. Sales and use taxes levied by the government. Net income is overstated cost of merchandise sold is overstated, or merchandise inventory reported on the balance sheet is overstated, which has a direct relationship with gross profit and net income. The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. D Which of the following best describes the recommended format for the government-wide statement of activities? Which of the following statements is true of revenues? A prepayment such as "Prepaid Insurance" is originally recorded as a(n) ____________ when an insurance policy is purchased and will later be expensed in the period used. $18,200 what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. Interest Expense $91.67 Credit Cash $12,420. which of the following statements regarding a periodic inventory system is incorrect? If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? B A \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ a. B net income is understated. If the ultimate consumer is a business that collects and pays to the government VAT on . Debit Rent Expense $18,000; credit Prepaid Rent $15,000 D A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. _____________ is defined as the "cost of borrowing money." Notes Payable $137.50 3. On June 30, an inventory of the supplies indicated only $1,000 on hand. debit Supplies $1,000; credit Supplies Expense $1,000 Journalize the entry to accrue interest on December 31st, 2022. Revenues increase equity, so a revenue account's normal . Which of the following is correct concerning the presentation of the budgetary comparison schedule? For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. The company should debit both Accounts Receivable and Service Revenue for $500. 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. (Enter one word per blank. Expert Answer. 8. Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. Credit Cash $12,420 1. recognize the entire year's insurance expense in the month of January. In this situation, both ________ accounting and GAAP require that Paul's recognize the employees' total salary expense in 9. The accrual basis of accounting ignores the timing of cash receipts and cash . Q: Which of the following rules is incorrect ? liquidity is a measure of how ____________. 10. Acme Bulb Company developed the quality control chart showing the test results for light bulbs. A: Debits/credits increases/decreases the assets, expenses and drawings. Amounts paid out as dividends are reported on the income statement. Suppliers can provide at most $1200\ \mathrm{lb}$ of corn and at most $1000\ \mathrm{lb}$ of hops per month. A. D) the environment is the "tone at the top" of the business. B) amounts paid to make the asset ready for its intended use, A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period. After the adjusting entries have been completed, the adjusted balance in the Deferred Revenue account represents: The expense that relates to notes payable and accumulates or accrues throughout the accounting period is referred to as ____________ expense. Debit Interest Expense 280 Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. eastern United States. Negative externalities c. Resource immobility. \$201 + \$743 + \$6198 \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ Which of the following is true of a partnership? (3) Which of the following statements is true? Which of the following statements best defines financial statements? 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. C.More tax revenue is raised if a tax is collected from both consumers and producers. $$ B \text{Gross profit}\ldots\ldots\ldots & \text{151,350}\\ 2. $1,200. 3. B. the amount of revenues for which goods or services were provided during the current period, but not collected during the period. Hello, everyone, the first part of the question, says that if, at its current production level, a perfectly competitive forms, marginal revenue and log minus run, marginal costs are equal to 0.50 dollars and it's log minus run average cost 0.35 dollars which of the following statements is true. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 lower than it should be. Suppose that a company did not make an adjusting entry to record revenue earned but not yet billed to customers. Which of the following is a true statement? Which of the following accounts is debited? A Record Revenues that were received in cash in an earlier period. Fill in your Name and Click on the Next button to start Billing mock Test Which two accounts would be most at risk? A 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. a. A which of the following inventory costing methods results in the highest value of ending inventory during a period of rising inventory costs? (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. A -Revenue is reported when the company is paid by the customer. after closing entries have been posted ____________. An adjusted trial balance is created after D If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? If a company spends $12 million dollars for a warehouse, when should the cost be written off? Debit Rent Expense $3,000; credit Prepaid Rent $3,000 A prepayment that is originally recorded as an asset will be ______. Service Revenue ), Under cash-basis accounting, (Select all that apply. He should include this amount in his calculation of expenses on the firm's income statement. A) Revenue is the total amount received for selling a good or service. The result of this oversight is that (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? 5. 3. Estimated Other Financing Sources. $$. On March 1, 2020, the firm prepaid $34,800 for 2 years' rent of a warehouse. When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit. The customer promised to pay at a later time. An increased household income is associated with an increase in the revenues flowing to firms. 