which of the following statements is true of revenues

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. Classify the term below into one of the following Revenues decrease equity, so a revenue account's normal balance is a credit balance. Paul's received 100% of the total payment for the project on May 3. 133A does not permit the same. 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. Indicate whether each of the following items should be classified as taxes (T), licenses and permits (LP), intergovernmental revenues (I), charges for services (CS), fines and forfeits (FF), or miscellaneous revenues (M) in a governmental fund. These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 higher than it should be. D A 9. 24. B) cash paid for purchase of new machinery. Which of the following is an example of a deferral? The entry is an accrual of $3,000 in Wage and Salary Expense. B They would record it as a credit to revenue and debit to cash on April 30. A debt that a business owes is called __________. A company purchased office supplies costing $3,000 and debited Supplies for the full amount. He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. D $8,000 of revenue and $600 of expense. A. Meadows Manufacturing follows the accrual basis. (5) If a company uses the direct write-off method of accounting for bad debts. Which of the following is a true statement? 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The budget approved estimated revenues of $1,100,000 and appropriations of $1,000,000. $$ Comment on the appropriateness of a linear trend. Selected year-end financial statements of Cabot Corporation follow. a. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. If an expense has been used or consumed but a bill has not been received at the end of the accounting period, which of the following is needed? A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. Accounts Receivable. Building permits. 6. Maple Leaf also performs services of $1,875 during the last two days of March, but is not paid in full until April 13. 3. Which of the following is true of a partnership? it is used in the operations of a business. B If the ultimate consumer is a business that collects and pays to the government VAT on . C Green Lawns Corporation earned $500 for landscaping services rendered. Using Minitab or Excel, develop a quadratic trend equation that can be used to The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. At December 31, 2019, GolfWorld should make the following adjustment: A. Debit Sales Revenue by $3,750 and credit Unearned Sales Revenue by $3,750. 4. which of the following assets must be reported at the lower-of-cost-or-market value? Interest and penalties on delinquent property taxes. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . b. 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. C A) result in revenue being recorded when the separate performance obligations are identified because there is a binding contract. 2. Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. D product has been delivered after $6,000 cash is received; $4,500 cash is paid for the previous quarter's insurance for property. B Create a chart showing how each of the conditions below might cause market failure. Journalize the entry to accrue interest on December 31st, 2022. Debit Notes Payable $12,000 At the end of the year only permanent accounts are closed c. . (Enter only one word. The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. [8] (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? Taggert Company paid $1,800 for a 6-month insurance premium on December 1. total increases are $4,900 and the total decreases are $2,400. Unearned revenues represent cash received from customers for services provided. B If an adjusting entry's credit is to a liability account, then the debit must be to ______. A prepayment that is originally recorded as an asset will be ______. 8. b. Debit Notes Payable $12,000 Mayor's Office. The accounts are adjusted after preparing the financial statements. Imagine if you c gross profit, operating income, net income. They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. How do temporary accounts differ from permanent accounts? subtract the company's net income for March from the company's retained earnings as of March 31. The employees of Leichester Services, Inc. worked the last two weeks of December, 2016. Credit Cash $12,420 If dividends for the year were $1,800, determine the ending retained earnings balance for the year. 4. C) depreciation is recorded on all plant assets. Which of the following statements is true? Innovative has not violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting. A. T. UITION AND . Expert Answer. $$ d. The key elements of accrual-basis accounting are the . Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ Residential trash disposal. B 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. The adjusted balance for Prepaid Insurance at December 31, 20122, will be b. d. DR - Fund Balance $428,000; CR - Revenue $428,000, b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000. \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ 4. \begin{matrix} The company should credit both Accounts Receivable and Service Revenue for $500. Revenues decrease equity, so a revenue account's normal balance is a debit balance. Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. 2- Which of the following causes a . Study with Quizlet and memorize flashcards containing terms like Which of the following statements about accrual-basis accounting is true? Use diagrams where appropriate. D Debit Rent Expense $18,000; credit Prepaid Rent $3,000 Prepare the adjusting entry. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Group of answer choices. D preparing all accrual entries. Yes, it is possible for a firm to do both. How does Indian village life compare to city life? A: Debits/credits increases/decreases the assets, expenses and drawings. QP Corp. has a beginning retained earnings balance of $16,000. G \end{matrix} The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. a depreciable asset's cost minus accumulated depreciation is called __________. Innovative has violated GAAP because generally accepted accounting principles require that companies use cash-basis accounting. 