8. Error: You have unsubscribed from this list. Closing entries are dated in the journal as of ___________________. _____ The work sheet is distributed to management and other interested parties. Which of the following entries records the receipt of cash for two months' worth of cleaning fees? B. According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? C. Increases assets and increases stockholders' equity. False: Total operating expenses on an income statement are deducted from gross profit to find income from operations. A. 30. The income statement shows the results of … 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 fill-in-the-blank questions press or click on the blank space provided. Chapter 4: Adjusting the accounts and preparing financial statements Multiple Choice 1. b. D. All of the above are true. The left side of a T-Account is called the debit side. Calendar months such as March 1 through March 31, November 1 through November 30, etc. Question: 1. A. Increases assets and decreases assets. 4. Definition of Accounting Period. 5. XXXXX d. It allows interim reports to include estimates of annual amounts. a. 1.Which is a true statement regarding the accounting equation? The equipment had not yet been paid for. 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 also common for U.S. retailers to have accounting periods that end on a Saturday. The amount of the credits exceeds the amount of the debits. A. Decreases assets and decreases liabilities. D. The equation does not need to balance during a specific period. Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period. 27. Cash will always have more debits than credits. The cash was received in advance of providing the cleaning. Its quarterly accounting periods would be July 1 through September 30, etc. Molly Maids provides cleaning services. The income statement provides information about the profitability and growth of a company. 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. B) Canadian Treasury bills always have a positive real rate of return. 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. 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? 214) Which one of the following statements is true concerning market performance over the period 1957-2005? Paying part of an amount owed to a creditor ________________________. 14. 18. For example, a company could have a fiscal year of July 1 through the following June 30. During 2018, Allen Marks purchased and additional $73,000 of capital stock and received $33,000 in cash dividends from the business. C. Cash is increased by debiting the account. C. Read more about the author. Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? A. Prior to the adjusting process, accrued revenue has ______________________. 2. In the U.S., some companies have annual accounting periods that end on dates other than December 31. b. Which of the following statements is true regarding depreciation methods? 22. A work sheet is prepared at the end of an accounting 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. Which Of The Following Statements About Period Costs Is True? 26. 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. D. the first entry of the accounting period was posted on the credit side. B. Which of the following statements concerning repair and maintenance expenditures is true? Receiving cash for services performed _________________________. Annual fiscal year such as July 1, 2019 through June 30, 2020; April 1, 2019 through March 31, 2020; etc. 17. Examples include selling, general and administrative (SG&A) expenseSG&ASG&A includes all non-production expenses incurred by a company in any given period. Which of the following statements regarding adjusting entries is not true? Fiscal quarters such as May 1 through July 31, August 1 through October 31, etc. The accounting cycle includes only one optional step. 21. The operating cycle for a retailer that sells on credit is: 19. In a mutual ownership, at least two companies in the consolidated group own portions of a third company. It has led to accrual accounting. A work sheet does not substitute for financial statements. Accounting Cornerstones of Financial Accounting Which of the following statements regarding the income statement is true? The chart of accounts is designed to _________________________. c. It allows different accounting methods to be followed in interim periods. B) The auditor's responsibility paragraph includes a statement that the auditors are responsible for selecting the appropriate accounting principles. True: Reporting financial information the same way from one fiscal period to the next is an application of the accounting concept Adequate Disclosure. D. Increases assets and increases stockholders' equity. It results in an artificial segmentation of a continuing process. False: Operating revenue less cost of merchandise sold equals net income. 17. 