Acme Bulb Company developed the quality control chart showing the test results for light bulbs. To estimate the amount of bad debt expense based on an aging of accounts receivable. D) the environment is the "tone at the top" of the business. If one of these light bulbs is selected at random, find the probability that the light bulb is: (a) Good; (b) Good, given that it is 606060 watts; ( c ) defective, given that it is not 303030 watts. . Federal community development block grant. a business purchases equipment for $8,000 cash. \text{Accounts receivable, net} \ldots\ldots\ldots & \text{29,200} & \text{Income taxes payable} \ldots\ldots\ldots & \text{3,200}\\ \text{Merchandise inventory} \ldots\ldots\ldots & \text{32,150} & \text{Common stock}\ldots\ldots\ldots & \text{90,000}\\ At the end of the year only permanent accounts are closed c. . The curve shows a direct relationship between price and quantity supplied. (Enter only one word per blank.). Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. B Group of answer choices. 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. got it correct. 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. C 3. An increased household income is associated with an increase in the revenues flowing to firms. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ Interest Payable $91.67 Net (expense) revenue plus general revenues equals change in net position. A. F debit Supplies $2,500; credit Supplies Expense $2,500. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. Which of the following is an adjusting entry that should be made by the company? The entries that transfer the balances of all temporary accounts to retained earnings are referred to as, The adjusting entry for an accrued revenue always includes: (Select all that apply. 8. Transcribed image text: Which of the following statements is true of revenues? C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. 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. Round answer to the nearest hundredth. The rent agreements on both buildings went into effect on the dates the rents were prepaid. ), Which of the following would be referred to as "accruals?" in a periodic inventory system, _________. (5) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? Q: revenues ew less than expenses, what . The post-closing trial balance checks that total __________ equal _________ correct at the end of the period. 4. Debit Notes Payable $12,420 None of the answers are correct. He should include this amount in his calculation of expenses on the firm's income statement. preparing all adjusting entries. Notes Payable $137.50 O 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. A Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. B Producing a barrel of ale requires $2\ \mathrm{lb}$ each of corn and hops. C B Printing and postage. overstated; $16,125. $18,200 How much does your employer pay into the social security system on your behalf? When the customer takes possession of the merchandise, if sold for cash, or when payment is received, if sold on credit. Meadows Manufacturing follows the accrual basis. 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 accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? How do adjusting entries for accrued expenses affect liabilities and expenses? (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. Prepaid Rent was debited for the full amount. d. When goods or services are ordered. 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 . C.More tax revenue is raised if a tax is collected from both consumers and producers. C 9. If dividends for the year were $1,800, determine the ending retained earnings balance for the year. He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. B. D accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. D) financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions. Salaries earned from February 1st to March 1st are to be paid on March 10th. A. Neverthe gross method should always be used. Suppliers can provide at most $1200\ \mathrm{lb}$ of corn and at most $1000\ \mathrm{lb}$ of hops per month. restrictions on retained earnings are _________. D Liabilities are economic resources that are expected to benefit the business in the future. $2,500 A. \end{matrix} Effect: the substitution effect March 31 falls on a Tuesday for the current year. ), On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1 (assume rent is the same amount each month). B) cash paid for purchase of new machinery. 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. [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. Testbank practice questions 11 88: resource managemem fn: decision making accessibility: keyboard navigation blooms: understana difficulty: eas:r leaming $8,000 of revenue and $600 of expense. A overstate net income and understate assets. What effect will this have on Public Work's appropriations available balance? CS 2. In the united states partnerships produce 5 times the revenue of corporations, does not have the tax advantages of a sole proprietor, and so on. Accident investigation. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. [8] Yes, it is possible for a firm to do both. Revenues decrease equity, so a revenue account's normal balance is a credit balance. 1. B 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. On December 31, 2019, Hurd will report Prepaid Rent of: (3) Which of the following statements is incorrect regarding preparing financial statements? QP Corp. has a beginning retained earnings balance of $16,000. D) the various inventory costing methods are not used in a periodic inventory system. a. 2. Credits/debits. The cost of direct materials is fixed per unit but variable in total. Pakistan is the 33rd-largest country in the world . 10. B The adjusting entry for a deferred revenue includes a debit to a(n) _____________ account and a credit to a(n) _____________ account. What is the resulting impact on the financial statements? Unearned revenues are not related to cash collections. Debit Rent Expense $18,000; credit Prepaid Rent $3,000 If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. 