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. D A: Types of Accounts: There are 5 types of accounts in the accounting system, and they are: Assets:. b. C If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? c. Generally accepted accounting principles require companies to use cash-basis accounting. c. When there is no ending inventory. $$ How do the following circumstances sometimes lead to market failure? How do adjusting entries for accrued expenses affect liabilities and expenses? C Federal grants restricted for highway construction. If Bentley Services performed $12,000 worth of services from April 18-April 30, 2022 and the customers paid for the services on May 15, how would Bentley record this transaction? Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Century 21 Accounting: General Journal, Introductory Course, Chapters 1-17, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman. B)Total revenues during the year equal . Which of the following accounts is debited? A The customer promised to pay at a later time. c. The Actual column is required to be presented using the government's budgetary basis of accounting. A To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. G D The cost of direct materials is fixed per unit but variable in total. cash-basis; May. \text{Net income} \ldots\ldots\ldots & \text{\$ 29,052}\\ Motor vehicle fuel taxes restricted for road repair. a business purchases equipment for $8,000 cash. 132(4) specifically authorizes an officer to examine a person on oath, sec. Not recorded because it is a projection and not yet known. 9. Regarding liabilities, which of the following statements is incorrect? C C -Revenue is reported when the company is paid by the customer. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. Exceptionally well-versed in all aspects of sales & product knowledge with an impressive background in generating multimillion/billion dollar growth & expanding revenue streams. 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. the liability created when a business collects cash from its customers before completing a service or delivering a product is called _____. \text{Gross profit}\ldots\ldots\ldots & \text{151,350}\\ Debit Notes Payable $12,420 Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? A If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? Firm A Firm B Sales 1,000,000 1,000,00; Which one of the following statements about consolidated income statements is false? Which of the following statements is true for other financing uses but is not true for expenditures? B. the amount of revenues for which goods or services were provided during the current period, but not collected during the period. Which of the following statements is not true? debit Supplies $1,000; credit Supplies Expense $1,000 All income statement, revenue and expense accounts are transferred at the end of the accounting period into the income summary account as a temporary owner's . The project began in November, and Mega provides Innovative with its full $50,000 payment on January 15. At the end of the year budget and permanent accounts are closed b. This would also be apparent from section 132(4). 2. Credit Cash $12,420 c. Variable costs are direct costs; only . Net (expense) revenue plus general revenues equals change in net position. Cash and Sales. They would record it as a credit to revenue on April 30 and a debit to cash on May 15. C. Revenues decrease equity, so a revenue account's normal balance is a debit balance. Which of the following is the correct journal entry to record the budget? 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. When goods or services are ordered. not record the insurance expense but disclose it in the footnotes to financial statements. 1. Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. 1. C Barbers and hairdressers' registration fees. Financial statements include - government-wide, government fund, proprietary fund, and fiduciary fund statements. D the bank charged a service fee of $55. Payment was received on January 21 of the following year. d. Insufficient information to determine the effect. which of the following is included in the cost of a plant asset? The project was completed on December 31 with payment due in 30 days. Innovative has violated the revenue recognition principle because this principle states that all revenue related to the Mega project be recognized in January. A. Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. 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? \begin{matrix} 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. (5) Zenephia Corp. accepted a 9-month note receivable from a customer on October 1, 2019. 5. B) it is shown as a contra account related to accounts receivable. Interest Payable $91.67 C C Accrual-basis accounting recognizes expenses when they are incurred. Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. D advance cash payments of future expenses are called _________. A. (Select all that apply.). Dallas's adjusting entry at December 31, 2019, is: (3) Ron's Diner received the following bills for December 2019 utilities: (3) In September 2019, GolfWorld Magazine obtained $15,000 of subscriptions for 1 year of magazines and credited Unearned Sales Revenue. B Not personally responsible for the debts incurred by the business. 6. Jones Financial Services, Inc. performed accounting services for a client in December. An increased household income is associated with an increase in the revenues flowing to firms. overstated; $16,125. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. Give examples in your answer. \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ 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. C D Sales and use taxes levied by the government. accrual-basis; April. A value-added tax ( VAT ), known in some countries as a goods and services tax ( GST ), is a type of tax that is assessed incrementally. the vertical line and credits posted on the right side of the vertical line. See Page 1. If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? Using the accrual basis of accounting, when should Montana recognize revenue? LP InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . Charges to a local university for extra city police protection during sporting events. Revenues increase equity, so a revenue account's normal . accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. C Donation of bonds to the city by a wealthy resident. Fund, function or program, organization unit, activity, character, and object. (5) When should the net method be used to record sales revenue? He should include this amount in his calculation of assets on the firm's balance sheet. categories: Why might it be important to consider cultural influences on personality? Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. overstated; $1,725. P March 31 falls on a Tuesday for the current year. 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. C While the prospect of passage for many of these bills is low, they are sure to keep committees and . A C Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? In this situation, both a. In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. 9. B Accrual-basis accounting follows the fiscal year assumption. A. \text{Plant assets, net} \ldots\ldots\ldots & \text{153,300} & \text{Total liabilities and equity}\ldots\ldots\ldots & \text{\$240,200}\\ $2,200. C It was determined that $2,200 of the Prepaid Insurance had expired. Closing entries and a post-closing trial balance are steps in the accounting cycle that occur Which of the following statements is true for other financing uses but is not true for expenditures? What is a single subject research methodology in behavioral sciences? He should include this amount in his calculation of revenues on the firm's income statement. CS Study with Quizlet and memorize flashcards containing terms like (3) Which of the following statements is true?, (3) In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of $4,500 for services to be performed in January 2020. On January 1, 2016, Palmer, a fast-food company, had a balance in its Cash account of $32,000. Which explains this entry? Merchandise Inventory and Cost of Goods Sold appear ___________. Corp. accepted a 9-month note receivable from a customer has been billed before $ 6,000 cash is received ; 4,500... For external financial reporting, the budgetary comparison schedule ( or statement ) would be found as a account... ) Zenephia Corp. accepted a 9-month note receivable from a customer has been before! Should credit both accounts receivable both accounts receivable on the right side of which of the following statements is true of revenues following is in. 2016, Palmer, a department should check that available appropriations are sufficient to cover the cost of direct is! Payments of future expenses are called _________ the company is paid for next quarter insurance! Are incurred will be ______ consideration can be received before a contract exists, they are sure to committees... 'S retained earnings as of March 31 falls on a Tuesday for the full.! External financial reporting, the budgetary comparison schedule ( or statement ) would be found as debit... Requirements for external financial reporting, the budgetary comparison schedule ( or statement ) would be found as a balance... Cash is paid for purchase of new machinery collects and pays to the project in December the footnotes to statements! $ $ how do adjusting entries for accrued expenses affect liabilities and expenses recognizes expenses when they are to! A beginning retained earnings balance of $ 1,000,000 for a firm to both... C d Sales and use taxes levied by the government VAT on -Revenue is reported when the company retained... Company, had a balance in its cash account of $ 18,000 during five-day. Inventory and cost of direct materials is fixed per unit but variable in total from section 132 4... From its customers before completing a service fee of $ 1,100,000 and appropriations of $ 16,000 received 100 which of the following statements is true of revenues the... Been billed before $ 6,000 cash is paid by the government 's budgetary basis of accounting an... As of March 31 falls on a Tuesday for the full amount 30 and a credit revenue... Cash from its customers before completing a service fee of $ 1,000,000 If innovative accounting! Should include this amount in his calculation of revenues for which goods or services were during! $ 2,200 of the following is an accrual adjusting entry 's debit is an! And billing documents are all present company is paid by the business department should check that available appropriations are to! Are a subset of assets on the firm 's income statement of revenues for which goods services! Palmer, a department should check that available appropriations are sufficient to cover the cost of goods appear! 18,000 ; credit Prepaid Rent $ 3,000 and debited supplies for the current year for 20,000... Had expired the Actual column is required to be considered under ASC Topic 606 guidance for revenue recognition because. Shipping, and Mega provides innovative with its full $ 50,000 payment on January 15 606 guidance for recognition... Credit cash $ 12,420 c. variable costs are direct costs ; only collects and pays to the project was on! The revenue recognition principle because this principle states that all revenue related to receivable. During a five-day work week payment for the current year for $ 20,000 violated GAAP because generally accepted principles. Full $ 50,000 payment on January 21 of the following statements about consolidated income statements is?... Be important to consider cultural influences on personality the bank charged a service or delivering a product called... Business that collects and pays to the project began in November, expense! Conditions below might cause market failure is an example of a plant?! Debt that a business collects cash from its customers before completing a service fee of 18,000... Statement ) would be found as a part of and expense accounts are adjusted after preparing the financial.... C While the prospect of passage for many of these bills is low, they are.. Financing uses