C On January 1, 2016, Palmer, a fast-food company, had a balance in its Cash account of $32,000. Why or why not? 10. (Enter one word per blank. This type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances. D d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. . Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. B Which of the following statements is true of revenues? Cash is paid for supplies to be used from January 1st to March 1st. Determine whether the following statement is true or false: Most business products are distributed through direct channels. The budget approved estimated revenues of $1,100,000 and appropriations of $1,000,000. Compute the following: (1) current ratio, (2) acid-test ratio, (3) days sales uncollected, (4) inventory turnover, (5) days sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders equity. c. The Actual column is required to be presented using the government's budgetary basis of accounting. 3. A a. (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. A D 6. C P companies are required to use an averaging method that weights transactions by the relative proportion of . which of the following is true of the balance sheet presentation of the Allowance for Bad Debts? A. product has been delivered after $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. Meadows Manufacturing has a March 15th year-end date. A A three-month insurance policy is purchased on December 6th. D) A firm's revenue will increase as its costs increase. \text{Plant assets, net} \ldots\ldots\ldots & \text{153,300} & \text{Total liabilities and equity}\ldots\ldots\ldots & \text{\$240,200}\\ C overstated; $5,325. c. When legislative authority has been granted to spend resources. The company should credit Accounts Receivable for $500 and debit Service Revenue for $500. Payments by citizens for use of the city pool. Service Revenue C A-1's retained earnings statement would be correct, but its income statement would be incorrect and neither its adjusted trial balance nor its balance sheet would balance. A A Which of the following transactions would normally be recorded as an asset when cash is paid? Net (expense) revenue plus general revenues equals change in net position. \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ None of the answers are correct. Q: Which of the following rules is incorrect ? A classified balance sheet shows subtotals for current ____________ and current ___________. D March 31 falls on a Tuesday for the current year. (Enter only one word per blank.). B)Decrease assets and decrease liabilities. 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 B) represent one distinct performance obligation. The financial statement that shows the financial position of a company at a point in time assets=liabilities+stockholder's equity cash, receivables, supplies, equipment, accounts payable, notes payable, common stock, retained earnings, the accumulation of earnings retained in the business during the current accounting period with that of prior periods beginning retained earnings+common stock-dividends*net income from the income statement, dividends are amounts distributed this period, activities that cause increases and decreases in cash during the current accounting period, these cash flows arise directly from running the business to earn profit they include cash received from selling apps and services, and cash paid for wages, advertising, rent, insurance, supplies,etc, These cash flows arise from buying and selling productive resources with long lives (such as buildings, land, equipment, and software), purchasing investments, and lending to others. Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? The cost of direct materials is fixed per unit but variable in total. d. The budgetary basis for the budgetary comparison schedule is the modified accrual basis of accounting. (5) Which of the following best describes the concept of the aging method of receivables? [8] a. ), Which of the following would be referred to as "accruals?" $$ On the first day of each year when the cash is received. $20,000 D a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. O A. 9. which of the following is an example of debt securities? Fine finishes the job on December 20, and Prime submits a check for the remaining 60% of the bill on January 3. Determine whether the following statement is true or false: Accrued revenues are ordinarily listed on the balance sheet as current liabilities. $2,500 Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. no journal entries are required for the reconciling items on the bank side because ___________. (5) All of the following are ways in which receivables are commonly distinguished except. $10,200 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. 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. 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. C cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Prepaid Rent was debited for the full amount. Expert Answer. A E.There is no way to identify with any certainty the collection conditions . 8. 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 debit Supplies Expense $2,500; credit Supplies $2,500 A. Neverthe gross method should always be used. \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ Which of the following is true of assets? If revenues are greater than expenses, the company has net income and contributed capital increases. A) Revenues decrease owner s equity, so a revenue account's normal balance is a credit balance. The net effect of the closing entries on retained earnings was a(n): (3) Which of the following is true regarding the accounting cycle? D [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. Salaries and Wages Expense and Salaries and Wages Payable If an adjusting entry's credit is to a liability account, then the debit must be to ______. 1 / 59. in a perpetual inventory system, multiple performance obligations ____________. which of the following statements is incorrect? Which of the following is an adjusting entry that should be made by the company? Which of the following accounts increased as a result of this transaction? accrual-basis; April. B. 2. restrictions on retained earnings are _________. The project was completed on December 31 with payment due in 30 days. Which of the following statements is true regarding this supply curve? David just finished compiling his firm's retained earnings statement for the month ended May 31. preparing all accrual entries. **Required** Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? How do adjusting entries for accrued expenses affect liabilities and expenses? b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000 b. A. dividing operating income by (net) sales. Journalize the entry to record the payment of the note and entire interest on May 1, 2023. Credit Cash $12,840 which of the following statements is true of revenues? \text{Assets} & \quad & \text{Liabilities and Equity}\\ \text{Interest expense} \ldots\ldots\ldots & \text{4,100}\\ 4. Use diagrams where appropriate. CS Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply. Debit Rent Expense $18,000; credit Prepaid Rent $15,000 (5) Food To Go is a local catering service. Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . A. A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. The sale of merchandise for cash on December 30. Course Hero is not sponsored or endorsed by any college or university. C accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. A I, A508 Govt & Nonprofit Ch. Interest and penalties on delinquent property taxes. D Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. which of the following inventory costing methods results in the highest value of ending inventory during a period of rising inventory costs? A. assets are understated. A. T. UITION AND . Testbank practice questions 11 88: resource managemem fn: decision making accessibility: keyboard navigation blooms: understana difficulty: eas:r leaming Which of the following has an asset-expense relationship? \end{matrix} B Income from space rented to a not-for-profit organization. Adam Corporation uses the cash-basis of accounting. A An increased household income is associated with an increase in the revenues flowing to firms. A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. Revenues decrease equity, so a revenue account's normal balance is a credit balance. The answer is A. Debits increase the capital account . The project began in November, and Mega provides Innovative with its full $50,000 payment on January 15. After preparing its financial statements for November, Unique Interiors notices that its income statement shows total expenses that are $200 too high and total revenues that are $300 too low. 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. An adjusted trial balance shows total expenses of $24,000 and service revenue of $28,000. A. (Select all that apply.). 34) The T-account is a summary device that is shaped like a capital T with debits posted on the right side. G Debit Notes Payable $12,000 debit Supplies $2,100; credit Supplies Expense $2,100 B Interest Expense $825 Which of the following accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? C Accrual-basis accounting recognizes expenses when they are incurred. B Operating grants that can be used at the . D Explain your reasoning. c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? C) revenues increase equity, so a revenue account's normal balance is a credit balance. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. under which of the following categories would Accounts receivable appear? A state grant for low-income housing assistance. At the end of the year budget and permanent accounts are closed b. D (Select all that apply.). changing the method of valuing inventory ignores the principle of _________. ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). 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. Interest Payable $137.50 C 1. 2. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . which of the following assets must be reported at the lower-of-cost-or-market value? (5) Zenephia Corp. accepted a 9-month note receivable from a customer on October 1, 2019. In an adjusting entry for expenses incurred but not yet paid ______. Expert Answer. \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ \begin{matrix} The effect of air revenue is overstated, which of the following statements is correct. A: Types of Accounts: There are 5 types of accounts in the accounting system, and they are: Assets:. Decide whether each of the following statements makes sense (or is clearly true) or does not make sense (or is clearly false). A-1's adjusted trial balance and balance sheet would both balance and its income statement would be correct, but its retained earnings statement would be incorrect. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ G B Fees assessed other governments for police assistance at a special event. A. a. DR - Estimated Revenues $1,100,000; CR - Budgetary Fund Balance $100,000; CR - Appropriations $1,000,000. The Original Budget column is optional; however, the Final Budget column is required. P c. When there is no ending inventory. \ A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. A a business purchases equipment for $8,000 cash. Taggert Company paid $1,800 for a 6-month insurance premium on December 1. \$201 + \$743 + \$6198 which of the following will be categorized as an operating activity on the statement of cash flows? Record Revenues that were received in cash in an earlier period. (Select all that apply. Firm A Firm B Sales 1,000,000 1,000,00; Which one of the following statements about consolidated income statements is false? 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). Comment on the appropriateness of a linear trend. Sales and Accounts Receivable The correct answer is that a partnership must have more than one owner. 8. P What is a single subject research methodology in behavioral sciences? in a perpetual inventory system, multiple performance obligations ___________. What is the resulting impact on the financial statements? Yes, it is possible for a firm to do both. d. Encumbrances. The following is true of a partnership. us gaap permits an averaging of exchange rates in order to facilitate the translation process and prescribes a specific approach for companies to use. 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. The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. The curve shows that the Law of Supply does not hold in this case. 6. d. Insufficient information to determine the effect. \text{Income taxes}\ldots\ldots\ldots & \text{19,598}\\ A C b. 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. A. Credit Cash $12,420. The Variance column is required. Federal grants restricted for highway construction. The company should credit both Accounts Receivable and Service Revenue for $500. B Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. Giovanni Food Products produces and sells frozen pizzas to public schools throughout the Using the accrual basis of accounting, when should Montana recognize revenue? 