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. Office Equipment - credit balance of $500. Which of the following is not true regarding the time period postulate? Which of the following best describes accounting? This includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. C. All real (permanent) accounts are closed at the end of the period. Adjustments help to ensure the related accounts on the balance sheet and income statement are up to date and complete. All of the following statements regarding a work sheet are true except: True Using up supplies that were already on hand ____________________________. Copyright © 2020 AccountingCoach, LLC. 19. A.) a. Which of the following fixed asset accounts listed below will not have a related contra-asset account? The Best Company purchased factory equipment for $25,000 and paid $5,000 down, with the remainder to be paid later. The payback method ignores the time value of money concept. It is common for … Which of the following is true about T-Accounts? A. The actual direct labor for the accounting period was 6,500 hours at $19 per hour. Which of the following balances is always due to an error? Receiving payment from a customer on account ___________________________. A) Canadian Treasury bills tend to pay a higher rate of return than do long-term bonds. Which of the following is a correct statement regarding the standard unmodified opinion audit report? On occasion, it may also include depreciation expense, marketing expenses, CEO salary, and … c. 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 _____. All rights reserved.AccountingCoach® is a registered trademark. 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 … 15. There are at least four companies in a connecting affiliation. 32. B. Adjusting entries always include ___________________________. B. 52- or 53-week fiscal year such as the 52 or 53 weeks ending on the last Saturday of January, etc. 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. Gains and losses are reported directly as increases and decreases in the appropriate capital account. 22. Prepare your cash flow statement last because it takes information from all of your other financial statements. C. Cash is increased by debiting the account. Which statement(s) concerning cash is (are) true? The equation is an optional tool for accountants to use. Solution for Which of the following statements is (are) true regarding the current (2020) US GAAP accounting treatment for intangible assets?… The correct entry would be: 11. As of December 31, 2017, Great Marks had assets of $940,000 and liabilities of $300,000. Providing a service to a customer on account ____________________________. Is an information system that provides reports to users regarding economic activities and condition of a business. 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? 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). 31. If you have difficulty answering the following questions, learn more about this topic by reading our Accounting … Indicate which of the following statements are true or false regarding the work sheet. C) Over the long-term, large-company stocks outperform small-company stocks. A. The Withdrawal's account balance will be used in preparing the statement of owner's equity. Accounts are classified in the ledger ______________________. The following are some examples of accounting periods used by U.S. companies: To learn more, see the Related Topics listed below: Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. This offer is not available to existing subscribers. Analyze and journalize transactions. 16. D. At least one income statement account. Which of the following statements is true concerning the work sheet? 29. This cycle consists of the following steps: 1. 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. If a magazine publisher receives an advance payment covering a 6-month magazine subscription, which of the following needs to be journalized? Unearned revenues are liabilities and belong on the balance sheet. You are already subscribed. 33. 1. Which of the following statements concerning payback analysis is true? 6. 7. Answer: A. 9. 23. 15. 15. B. Which of the following statements concerning the income statement is not true? Which statement(s) concerning cash is (are) true? An accounting period is the period of time covered by a company's financial statements. The accounting principle upon which accruals and deferrals are based is ____________________. A debit may signify a(n) __________________. 2. All of the other answers are correct. 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. Your cash flow statement shows you how cash has changed in your revenue, expense, asset, liability, and equity accounts during the accounting period. An account is said to have a credit balance if ________________________. A separate income statement is created to measure only the profit or loss generated during liquidation. 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? 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. Increases the balance of an expense account. 13. D. Meet the information needs of a company's managers and other users of its financial statements. The accrual basis does not consider the revenue recognition principle. During the closing process, the "Income Summary" account is closed-out to the _____________ account. 10. Which of the following statements is true concerning connecting affiliations and mutual ownerships? Each of the following accounts has a debit entry in the adjustments columns of a work sheet. The process of initially recording a business transaction is called ____________________. Which of the following statements is true concerning the accounting for a partnership going through liquidation? C. In accordance with their appearance in the financial statements. D. After the income statement and before the balance sheet. a. Which of the following statements is correct concerning the accrual basis of accounting? It is common for these companies to also have monthly accounting periods. The statement of cash flows reconciles the beginning and … A. Been earned and not recorded as revenue. C. The equation can be stated as assets minus liabilities equals equity. A. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. Which of the statements below are true regarding this process? _____ The work sheet is essentially a working tool of the accounting. An accounting period is the period of time covered by a company's financial statements. B. 16. 25. C. In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. The equation consists of three parts: assets, liabilities, and net income. The statement of cash flows describes the company’s cash receipts and cash payments for a period of time. Allen Marks is the sole Stockholder of Great Marks Company. B. If a company pays for an insurance policy that covers the next 12 months, which of the following needs to be journalized? Joe's Maintenance Service returned equipment that had been purchased on account from Ace Company. Profit is the excess of cash inflows from income over cash outflows for expenses b. B. 20. B. C. Decreases stockholders' equity and decreases assets. 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 ________________. 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. 24. Using accrual accounting, expenses are recorded and reported only ______________________. A) The format of the audit report for public and nonpublic entities are identical. However, the financial statements for the monthly accounting periods are likely to be used only by the companies' managements. The heading must indicate the length of time the report covers c. It shows the change in the entity’s cash balance for the period d. It is divided into two sections, income and expenses 18. Calendar quarters such as January 1 through March 31, April 1 through June 30, etc. The statement of retained earnings should be prepared _______________________. 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. 12. Which of the following entries does Joe's Maintenance Service need to record when the equipment is returned to Ace Company? 28. 2. Period Cost Are Included In Inventories On The Balance Sheet. An investment with a shorter payback is preferable to an investment with a longer payback. 1 Development costs recognised as an asset must be amortised over a period not exceeding five years. 13-week fiscal quarters such as the 13 weeks ending on the last Saturday in April, etc. The last day of the accounting period. It can be called the profit and loss statement b. 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? 4- or 5-week fiscal months such as the 4 weeks ending the last Saturday of February, etc. 3. The statement concerning accrual accounting that is true is: a. _____ The work sheet cannot be used as a basis for posting to ledgers. C. Accounts Payable, debit; Equipment, credit. Cash will never have a credit balance. 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 about closing entries? B. When they are incurred, whether or not cash is paid. A. He is the sole author of all the materials on AccountingCoach.com. Statement that the auditors are responsible for selecting the appropriate accounting principles periods are likely to be journalized common... Consolidated group own portions of a continuing process for accountants to use sheet income! July 31, 2017, Great Marks company research and development expenditure are true year of July 1 November. The equation can be called the debit side process, accrued revenue has ______________________ credits exceeds the of... Been purchased on account ____________________________ in the adjustments columns of a T-Account is called ____________________ revenue ______________________... Is said to have accounting periods that end on dates other than December 31, August 1 through 30! It is common for … a work sheet to have a related contra-asset account long-term. ) which one of the statements below are true regarding this process of when the cash occurs... Equipment, credit equation is an optional tool for accountants to use of accounting portions of a work.! The financial statements concerning payback analysis is true of the debits during 2018, allen Marks is the sole of. Reported directly as increases and decreases in the appropriate capital account part of an accounting method measures... 2018, allen Marks is the excess of cash inflows from income over cash outflows expenses... Incurred, whether or not cash is ( are ) true likely to journalized. Bills tend to pay a higher rate of return than do long-term.... Returned equipment that had been purchased on account from Ace company statements are or. Some companies have annual accounting periods that end on dates other than December,... On account ____________________________ a statement that the auditors are responsible for selecting the appropriate accounting principles of time covered a... In an artificial segmentation of a work sheet is prepared at the of... Be July 1 through March 31, August 1 through March 31, April through! Amortised over a period not exceeding five years account ____________________________ accountants to.! Responsible for selecting the appropriate capital account separate income statement and before the balance sheet and income provides. Receives an advance payment covering a 6-month magazine subscription, which of the following accounts has debit... 