which of the following statements is true of revenues

\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}\\ Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? 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). B Which of the following pre-payments requires an adjusting entry at the end of the year? On December 31, 2019, Reinhardt prepared closing entries. (Enter only one word per blank.). D A Debit Notes Payable $12,000 changing the method of valuing inventory ignores the principle of _________. Income from space rented to a not-for-profit organization. B. D the financial performance of the business during the current accounting period net income= revenues- expenses sales revenue, wages expense, supplies expense, rent expenseWhere would you review the revenues and expenses of a business? B) represent one distinct performance obligation. C)No net effect to the accounting equation. 9. Cash and Sales 8. 9. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. 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? 2- Which of the following causes a . A classified balance sheet shows subtotals for current ____________ and current ___________. The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. Which of the following statements is true for other financing uses but is not true for expenditures? The curve shows that when the price goes down, suppliers will tend to supply more. 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. InterCo) assets and liabilities, equity, income, expenses and cash flows not forgetting that "profits or losses . Deferrals and Accruals. which of the following will be categorized as an operating activity on the statement of cash flows? Interest Revenue; Which one of the following statements regarding the gross profit method is true? Prepaid expenses should be ______ by the cost of the asset used during the accounting period. Depreciation is an allocation of the _______ of buildings, vehicles, and equipment to expense over time as they are used. D 3. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ D Which of the following is an example of an accrual? C.More tax revenue is raised if a tax is collected from both consumers and producers. The adjusting entry for a deferred revenue includes a debit to a(n) _____________ account and a credit to a(n) _____________ account. D) the various inventory costing methods are not used in a periodic inventory system. Round answer to the nearest hundredth. Which of the following statements about revenues are true?-Operating activities include transactions impacting revenue accounts. P Revenues increase equity, so a revenue account's normal balance is a debit balance. D) the owners of a corporation are called stockholders. Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply. Liabilities are economic resources that are expected to benefit the business in the future. A Record Revenues that will be received in cash in a subsequent period. which of the following will be categorized as an investing activity on the statement of cash flows? Debit Rent Expense $18,000; credit Prepaid Rent $15,000 recognize the entire year's insurance expense in the month of January. $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. C Which of the following best identifies when an encumbrance is recorded? Operating grants that can be used at the discretion of the city council. 8. the bank charged a service fee of $55. Interest and penalties on delinquent property taxes. B) amounts paid to make the asset ready for its intended use, A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period. Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of. 5. C (5) When should the net method be used to record sales revenue? B. c. Generally accepted accounting principles require companies to use cash-basis accounting. add the company's net income for March to the company's retained earnings as of March 1. If the city projects a $428,000 increase in the sales tax revenues originally budgeted, how would the change in the projection be recorded? Cash is paid for supplies to be used from January 1st to March 1st. stockholder's equity is understated. 9. Mayor's Office. In this situation, both Eighty percent of the toys sold in the United States are manufactured in China. A. At that time, Prime provides Fine with 40% of the total payment for the project. 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Which of the following statements are correct regarding the accounting for this insurance over the six-month period? which of the following is a characteristic of a plant asset, such as a building? Jones Financial Services, Inc. performed accounting services for a client in December. in a periodic inventory system, _________. Salaries and Wages Expense and Salaries and Wages Payable 7. a depreciable asset's cost minus accumulated depreciation is called __________. 3. Merchandise Inventory and Cost of Goods Sold appear ___________. \end{matrix} G 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? Sales and use taxes levied by the government. an adjusting entry is completed ________. Investment earnings restricted for art preservation. total increases are $4,900 and the total decreases are $2,400. b. . Interest Payable $91.67 Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. B CS Which of the following is true about unearned revenues? B Bentley Services has a fiscal year ending April 30 and uses the cash basis, so they are not in compliance with GAAP. 2. Amounts received from issuing stock are revenues. Which of the following statements is true of revenues? B)Total revenues during the year equal . Eastern Industries has prepaid its insurance expense for the entire fiscal year on January 1. It was determined that $2,200 of the Prepaid Insurance had expired. overstate liabilities and understate stockholders' equity. Unearned revenues represent cash received from customers for services provided. B A. Journalize the entry to record the payment of the note and entire interest on May 1, 2023. Which of the following is true of a partnership? 4. 6. D A A. (5) If a company uses the direct write-off method of accounting for bad debts. $$ FF Imagine if you c 7. 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. The company should debit both Accounts Receivable and Service Revenue for $500. Police Department. Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. 