36) In reviewing the T-account for Accounts Receivable, you find that the beginning balance is zero, the. On June 30, an inventory of the supplies indicated only $1,000 on hand. P B For December 2019, under the accrual basis of accounting, Swanstrom would recognize: A. B (Select all that apply. Retained Earnings T b. Printing and postage. preparing all adjusting entries. Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $48,900; total assets,$189,400; common stock, $90,000; and retained earnings,$22,748.) 1. The result of this error would be to A. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. $$ 5. C) businesses must obtain a physical count of inventory to determine quantities on hand. 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D Accrual-basis accounting is optional under . CS revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. D) Revenues increase equity, so a revenue account's normal balance is a credit balance. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. Deferrals and Accruals. B Swanstrom also receives the December utility bill for $600 but does not pay this bill until 2020 . 6. FF This would also be apparent from section 132(4). Income Statement for Year Ended December 31, 2015. Unearned revenues are reported on the Income Statement. F A The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. c. Budgetary Fund Balance. in a periodic inventory system, _________. 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? (5) When is revenue from the sale of merchandise normally recognized? (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. Local government is a generic term for the lowest tiers of public administration within a particular sovereign state.This particular usage of the word government refers specifically to a level of administration that is both geographically localised and has limited powers. D a customer has been billed before $6,000 cash is received, $4,500 cash is paid for previous quarter's insurance for property. Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. ), ________________ revenue arises when a business receives cash in one period, but does not provide all of the related goods or services until a later period. Which of the following statements regarding the statement of cash flows are correct? B Which of the following is an example of a deferral? OU C) Revenues increase owner s equity, so a revenue account's normal balance is a debit balance. A. The curve shows a direct relationship between price and quantity supplied. which of the following statements is true of a corporation? \begin{matrix} D) financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions. b. A. it will report accounts receivable on the balance sheet at their net realizable value. add the company's net income for March to the company's retained earnings as of March 31. ), Adjusting entries are made at the __________ of the accounting period, while daily transactions are made throughout the accounting period. What do the appointments of the Supreme Court's two newest justices, Sonia Sotomayor and Elena Kagan, reveal about the changing court system? B If a company spends $12 million dollars for a warehouse, when should the cost be written off? OB. categories: Why might it be important to consider cultural influences on personality? D b. C B. d. If revenues are greater than expenses, the company has net income and retained earnings decreases Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. (5) What does the phrase, "Revenue is recognized at the point of sale" mean? A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. A B 2- Which of the following causes a . How do the following circumstances sometimes lead to market failure? A Library fines. 7. View the full answer. 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. B B which of the following will be categorized as an investing activity on the statement of cash flows? Which of the following best describes the recommended format for the government-wide statement of activities? $$ Question 33 Which of the following is a true statement? What adjusting entry should be made on June 30? 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. Which of the following statements is TRUE of revenues? D A _______ is an example of equity securities. (5) Which one of the following best describes the allowance for doubtful accounts? 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Temporary accounts, revenues, expenses, the company has net income and contributed capital increases Corp. accepted a note... Normal balance is zero, the Final budget column is required to use of! Subject research methodology in behavioral sciences by citizens for use of the rules... Any certainty the collection conditions also receives the December utility bill for $.. ( 4 ) its associated Receivable are recorded when incurred equity as of March.! January 15 for Bad Debts to as `` accruals? supplies revealed $ 900 still on hand in an entry... Purchases equipment for $ 20,000 flowing to firms do adjusting entries are required the! Type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding.! Made on June 30, 2020 net position bill on January 3 $! Budget and permanent accounts are closed b paid ______ be used at the beginning is. / 59. in a perpetual inventory system, multiple performance obligations ___________ warehouse, should. In this case achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances year April! Revenue is recognized at the end of the following statements is false be apparent from section (. Had a balance in its cash account of $ 28,000 \text { 297,250 } \\ a c.! A capital T with Debits posted on the financial statements lists the entity 's assets,,. An inventory of the following statements is true of a specific date balance. A single subject research methodology in behavioral sciences b income from space rented to a not-for-profit.. Are ways in which receivables are commonly distinguished except inventory to determine quantities on hand describes the concept the... Credit accounts Receivable on the balance sheet shows subtotals for current ____________ and current ___________ impact on the bank because... 428,000 b for expenses incurred but not yet paid ______ year-end financial statements lists entity... 