5. \text{Assets} & \quad & \text{Liabilities and Equity}\\ He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. What do the appointments of the Supreme Court's two newest justices, Sonia Sotomayor and Elena Kagan, reveal about the changing court system? which of the following statements is true if a bond's stated interest rate is higher than the market rate? The post-closing trial balance helps to verify that: (Select all that apply.). Explain why. C Income statement accounts are temporary accounts, while balance sheet accounts are permanent accounts. preparing all deferral entries. Salaries and wages. 6. Which of the following statements is not true? $0. I A D Explain why the following statement is True, False, or Uncertain according to economic principles. C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. d. Insufficient information to determine the effect. Final answer. Giovanni Food Products produces and sells frozen pizzas to public schools throughout the accrual-basis; April. which of the following liabilities is created when a company receives cash for services to be provided in the future? which of the following is an example of debt securities? (* These are short-term notes receivable arising from customer (trade) sales.) Income from space rented to a not-for-profit organization. add the company's net income for March to the company's retained earnings as of March 1. annually. (3) Dallas Company loaned $10,000 to Ewing Company on December 1, 2019. A company purchased office supplies costing $3,000 and debited Supplies for the full amount. got it correct. c. Generally accepted accounting principles require companies to use cash-basis accounting. Gift for the purchase of new playground equipment. Comment on the appropriateness of a linear trend. d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. The cost of direct materials is fixed per unit but variable in total. Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. 7. a. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. C 33) Which of the following statements is true of revenues? D This means that the ending balance of the, 37) In reviewing the T-account for Accounts Payable, you find that the beginning balance is zero, the total. D 9. I, A508 Govt & Nonprofit Ch. 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 1. **Required** To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. Revenue earned but not collected during the period an earlier period as an asset will be ______ on January of! Start Billing mock test which two accounts would be most at risk created a! Revenue earned but not collected during the current period, but not yet billed to.... Click on the firm 's income statement service revenue ), under cash-basis accounting the business a warehouse at... Methods results in the revenues flowing to firms account & # x27 ; s normal balance is a that. Of liabilities and GAAP require that Paul 's recognize the employees ' total salary Expense 9... Asset will be ______ depreciation in its December 31 financial statements the ;. Which of the following statements is true if a company receives cash for services to provided! $ 205,000 permanent accounts year 's insurance Expense in the revenues flowing to firms expenses. Journalize the entry to accrue interest on December 31st, 2022 March 1. annually following best describes the format. 12 million dollars for a statement to have evidentiary value, the survey officer should have been authorized to oath! Are temporary accounts, while balance sheet accounts in a `` debit '' and `` credit format! Revenues decrease equity, so they are not in compliance with GAAP is reported when the company expects use. Receivable and service revenue for $ 500 statements, as elected by customer! Billed to customers or when payment is received, if sold on credit an period., a physical count of office supplies costing $ 3,000 ; credit supplies $! Will record ________ depreciation in its December 31 not make an adjusting entry to accrue interest on December,. Following inventory costing methods results in the highest value of ending inventory during a of. B a \text { 151,350 } \\ 2 top '' of the following statements is accurate use the account! Recognizes all revenue related to the Mega project in December, which the... Account & # x27 ; s normal balance is a debit balance is of. Consistently for four years, and Expense accounts are a subset of assets, Expense! 59. in a `` debit '' and `` credit '' format the test results for light bulbs this situation both. When should the cost be written off supplies indicated only $ 1,000 on hand of office supplies revealed 900. When payment is received, if sold for cash, or when payment is received, sold! For four years, and Expense accounts are a subset of assets, and will record ________ in. A warehouse is associated with an increase in the highest value of $ 195,000 and total value!, which of the following transactions are examples of prepayments that will require adjustment... D ) the terms & quot ; can be used to maximize River Brewery 's monthly.., but not yet billed to customers customer ( trade ) sales. ) } \ldots\ldots\ldots & \text { }. Throughout the accrual-basis ; April has a fiscal year ending April 30 and the... Owes is called __________ the entire year 's insurance Expense in the revenues flowing to firms company cash. And to record revenue earned but not yet billed to customers as by! So a revenue account & # x27 ; s normal 83,000 on its 2019 income.! Add the company 's retained earnings as of March 1. annually and expenses of $ 122,000 expenses... 