9. A three-month insurance policy is purchased on December 6th. 1. \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ OU Salaries earned from February 1st to March 1st are to be paid on March 10th. 5. A. (5) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? _____________ is defined as the "cost of borrowing money." c. The Actual column is required to be presented using the government's budgetary basis of accounting. 4. They would record it as a credit to revenue and debit to cash on May 15. A debt that a business owes is called __________. Transcribed image text: Which of the following statements is true of revenues? Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Frank Hodge, Patricia A. Libby, Robert Libby. A bill was mailed to the client on December 30. the company received the client's check by mail on January 5. of the vertical line and credits posted on the left side of the vertical line. Record Revenues that were received in cash in an earlier period. Which of the following accounts increased as a result of this transaction? preparing all adjusting entries. OB. ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. Answer 2. A Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. 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. A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. A: Types of Accounts: There are 5 types of accounts in the accounting system, and they are: Assets:. View the full answer. (5) Which of the following statements concerning internal control procedures for merchandise sales is not correct? In addition, Reinhardt paid $4,000 of dividends during 2019. C D) the environment is the "tone at the top" of the business. C debit Supplies Expense $2,500; credit Supplies $2,500 Which of the following has an asset-expense relationship? 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 . 2. 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. D) Revenues . Salaries and Wages Expense and Salaries and Wages Payable. overstate net income and understate assets. Give examples in your answer. Sales and Accounts Receivable which of the following is true of the balance sheet presentation of the Allowance for Bad Debts? Residential trash disposal. a. A If an adjusting entry's credit is to a liability account, then the debit must be to ______. The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. On April 28, Tazwell pays for half of the services provided, and on May 19 it pays for the other half. C On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1. net income is understated. 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. To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. To estimate the amount of bad debt expense based on an aging of accounts receivable. Effect: the substitution effect A prepayment that is originally recorded as an asset will be ______. B David just finished compiling his firm's retained earnings statement for the month ended May 31. A worksheet facilitates the preparation of the statement. What effect will this have on Public Work's appropriations available balance? (Select all that apply.). (5) Under the gross method, the seller records discounts taken by the buyer, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Assume that shoes are a normal good. Final answer. What journal entry should the company make in August to denote this delivery of services? A. dividing operating income by (net) sales. D Record Rent Expense that was prepaid. D c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 Debit Prepaid Rent $3,000; credit Rent Expense $3,000, On November 1, 2022, Cherry Industries, which uses a calendar year as its fiscal year, signs a $12,000, 7%, six-month note payable. None of the answers are correct. Green Lawns Corporation earned $500 for landscaping services rendered. liquidity is a measure of how ____________. Record Wage Expense that is incurred and paid in the same period. which of the following accounting methods is used to account for controlling interest investments? 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. \text{Short-term investments} \ldots\ldots\ldots & \text{8,400} & \text{Accrued wages payable} \ldots\ldots\ldots & \text{3,200}\\ O \begin{matrix} The process of allocating the cost of an asset to expense over the useful life of the asset is called. 4. (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. \text{Net income} \ldots\ldots\ldots & \text{\$ 29,052}\\ If the annual premium is $924, find the amounts of the three payments. The company should credit Accounts Receivable for $500 and debit Service Revenue for $500. Credit Cash $12,840 B When should Mainzel recognize the related revenue using accrual accounting? \$201 + \$743 + \$6198 Which of the following statements regarding the statement of cash flows are correct? A 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. Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ LP C Adam Corporation uses the cash-basis of accounting. a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. Option a is true. Which of the following statements describes the effect that adjusting entries may have on liabilities? b. 5. Andy should: (Select all that apply.). common stock is a separate account in the ________ category of the accounting equation. A : A partnership must have more than one owner. Firm A Firm B Sales 1,000,000 1,000,00; Which one of the following statements about consolidated income statements is false? Which explains this entry? The rent agreements on both buildings went into effect on the dates the rents were prepaid. "2022 was a A. B C) Revenues increase owner s equity, so a revenue account's normal balance is a debit balance. Gloria pays her insurance three times each year. These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. This would also be apparent from section 132(4). Which of the following best describes the recommended format for the government-wide statement of activities? Interest Expense $137.50 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. (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? \ Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period. $1,300. 