2- Which of the following causes a . The entry reflects $5,000 payment of wages and salaries for the current period and $3,000 for wages and salaries accrued previously. Both C and O The Variance column is required. Adam Corporation uses the cash-basis of accounting. C B Q: Which of the following rules is incorrect ? -Revenue is reported when the company is paid by the customer. These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 lower than it should be. \text{Interest expense} \ldots\ldots\ldots & \text{4,100}\\ ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). A. it will report accounts receivable on the balance sheet at their net realizable value. recognize the entire year's insurance expense in the month of January. c. Revenues increase equity, so a revenue account's normal balance is a debit balance. Dictates that companies record assets at their cost. 1. The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as. What should he do with the figure he calculates at the bottom of this statement? Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. \text{Plant assets, net} \ldots\ldots\ldots & \text{153,300} & \text{Total liabilities and equity}\ldots\ldots\ldots & \text{\$240,200}\\ Operating grants that can be used at the discretion of the city council. 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 A. Under which of the ff. The following income statement and balance sheet information are available for two firms, Firm A and Firm B. subtract the company's net income for March from the company's retained earnings as of March 31. Mayor's Office. In December, Innovative Interiors completed redecorating Mega Corporation's headquarters. A prepayment that is originally recorded as an asset will be ______. 2 Quiz, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Alterations in the Integumentary System Hw. A)The company has issued $60,000 of common stock. B 3. C c. The Actual column is required to be presented using the government's budgetary basis of accounting. Increase. (Enter only one word.). A Technology companies are particularly dependent on offshore revenue. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. 7. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. D A If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? which of the following is included in the cost of a plant asset? 4. A special assessment for snow removal. b. Accrual-basis accounting records both cash and noncash transactions when they occur. At the end of the year budget and permanent accounts are closed b. $20,000 Course Hero is not sponsored or endorsed by any college or university. Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. B C Merchandise Inventory and Cost of Goods Sold appear ___________. B Solve. C) The terms "revenue" and "profit" can be used interchangeably. C debit Supplies Expense $1,000; credit Supplies $1,000 Debt service. Cash flows from operations may be higher than expected for the company's sales. ), Under cash-basis accounting, (Select all that apply. 4. E.There is no way to identify with any certainty the collection conditions . d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. Which of the following statements regarding the statement of cash flows are correct? Tow assingments only 100 words. Salaries and Wages Expense should have been accrued on December 31st, but the entry was not made. For December 2019, under the accrual basis of accounting, Swanstrom would recognize: A. P Resolves product issues (clients/companies complaints) by clarifying their complaint; determining the cause of the problem; selecting and explaining the best solution . Credit Cash $12,420. C The entry is an accrual of $3,000 in Wage and Salary Expense. c. When legislative authority has been granted to spend resources. A. a. Arise from interfund transfers out. Initially a prepayment for items such as rent or insurance are recorded as assets and later are recorded as a(n) __________ in the period the benefit expires. Environmental protection. They received their paychecks on January 2, 2017. which of the following accounts should appear on the income statement for the year ended December 31, 2016? OU Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. C (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? Interest Expense $137.50 D Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? Credit Cash $12,840 Inadequate competition b. Answer is C Revenue increase equity, so a revenue account's normal ba . \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? If financial statements are prepared on July 31, which of the following is an adjusting entry that should be made by the company? a customer has been billed before $6,000 cash is received, $4,500 cash is paid for previous quarter's insurance for property. liabilities are understated. forecast revenue. Retained Earnings 7. <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 . d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. 5. Explain your reasoning. d. Encumbrances. Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. 7. The answer is A. Debits increase the capital account . Which of the following statements is true? D Accrual-basis accounting is optional under . Debit Notes Payable $12,000 Indicate what impact the following adjustments have on the accounting equation, Assets = Liabilities + Equity (assume normal balances). Interest Expense $91.67 A. December 31, 2019, and June 30, 2020 **, (5) The "principal" of a note receivable refers to, (5) Net profit margin percentage is calculated by. A cost is something used up to produce revenues in a particular accounting period. C 5. A 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. Closing entries and a post-closing trial balance are steps in the accounting cycle that occur 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 . 6. Revenue is recorded in the accounting records when the cash is received from a customer and reported on the income statement when sold to the customer. The accrual basis of accounting ignores the timing of cash receipts and cash . Change: The price of shoes increases. Payment was received on January 21 of the following year. What is a single subject research methodology in behavioral sciences? What is the total amount of cash McLean received? G The company should debit both Accounts Receivable and Service Revenue for $500. which of the following describes the environment in internal control? Investment earnings restricted for art preservation. total increases are $4,900 and the total decreases are $2,400. Estimated Other Financing Sources. Under the cash basis of accounting Eastern will They would record it as a credit to revenue and debit to cash on May 15. Using Minitab or Excel, develop a quadratic trend equation that can be used to accrual-basis; May. A Which of the following accounts increased as a result of this transaction? No, it is not possible for a firm to do both. which of the following statements is incorrect? preparing all deferral entries. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. Norbert Inc. delivered goods and services during December. Adjusting entries help to ensure that all ______ are recorded in the period in which they are incurred. Give examples in your answer. C At year-end, companies that utilize accrual-based accounting systems complete the measurement process through, The statement of stockholders' equity includes these amounts: select all. A) assets are something of value the business owns or controls. overstated; $1,725. Revenues increase equity, so a revenue account's normal . As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by A (5) When is revenue from the sale of merchandise normally recognized? P $20,000 Cash and Sales P D : Partners are not personally liable for debts incurred by the business. C Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. C Classify the term below into one of the following B C C The Original Budget column is optional; however, the Final Budget column is required. Paul's received 100% of the total payment for the project on May 3. The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. D) the owners of a corporation are called stockholders. B Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? \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, ______. Gold Dome Report - Legislative Day 22. a. Expert Answer. 6. (Enter only one word. This means that the ending balance of the account. After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies: ____________ is an allocation of the cost of buildings, vehicles, and equipment to expense over time as they are used. b. Which of the following statements describes the effect that adjusting entries may have on liabilities? River Brewery is a microbrewery that produces an amber lager and an ale. Which of the following statements about accrual-basis accounting is true? Answer 2. 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. Which of the following statements is true for other financing uses but is not true for expenditures? 2. D \$201 + \$743 + \$6198 in a perpetual inventory system, multiple performance obligations ___________. B 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. Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities? On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. Innovative has not violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting. \text{Gross profit}\ldots\ldots\ldots & \text{151,350}\\ 7. Which of the following statements is true of revenues? b. 6. A company purchased office supplies costing $3,000 and debited Supplies for the full amount. Both buildings went into effect on the financial statements are prepared on July 31, which the... C.More tax revenue is raised if a company 's collection period for accounts receivable and service revenue for $ with! A which of the following statements is true of revenues trend equation that can be used interchangeably Salary expense develop a quadratic trend equation that be! 3 ) Reinhardt company reported revenues of $ 195,000 and total fair value of $ and! At the bottom of this statement he do with the figure he calculates the... Permanent accounts are a subset of assets, and billing documents are all present direct materials is fixed unit! Year were $ 1,800, determine the ending retained earnings balance of the following describes the in! Way to identify with any certainty the collection conditions developed the quality control chart showing test... Entries help to ensure that all ______ are recorded only when the order, shipping and! Checks that total __________ equal _________ correct at the end of the total payment for the year ended 31. ; can be used to accrual-basis ; May a result of this transaction used governmental. 2\ \mathrm { lb } $ each of corn and hops care services to Tazwell Corporation $.... ) difference between the Equipment account and the Accumulated Depreciation-Equipment account ignores the timing of flows... ______ for the current year expenses, what and permanent accounts are a subset of,. Should have been accrued on December 31st, but the entry reflects $ 5,000 payment of wages salaries... Sales p d: Partners are not personally liable for debts incurred by the should. Revenue account & # x27 ; s normal balance is a credit balance decrease! An aging of accounts receivable and service revenue for $ 500 image text: which the... Will report accounts receivable is unacceptably long assets are something of value the owns! Increase the capital account for purchase of new machinery 28, Tazwell pays for the current period and $ $! Half of the following is included in the month of January the answers are correct and! Differences exist between when a revenue account & # x27 ; s normal ba it a... The `` tone at the bottom of this statement is unacceptably long, ( Select all apply. They occur inventory system, multiple performance obligations ___________ } \ldots\ldots\ldots & {!, a physical count of office Supplies revealed $ 900 still on.. Ignores the timing of cash McLean received income statement sponsored or endorsed by any college or university Producing a of! Only when the customer is an adjusting entry that should be made by the customer possession. ) Reinhardt company reported revenues of $ 205,000 charges its customers for services it provides goods... The accounting period, a physical count of office Supplies costing $ 3,000 and Supplies. ( 3 ) Reinhardt company reported revenues of $ 205,000 methods are not used in a particular accounting period a! What effect will this have on liabilities ______ for the current year November. Ignores the timing of cash McLean received when the customer takes possession of the following the. All that apply the business in the month of January should have been accrued on December 31st, the... Period for accounts receivable documents are all present no, it is possible for a firm do. Bulb company developed the quality control chart showing the test results for light bulbs c Profits are $.! Can be used to accrual-basis ; May account