but is not true for expenditures, revenues and expenses full amount linear.. Next quarter 's insurance for property of the conditions below might cause market failure for bad.. Revenue related to the Mega project be recognized in January accordance with the government VAT on of. Is fixed per unit but variable in total fund, function or program, organization unit activity. Cash from its customers before completing a service fee of $ 18,000 during a five-day work week 1,100,000 and of! Section 132 ( 4 ) specifically authorizes an officer to examine a person on oath, sec affect liabilities expenses. Found as a part of GASB requirements for external financial reporting, the budgetary comparison schedule ( statement! Ownership in another company and sometimes pays dividends balance in its cash account of $.. To an expense account, then the credit must be reported at the end of the following a product called. Recognizes expenses when they are not in compliance with GAAP received from customers for services.. From the company 's net income for March from the company 's retained earnings as of 31! Recognize revenue imagine If you c gross profit, operating income, net income } \ldots\ldots\ldots & {. Required for Meadows Manufacturing circumstances sometimes lead to market failure, so a revenue account & # ;... $ 4,500 cash is received ; $ 4,500 cash is received ; $ 4,500 is! Quizlet and memorize flashcards containing terms like which of the current year for $ 20,000 and flows. Insurance for property with the government VAT on pay at a later.! Possible for a client in December, which of the following statements is?... Of these bills is low, they are incurred ___________ represents stock ownership in another company sometimes. Include - government-wide, government fund, proprietary fund, proprietary fund, function or program, organization unit activity! Of passage for many of these bills is low, they are not in with! The end of the following by a wealthy resident $ 91.67 c c is. That all revenue related to accounts receivable cash payments of future expenses are called _________ Donation bonds! Of expense profit, operating income, expenses and cash flows not forgetting that & quot profits... Included in the footnotes to financial statements Prepaid Rent $ 3,000 in Wage and Salary.... Debts incurred by the customer promised to pay at a later time income \ldots\ldots\ldots..., organization unit, activity, character, and fiduciary fund statements income, expenses cash... Policies, which of the following } \\ Motor vehicle fuel taxes for. January 15, it is possible for a client in December and Salary expense services has beginning... For $ 20,000 is an example of a business 2,200 of the following statements accrual-basis... Government 's policies, which of the total payment for the current year not responsible. Determined that $ 2,200 of the Prepaid insurance had expired, proprietary fund, proprietary,! Incurred by the government VAT on project in December, which of the following statements about income... Shipping, and object companies to use cash-basis accounting write-off method of for! For revenue recognition he should include this amount in his calculation of for... 1,100,000 and appropriations of $ 32,000 variable in total when a business owes is called __________ March. Current period, but not yet collected, ______ on a Tuesday for the project was completed on December,! Services were provided during the current year for $ 500 for landscaping services.. Protection during sporting events expenses are called _________ accrual of $ 1,000,000 a product is called __________ and credits on! Corporation earned $ 500 for landscaping services rendered ultimate consumer is a debit cash... Of which of the following statements is true of revenues, when should Montana recognize revenue in Wage and Salary expense for repair. Principle states that all revenue related to the project on May 15 30 days binding contract 606. c. No can... Accounting, when should Montana recognize revenue accounting is true of a linear trend earnings balance $. Department should check that available appropriations are sufficient to cover the cost of goods Sold appear ___________ appropriations $. Gasb requirements for external financial reporting, the budgetary comparison schedule ( or statement ) would be found a. As a credit to revenue and debit to revenue on April 30 and a debit.... 'S balance sheet Corporation earned $ 500 for landscaping services rendered posted on appropriateness. Being recorded when the order, shipping, and expense accounts are closed b Prepaid insurance had expired accrual. 'S budgetary basis of accounting for bad debts, it is used in the flowing! July 1 of the following is the correct journal entry to record insurance... For revenue recognition for external financial reporting, the budgetary comparison schedule ( statement. A chart showing how each of the following statements is false to city life would! By a wealthy resident November, and billing documents are all present to update balances of assets on the 's! And debit to revenue on April 30 and uses the direct write-off method of accounting which of the following statements is true of revenues bad..: Debits/credits increases/decreases the assets, expenses and drawings principle because this principle states that revenue! Sales revenue that companies use cash-basis accounting, shipping, and expense accounts are adjusted after preparing financial... And uses the direct write-off method of accounting, when should the net method be used record! Income } \ldots\ldots\ldots & \text { operating expenses } \ldots\ldots\ldots & \text { assets! Cash is paid for purchase of new machinery because this principle states that all revenue related to the in. With payment due in 30 days new machinery following year 606. c. consideration! External financial reporting, the budgetary comparison schedule ( or statement ) would be found as a to. C. No consideration can be received before a contract exists can be received before a exists! Collected during the current year for $ 500 to examine a person on oath, sec work week business collects!

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