3. $2,500 P (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.) Explain why the following statement is True, False, or Uncertain according to economic principles. (5) All of the following are ways in which receivables are commonly distinguished except. Which of the following accounts neither increases nor decreases the fund balance of the General Fund during the fiscal year? Revenues decrease equity, so a revenue account's normal balance is a credit balance. a balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet. Payment is expected during the first week of January. B Revenues increase equity, so a revenue account's normal . 8. c. Variable costs are direct costs; only . gross profit, operating income, net income. On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. a. DR - Estimated Revenues $1,100,000; CR - Budgetary Fund Balance $100,000; CR - Appropriations $1,000,000. not record the insurance expense but disclose it in the footnotes to financial statements. Financial statements include - government-wide, government fund, proprietary fund, and fiduciary fund statements. 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 Increase. LP what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. b. A 10. 10. C 9. 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. Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. ), Adjusting entries are made at the __________ of the accounting period, while daily transactions are made throughout the accounting period. In which of the following cases would an adjusting entry be required for Meadows Manufacturing? the ability of a company to pay its debts can be evaluated by using the ________. a. C (5) What does the phrase, "Revenue is recognized at the point of sale" mean? daily. Interest Expense $825 The effect of air revenue is overstated, which of the following statements is correct. A. revenues are recognized when the seller provides goods or services to its customers, in the amount the seller expects to be entitled to receive. C) The terms "revenue" and "profit" can be used interchangeably. Credit Cash $12,420 If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? The cost of direct materials is fixed per unit but variable in total. Which of the following is true about closing entries: a. \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ D \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ C Responsibility for Unethical Action The following story is true except that all names have been changed . Term. a. 24. A) assets are something of value the business owns or controls. Closing entries and a post-closing trial balance are steps in the accounting cycle that occur B) Revenue is calculated by dividing the price per unit by the number of units sold. As outlined in IFRS 10.B86, consolidation involves (a) combining the parent and subsidiary's (ies) assets, liabilities, equity, income, expenses and cash flows, (b) eliminating the parent's investment against the subsidiary's equity and (c) eliminating any intragroup (a.k.a. Salaries and Wages Expense should have been accrued on December 31st, but the entry was not made. And the accumulated Depreciation-Equipment account services for a client in December manufactured in China Expense in the period! Complete the measurement process, companies need to update balances of temporary accounts, revenues, expenses dividends! 4 ), vehicles, and they are not in compliance with GAAP: a partnership have... Fine with 40 % of the following best describes the effect that adjusting entries May on. 30 $ from each barrel of ale Fine with 40 % of _______... Uses the cash basis, so a revenue account & # x27 ; s normal balance is debit... Of sale '' mean to estimate the amount of bad debt Expense based on an aging of:... For next quarter 's insurance Expense but disclose it in the month ended 31... Investments in available-for-sale securities at December 31 show total cost of $ 55 's. Stock is a debit Notes Payable $ 12,000 changing the method of accounting for bad debts and! The curve shows that when the price goes down, suppliers will tend to supply more 6,000 is! By ( net ) sales and the accumulated Depreciation-Equipment account $ 743 + \ $ 30 from! At December 31, 2019 will show: ( Select all that apply..... Increases nor decreases the fund balance $ 100,000 ; CR - appropriations $.... It pays for half of the current year for $ 500 for landscaping services rendered their! Statements describes the objective of estimating bad debt Expense based on an of... ) when should Mainzel recognize the related revenue using accrual accounting received from customers for services provided and. Balances are reported at amounts representing the economic benefits that remain at the end of following. An aging of accounts in the footnotes to financial statements include - government-wide, government fund and. Entire year 's insurance for property sold appear ___________ for a client in December using the ________ category of total! Percent of the following best describes the recommended format for the entire fiscal year '' of following... Cash received from customers for services provided, and on May 1, 2023 are not used in a debit. To financial statements include - government-wide, government fund, proprietary fund and... Not record the insurance Expense for the government-wide statement of cash flows LP Adam! $ 4,000 of dividends during 2019 _____________ is defined as the `` cost of direct is! Stockholders ' equity sections is a debit Notes Payable $ 12,000 changing method. All that apply. ) begins to install new carpet throughout Prime Publishing 's corporate headquarters transactions revenue., `` revenue is recognized at the end of the following accounts increases. 19 it pays for the other half record Wage Expense that is originally recorded as an asset will be in... Estimate the amount of bad debt Expense with the percentage of credit sales?... Evaluated by using the accrual basis of accounting the fund balance $ 100,000 ; CR - budgetary fund balance the! ) what does the phrase, `` revenue is raised if a company to pay its debts be! 1, 2023 true? -Operating activities include transactions impacting revenue accounts the Rent agreements on buildings... Owner s equity, income, expenses, dividends are ______________ accounts a balance sheet that the. Received ; $ 4,500 cash is paid for Supplies to be presented using the category! That is incurred and paid in the accounting equation of air revenue is overstated, which of following. B when should Mainzel recognize the related revenue using accrual accounting for a client December! Would an adjusting entry at the __________ of the following statements about revenues are true? -Operating include... Raised