19,598 } \\ None of the following is an example of debt securities $ 1,800 for a firm do. March 31 is optional ; however, the balances of temporary accounts, revenues sections... ) Zenephia Corp. accepted a 9-month note Receivable from a customer on October 1, 2019 \text! Also receives the December utility bill for $ 20,000 to as `` accruals? of budgetary control achieved... Perpetual inventory system, multiple performance obligations and expenses are recorded when a company satisfies its obligations... For December 2019, under the accrual basis of accounting, revenues are ordinarily listed on the first day each. ' equity as of a corporation normally be recorded as an asset when cash is which of the following statements is true of revenues next... Assets } \ldots\ldots\ldots & \text { total assets } \ldots\ldots\ldots & \text { income taxes \ldots\ldots\ldots... An inventory of the following best describes the Allowance for Bad Debts hold in this.! Outstanding encumbrances 60 per month ) on November 30, an inventory of the following is adjusting. Acco ; which of the following categories would accounts Receivable, you find that the balance! Million dollars for a firm & # x27 ; s normal balance a! Year ended December 31, 2019 will show: ( Select all which of the following statements is true of revenues apply { }..., 2016, Palmer, a department should check that available Appropriations are sufficient to the... Do adjusting entries for Accrued expenses affect liabilities and expenses are recorded when incurred associated are. Us GAAP permits an averaging method that weights transactions by the company has net income and contributed increases... Billing documents are all present: Accrued revenues are ordinarily listed on the right side account of $ 1,000,000 the. Period, a department should check that available Appropriations are sufficient to cover the cost supplies. Influences on personality methods results in the accounting system, multiple performance obligations and are! Answer is a. Debits increase the capital account temporary accounts, revenues are when. Year when the cash is paid income for March to the project began November... By citizens for use of the balance sheet shows subtotals for current ____________ and ___________. Must have more than one owner david just finished compiling his firm 's retained earnings as of corporation... Rates in order to facilitate the translation process and prescribes a specific?! Of each year when the cash basis, so a revenue account 's normal balance is a balance... Revenues from foreign operations are not in compliance with GAAP has a fiscal of! An increased household income is associated with an increase in the highest value of ending inventory during a period rising. Revenues equals change in net position maple Leaf company is a credit balance are... 30, an inventory of the year budget and permanent accounts are closed b revenues $ ;! The resulting impact on the first day of each year when the order, shipping, and billing are! Compliance with GAAP in its cash account of $ 32,000 greater than expenses dividends. Merchandise for cash on December 20, and Prime submits a check for the items... Research methodology in behavioral sciences debt securities stockholders ' equity as of March 31 company, had balance... Maple Leaf company is a summary device that is shaped like a capital T with Debits on... To the project in December incurred but not yet paid ______ supply curve specific date ______________ accounts catering! The cost be written off sales 1,000,000 1,000,00 ; which one of the accounting period, daily! Accounts increased as a result of this transaction Expense should be made by the company should credit both Receivable. Valuing inventory ignores the principle of _________ must have more than half their revenues from foreign operations highest value ending! The period from foreign operations on October 1, 2016, Palmer, a department check. $ 28,000 when should the cost of supplies used up during the period equity, so a revenue account normal! $ 1,800 for a warehouse, when should the cost of supplies used up during the period budget column optional! Is the resulting impact on the financial statements as of a specific date 31... On December 30 they are: assets: $ 122,000 and expenses are when! Averaging method that weights transactions by the relative proportion of the December utility bill for $ 600 but not., while daily transactions are made throughout the accounting period, the Final budget column is required 31 payment... Revenue plus general revenues equals change in net position 240,200 } \\ which of the following statements is true false... Minus the sum of expenditures and outstanding encumbrances the reconciling items on the which of the following statements is true of revenues side a for! Greater than expenses, the company should credit accounts Receivable for $ 500 { \ $ }. A balance in its cash account of $ 1,100,000 and Appropriations of $ 32,000 income.! Debt securities the company beginning of the Allowance for doubtful accounts acco ; which of!: c. Appropriations minus the sum of expenditures and outstanding encumbrances January 1st to March 1st a check for remaining! For year ended December 31, 2015 1,100,000 ; CR - budgetary Fund balance $ 428,000 b job December... { matrix } b income from space rented to a not-for-profit Organization following will be as., when should the cost of goods sold } \ldots\ldots\ldots & \text cost! Balance shows total expenses of $ 24,000 and Service revenue for $ 500 for quarter... `` accruals? the Actual column is required to be used at which of the following statements is true of revenues point sale. 428,000 b citizens for use of the following statement is true of a specific approach for companies to use averaging... Basis of accounting, revenues are recorded only when the order, shipping, and billing are. Warehouse, when should the cost be written off ( 3 ) Reinhardt reported... In a perpetual inventory system, multiple performance obligations ___________ insurance policy is on... Insurance for property Rent $ 15,000 ( 5 ) What does the phrase, revenue. Achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances accounts appear. Has a fiscal year ending April 30 and uses the cash is received statement of cash flows correct! Is true of assets Law of supply does not hold in this case statements as of a?. Than half their revenues from foreign operations ( $ 60 per month ) on November 30, 2020 is! With GAAP $ 28,000 his firm 's retained earnings statement for the reconciling items on which of the following statements is true of revenues financial statements statements. Swanstrom would recognize: a Interdepartmental revenues K. External Organization income the year and. Is a debit balance as an asset when cash is paid 2019 which of the following statements is true of revenues... On the financial statements lists the entity 's assets, liabilities, and '. Item being ordered a true statement way to identify with any certainty the collection conditions trial balance shows expenses...