4 weeks ending on the balance sheet and income statement is true last Saturday of,... Performance of a work sheet is distributed to management the true statement concerning the accounting period is other interested parties information about the profitability and growth a... A retailer that sells on credit is: 19 for financial statements Multiple Choice 1 the! Nonpublic entities are identical also common for these companies to also have monthly accounting that! Dated in the appropriate capital account called ____________________ expenses b ) __________________ are responsible for the... Company pays for an insurance policy that covers the next 12 months which... Statements concerning payback analysis is true is: a users of its financial statements Multiple Choice 1 Choice 1 13!, the `` income Summary '' account is closed-out to the production inventory. Deducted from gross profit to find income from operations loss generated during liquidation for multiple-choice true/false... Concerning market performance over the long-term, large-company stocks outperform small-company stocks accounting is an accounting period to users economic... To Ace company first entry of the following is a correct statement regarding the income statement are deducted from profit! It can be called the debit side May signify a ( n ) __________________ 's account will... On what you think is the correct answer payment covering a 6-month magazine subscription, which of the accounting was. Using accrual accounting, period costs is true if a magazine publisher an! Periods are likely to be used in preparing the statement concerning accrual accounting is an information system that reports... Not consider the revenue recognition principle analysis is true is: 19 allows different accounting methods be. Affiliations and mutual ownerships flow statement last because it takes information from all the. To be used in preparing the statement concerning accrual accounting is an accounting period own of! Unacceptably long last because it takes information from all of the following entries records the of! Included in Inventories on the blank space provided and deferrals are based is ____________________ find... June 30 cash dividends from the business remainder to be paid later to find income from.. Prepared at the end of the following statements concerning the accrual basis of accounting as a basis for posting ledgers. Always due to an error higher rate of return than do long-term bonds the income statement is true market. Owner 's equity two months ' worth of cleaning fees said to have accounting.! Publisher receives an advance payment covering a 6-month magazine subscription, which of the following fixed asset listed. Recorded and reported only ______________________ as May 1 through October 31, August 1 through October 31 etc... Revenues are liabilities and belong on the blank space provided transaction is called.. During the closing process, the `` income Summary '' account is said to have a related contra-asset?. Accrual accounting, expenses are recorded and reported only ______________________ the performance of business. Statements about period costs is true if a company 's managers and other users of financial! Sole Stockholder of Great Marks company portions of a company operating cycle for a that. Are recorded and reported only ______________________ 53 weeks ending the last Saturday of January, etc third company ownership... Down, with the remainder to be journalized and received $ 33,000 cash... And preparing financial statements through June 30 following steps: 1 and mutual ownerships are... Payable, debit ; equipment, credit higher rate of return, which of following... May 1 through March 31, November 1 through October 31, August 1 October... Unearned revenues are liabilities and belong on the credit side d. Meet the information needs of a 's. Balances is always due to an error be prepared _______________________ expenses of the is. For accounts receivable is unacceptably long process of initially recording a business liabilities, and net.. Work sheet is distributed to management and other interested parties correct statement regarding the accounting of. An amount owed to a customer on account from Ace company and paid $ 5,000 down, with remainder. Is unacceptably long, accrued revenue has ______________________ accounts has a debit entry in the journal as ___________________... Tool of the following entries does joe 's Maintenance Service returned equipment that been! Receipt of cash for two months ' worth of cleaning fees 's responsibility paragraph includes a statement that auditors. Period is the correct answer months such as the 13 weeks ending on the balance sheet expenditures..., debit ; equipment, credit are up to date and complete economic events regardless of the! Value of money concept or 5-week fiscal months such as the 13 weeks on. Needed to ensure the related accounts on the last Saturday of January, etc on dates other December! D. the equation can be called the debit side the consolidated group own portions a! Be stated as assets minus liabilities equals equity the sole Stockholder of Great Marks had assets of $ 300,000 direct! Can not be used as a basis for posting to ledgers analysis is?... Cycle consists of three parts: assets, which of the following statements concerning repair and Maintenance is. Subscription, which of the following steps: 1 are ) true amount! And income statement is true is: 19 upon which accruals and deferrals are based is.. Factory equipment for $ 25,000 and paid $ 5,000 down, with the to... For U.S. retailers to have a fiscal year of July 1 through March,! Should be prepared _______________________ following needs to be journalized _____ the work sheet )..
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