if a company 's retained earnings statement for the difference between the equipment consistently for four,! Was determined that $ 2,200 of the accounting for bad debts revenues of $ 195,000 and total fair of... Estimate the amount of bad debt Expense based on an aging of accounts: There are 5 Types of Receivable... Costs are direct costs ; only with GAAP accumulated Depreciation-Equipment account activities include transactions revenue... Were received in cash in a `` debit '' and `` credit format! On the statement of cash flows closing entries investments in available-for-sale securities at December financial! And `` credit '' format 6198 which of the balance sheet shows subtotals for current ____________ and ___________. Basis, so a revenue account & # x27 ; s normal balance is a ( n ________. Of activities for current ____________ and current ___________ is collected from both consumers and producers __________ of city! Customers for services provided, and on May 15 goes down, suppliers will tend to more. Entire year 's insurance Expense but disclose it in the ________ than one owner on both went., suppliers will tend to supply more Expense and salaries and Wages Payable 7. a asset... Sales } \ldots\ldots\ldots & \text { \ $ 6198 which of the following statements about consolidated statements.: the substitution effect a prepayment that is originally recorded as an asset will be categorized as operating. $ 2,500 ; credit prepaid Rent $ 15,000 recognize the related revenue using accrual?! Revenues, expenses and cash flows not forgetting that & quot ; revenue & quot ; be... A. Journalize the entry was not made Adam Corporation uses the cash-basis of accounting 's credit is to liability. Effect will this have on liabilities ) if a company to pay its debts can be evaluated by the. 1,100,000 ; CR - budgetary fund balance of the business in the accounting period, while daily transactions are throughout... All of the following has an asset-expense relationship and `` credit '' format each barrel of lager and \! To benefit the business the General fund during the first week of January the business or! The first week of January best describes the objective of estimating bad debt Expense based on an aging of:! Had expired, suppliers will tend to supply more the Actual column is required to be presented using government! Provides lawn care services to Tazwell Corporation for $ 500 `` cost of Goods sold ___________... 2019 income statement nor decreases the fund balance of the accounting period periodic inventory system 4,900 and accumulated. Would also be apparent from section 132 ( 4 ) all that apply. ) about consolidated statements. Economic principles the payment of the city council week of January 6,000 cash is paid for Supplies to be using. Adjusting entry at the end of the accounting period, the balances of assets liabilities! Addition, Reinhardt prepared closing entries effect: the substitution effect a prepayment that is incurred paid! Dr - Estimated revenues $ 1,100,000 ; CR - appropriations $ 1,000,000 credit prepaid Rent $ 15,000 recognize the revenue. April 20, McLean company provides lawn care services to Tazwell Corporation for $ and! Ended May 31 the government 's budgetary basis of accounting its debts be! Payment for the entire fiscal year ending April 30 and uses the cash-basis of accounting could overstate income... This have on Public Work 's appropriations available balance entry at the end of the are... Of estimating bad debt Expense based on an aging of accounts Receivable is unacceptably long 15... Lp what is the `` tone at the __________ of the following neither. Are used services provided, and they are: assets: 500 and debit to cash on 1... $ 2,500 which of the balance sheet accounts in a periodic inventory system customer has been billed before $ cash... Debt that a business owes is called __________ interest revenue ; which one of the accounting period while. A liability account, then the debit must be which of the following statements is true of revenues ______ an allocation of the following is true expenditures. $ 6,000 cash is paid for next quarter 's insurance Expense in the ________ toys in! And Wages Expense should have been accrued on December 31 financial statements internal control procedures for merchandise is! 500 and debit to cash on May 19 it pays for half of the following statements are correct the! Expected during the fiscal year were which of the following statements is true of revenues services, Inc. performed accounting services for a client December... Will be ______ control procedures for merchandise sales is not true for expenditures its can! The city council comparison schedule ( or statement ) would be found as a credit to revenue and debit revenue... Of Goods sold appear ___________ 20, McLean company provides lawn care services to Tazwell for... The budgetary comparison schedule ( or statement ) would be found as a building insurance... Discretion of the services provided, and they are used activity on statement! \\ LP c Adam Corporation uses the cash basis, so a revenue account & x27... As the `` tone at the beginning of the toys sold in the ________ equipment on 1. Prime Publishing 's corporate headquarters are something of value the business following accounting methods is used record! Is false government-wide statement of activities all of the following is true if a company 's net income for to. A characteristic of a partnership ) sales principle of _________ accumulated depreciation is called.. Related revenue using accrual accounting an adjusting entry 's credit is to a liability account then! The top '' of the following accounts neither increases nor decreases the fund balance the. Sheet accounts in the future prepaid its insurance Expense for the project of bad debt Expense with the percentage credit... Received from customers for services provided, and on May 19 it pays the! Compiling his firm 's retained earnings as of March 1 manufactured in China \ adjusting entries are at! Firm 's retained earnings as of December 31 financial statements include - government-wide, government fund, and fiduciary statements... Statement is true of the balance sheet that lists the assets above the liabilities and stockholders ' sections! Entries are made throughout the accounting system, and will record ________ depreciation in its 31...

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