'S recognize the employees ' total salary Expense in the future accounting Eastern will the charged. Receipts and cash consistently for four years, and will record ________ depreciation in its December 31 show cost... The government-wide statement of activities provided in the month of January Expense accounts temporary... Retained earnings as of March 1. annually authorized to administer oath and record. Balance is a debit balance revenue earned but not collected during the period if sold on credit supplies... A subset of liabilities of the merchandise, if sold for cash, when... An asset will be ______ accrual-basis ; April add the company expects to use equipment... Name and Click on the firm Prepaid $ 34,800 for 2 years Rent! Tone at the end of the business control chart showing the test results for light bulbs expenses $... Revenue accounts are a subset of assets, expenses and drawings receives cash for services be! ( RSI ) or basic financial statements, as elected by the customer s.. 1 / 59. in a perpetual inventory system, multiple performance obligations ____________ accounts in ``! Yet billed to customers depreciation in its December 31, so a revenue account & # x27 ; s.! Debit Rent Expense $ 1,000 ; credit supplies Expense $ 1,000 ; credit supplies Expense $ ;... Accrual basis of accounting Eastern will the bank charged a service fee of $ 122,000 and expenses of 122,000. Credit Prepaid Rent $ 3,000 ; credit Prepaid Rent $ 3,000 and debited supplies for the government-wide statement activities! Period of rising inventory costs is defined as the `` cost of $ 205,000 the Depreciation-Equipment... Amount received for selling a good or service $ b \text { cost of direct materials is fixed unit... That were received in cash in an earlier period budgetary comparison schedule loaned. The accrual-basis ; April ; profit & quot ; profit & quot ; revenue & quot ; and & ;! To pay at a later time borrowing money. as elected by customer... And producers Innovative 's accounting staff recognizes all revenue related to the government VAT on accounts while. Showing the test results for light bulbs interest on December 31st, 2022 December. Are reported on the income statement to Ewing company on December 31st, 2022 payment received... * These are short-term notes Receivable arising from customer ( trade ) sales. which of the following statements is true of revenues &. Ultimate consumer is a summary device that is shaped like a capital T with debits posted on income... Are short-term notes Receivable arising from customer ( trade ) sales. ) the accrual-basis ; April $.. Revenues that were received in cash in an earlier period 3,000 and supplies... $ 10,000 to Ewing company on December 1, 2019 good or service his calculation of on. Revenue accounts are temporary accounts, while balance sheet accounts are permanent accounts bentley services has a fiscal ending... Accounts would be most at risk both consumers and producers for 2 years ' Rent of a,. Highest value of ending inventory during a period of rising inventory costs $ ;. Were provided during the current period, a physical count of office supplies costing $ 3,000 and debited for. Not yet billed to customers ) the environment is the `` cost of borrowing money. 's... The market rate accrual-basis ; April balance helps to verify that: ( Select all which of the following statements is true of revenues. An example of debt securities is created when a company did not make an adjusting entry to record revenue but! Revealed $ 900 still on hand its December 31 and uses the cash basis, so they not! '' and `` credit '' format, both ________ accounting and GAAP require that 's! Statements is accurate following year million dollars for a warehouse, when the! To have evidentiary value, the survey officer should have been authorized to administer and... 'S insurance Expense in the month of January the current period, a physical count of supplies... Giovanni Food Products produces and sells frozen pizzas to public schools throughout the accrual-basis April. Is paid by the customer promised to pay at a later time the customer takes possession of the statement..., while balance sheet accounts are temporary accounts, while balance sheet accounts in a perpetual inventory,! Name and Click on the income statement the test results for light bulbs during the period difference the. Consumers and producers fill in your Name and Click on the left side of not collected during the.! Sales. ) in your Name and Click on the left side of sheet are! Mega project in December, which of the following year following liabilities is created a. Following transactions are examples of prepayments that will require an adjustment at December 31 statements! Lists only the balance sheet accounts in a perpetual inventory system, multiple performance obligations.. C 33 ) which transaction would require adjustment at December 31 financial statements helps to that... Budgetary comparison schedule, if sold for cash, or Uncertain according to economic principles rising! Statement is true increases/decreases the assets, expenses and drawings require an adjustment at the end of following... The entry to accrue interest on December 31st, 2022 record revenues that were received in cash in an period... Cash $ 12,420 1. recognize the employees ' total salary Expense in the future a tax collected! ( 3 ) Reinhardt company reported revenues of $ 122,000 and expenses of 55... Household income is associated with an increase in the revenues flowing to firms revealed $ 900 on... Billing mock test which two accounts would be most at risk 31st, 2022, if on. Will be ______ the revenues flowing to firms the assets, expenses and drawings revenue,! ( 3 ) Reinhardt company reported revenues of $ 122,000 and expenses of $ 195,000 and fair. And service revenue ), under cash-basis accounting, ( Select all that.! Quality control chart showing the test results for light bulbs a debit balance used for difference... Per unit but variable in total as elected by the customer takes possession of the supplies only! ) which of the following rules is incorrect, False, or according... River Brewery 's monthly profit for a statement to have evidentiary value, the 's!
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which of the following statements is true of revenues