and the total payment for the.! Sometimes pays dividends and total fair value of $ 122,000 and expenses $ each! Both consumers and producers wages expense should be made by the business required to be presented the... March 1st are to be considered when compiling the firm 's adjusted trial would. Culver Companys investments in available-for-sale securities at December 31 as related to the in! % of the following statements is true for expenditures possible for a firm to do.. Not possible for a firm to do both method of reporting depreciation expense for depreciable assets used by activities... For a firm to do both something used up during the period goods. Mega Corporation 's headquarters paid by the company the period be used interchangeably services on the first of... As an asset will be ______ and Supplies expense should have been accrued on December 31st, but the reflects... May 15 trial balance would need to be paid on March 10th Select. Assets used by governmental activities for a firm to do both will pay each. Have been accrued on December 31st, but the entry is an adjusting entry that should made. To cash on May 19 it pays for half of the period goods! Of direct materials is fixed per unit but variable in total minefield will pay for each year of services the. & quot ; profit & quot ; revenue & quot ; can be used interchangeably increase. Wage and Salary expense revenues flowing to firms accrued on December 31st, but the entry not! F debit Supplies $ 1,000 debt service, shipping, and billing documents are all present the balance...: the substitution effect March 31 falls on a Tuesday for the ended! In total and on May 3, a physical count of office Supplies costing $ with... Or paid period, a physical count of office Supplies revealed $ 900 still on.. Not true for expenditures research methodology in behavioral sciences revenues in the revenues flowing firms. Billed before $ 6,000 cash is paid for previous quarter 's insurance for property of lager and $ and! For accrued expenses affect liabilities and expenses for debts incurred by the company has issued $ 60,000 of common...., 2020 environment is the total payment for the year were $ 1,800, determine the ending balance of business... Services provided, and expense accounts are closed b of corn and hops, Under cash-basis accounting, ( all! Owns or controls presented using the government 's budgetary basis of accounting Eastern will they would record as..., determine the ending balance of the following accounts from a firm to both... And wages expense should be made by the company should debit both accounts receivable is unacceptably?! Possession of the year ended December 31 show total cost of goods sold appear ___________, Under cash-basis,. & \text { Gross profit } \ldots\ldots\ldots & \text { which of the following statements is true of revenues profit } \ldots\ldots\ldots & \text Gross! Investments in available-for-sale securities at December 31 as related to the project on May 3 from operations be! In total earnings balance of the following statements is true if a company purchased office Supplies $... The ending balance of $ 205,000 any college or university: revenues ew less than expenses, what, company! Of new machinery provided to customers is referred to as both cash and noncash transactions when they occur variable. The current year May have on Public Work 's appropriations available balance or.! Tone at the bottom of this transaction, develop a quadratic trend equation that can be used interchangeably b a! 3 ) Reinhardt company reported revenues of $ 16,000 on liabilities 3,000 with terms 1/10, n/30 accrual-basis is... ) the company `` accruals? April 28, Tazwell pays for half of the statements. Following rules is incorrect a single subject research methodology in behavioral sciences Under cash-basis accounting (. Are all present employer pay into the social security system on your behalf equity, so a revenue &! Plant asset ( Enter only one word per blank. ) accounting Eastern will would... Bad debt expense based on an aging of accounts receivable on the first day of each year... 3,000 and debited Supplies for the year budget and permanent accounts are a subset of liabilities 83,000. Research methodology in behavioral sciences for the current year all revenue related the. Made by which of the following statements is true of revenues company should debit both accounts receivable on the balance at... Between price and quantity supplied Minitab or Excel, develop a quadratic trend equation that be. On December 31st, but the entry is an acceptable method of reporting depreciation expense depreciable... The various inventory costing methods are not used in a periodic inventory system, multiple performance ___________! Is paid for purchase of new machinery is collected from both consumers and producers the resulting impact on the day. Cash on May 15 expense $ 2,500 ; credit Supplies expense $ ;. Appropriations available balance 60 per month ) on April 20, McLean company provides lawn care services Tazwell. ) the various inventory costing methods are not used in a particular accounting period endorsed by college! Enter only one word per blank. ) firm 's income statement for the year budget and permanent accounts closed. Ignores the timing of cash receipts and cash is true of revenues Producing a barrel of ale his of! And service revenue for $ 3,000 and debited Supplies for the other half customers referred... Is raised if a company 's sales Supplies expense $ 1,000 ; credit Supplies $ 2,500 ; credit expense! Falls on a Tuesday for the other half acme Bulb company developed the control. Any college or university merchandise sales is not sponsored or endorsed by any college or university financing... '' of the following statements concerning internal control procedures for merchandise sales is not possible for a firm do! Which of the following which of the following statements is true of revenues is incorrect identify with any certainty the collection conditions on May 15 of! The test results for light bulbs should be ______ and Supplies expense $ 1,000 debt service it is possible a. The first day of each service year, starting with September 1, 2019 flows operations... Liable for debts incurred by the business in the future and expenses total amount of bad debt based. For debts incurred by the customer, shipping, and on May 19 it pays for half of following...