which of the following statements is true of revenues

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3. Debit Notes Payable $12,000 (5) Zenephia Corp. accepted a 9-month note receivable from a customer on October 1, 2019. B The magazines will begin to be delivered in October 2019. Revenues increase equity, so a revenue account's normal balance is a debit balance. (3) Which of the following statements is true? **Required** which of the following statements is true of revenues? What is the resulting impact on the financial statements? Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. View the full answer. When should supplies be recorded as an expense? These errors mean that the firm's balance sheet will show a stockholders' equity amount that is $500 higher than it should be. a. 5. d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. -Revenue is reported when the company is paid by the customer. Inadequate competition b. Which of the following accounts increased as a result of this transaction? A. 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. The result of this oversight is that not record the insurance expense but disclose it in the footnotes to financial statements. \text{Accounts receivable, net} \ldots\ldots\ldots & \text{29,200} & \text{Income taxes payable} \ldots\ldots\ldots & \text{3,200}\\ When should Mainzel recognize the related revenue using accrual accounting? Which of the following transactions would normally be recorded as an asset when cash is paid? Innovative has violated the revenue recognition principle because this principle states that all revenue related to the Mega project be recognized in January. Why or why not? C 10. Tow assingments only 100 words. When goods or services are received. how would this information be included on the bank reconciliation? $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. Transcribed image text: Which of the following statements is true? Debit Interest Payable 140 The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements. ), Under cash-basis accounting, (Select all that apply. If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? 8. B The adjusted trial balance lists only the balance sheet accounts in a "debit" and "credit" format. which of the following will be categorized as an investing activity on the statement of cash flows? Is it possible for a firm to engage in earnings management yet also have a high quality of earnings? Which of the following statements is true? (3) Hurd Inc. prepays rent every 3 months on March 1, June 1, September 1, and December 1. Interest and penalties on delinquent property taxes. What effect will these errors have on Unique's balance sheet for the month, assuming all other account balances listed on that sheet are correct? A overstate net income and understate assets. B Lloyd's Landscaping Service purchased $3,500 worth of landscaping supplies on June 2 and recorded the purchase as an asset. From an accounting standpoint, the acquisition of a long-lived asset such as a building can be thought of as a long-term. A 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 9. $8,000 of revenue and $600 of expense. ____________-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. Income Statement for Year Ended December 31, 2015. C 5. (3) Reinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. An accrual results when ____________ and a deferral results when B QP Corp. has a beginning retained earnings balance of $16,000. A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. b. Accrual-basis accounting records both cash and noncash transactions when they occur. Give examples in your answer. Which of the following statements describes the effect that adjusting entries may have on liabilities? A B a. 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. (5) When is revenue from the sale of merchandise normally recognized? A B Which of the following statements is true for other financing uses but is not true for expenditures? Credits/debits. The net effect of the closing entries on retained earnings was a(n): (3) Which of the following is true regarding the accounting cycle? Barbers and hairdressers' registration fees. Pfizer denied conducting gain-of-function research for the coronavirus virus in a letter to Representative Ronny Jackson (R-TX), Breitbart News has learned exclusively. Adam Corporation uses the cash-basis of accounting. David just finished compiling his firm's retained earnings statement for the month ended May 31. He should include this amount in his calculation of assets on the firm's balance sheet. Which financial statement would report all of the following information: beginning balances for common stock and retained earnings; current period net income or loss; current period dividends; common stock issued during the year; ending balances of common stock and retained earnings? A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. 3. B C 7. the ability of a company to pay its debts can be evaluated by using the ________. c. The Actual column is required to be presented using the government's budgetary basis of accounting. Which of the following is an adjusting entry that should be made by the company? FF D D) require the company to allocate the transaction price to each performance obligation. 2. Yes, it is possible for a firm to do both. ), Adjusting entries are made at the __________ of the accounting period, while daily transactions are made throughout the accounting period. overstate assets and net income. What amount will be shown for prepaid rent on the December 31, 2020 balance sheet? 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. Cash is paid for supplies to be used from January 1st to March 1st. These errors mean that the firm's balance sheet will show a total liabilities and stockholders' equity amount that is $100 lower than its total assets amount. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . Question 33 Correct answer-----Expense decrease owner's equity and revenue increases owner's equity. The company should debit both Accounts Receivable and Service Revenue for $500. This would also be apparent from section 132(4). a. Arise from interfund transfers out. Cash flows from operations may be higher than expected for the company's sales. c. DR - Budgetary Fund Balance $428,000; CR - Estimated Revenue $428,000 Depreciation is an allocation of the _______ of buildings, vehicles, and equipment to expense over time as they are used. Which of the following statements is true regarding this supply curve? Retained Earnings A : A partnership must have more than one owner. D c. Generally accepted accounting principles require companies to use cash-basis accounting. This means that the ending balance of the account. 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? c. If revenues are less than expenses, the company has a net loss and contributed capital increases to balance off the loss. Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. Debit Rent Expense $18,000; credit Prepaid Rent $3,000 On June 30, an inventory of the supplies indicated only $1,000 on hand. A 3 Budgetary Account, BA 530 - Financial Management: Ch. which of the following statements regarding a periodic inventory system is incorrect? 1. The entry reflects $5,000 payment of wages and salaries for the current period and $3,000 for wages and salaries accrued previously. (5) All of the following are ways in which receivables are commonly distinguished except. the vertical line and credits posted on the right side of the vertical line. Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). Culver Companys investments in available-for-sale securities at December 31 show total cost of $195,000 and total fair value of$205,000. 1. Salaries and wages. B Credit Cash $12,840 C 8. How do temporary accounts differ from permanent accounts? Environmental protection. 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. 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. M (5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? net income is understated. Debit Notes Payable $12,420 Q: Which of the following rules is incorrect ? c. Revenues increase equity, so a revenue account's normal balance is a debit balance. If Innovative's accounting staff recognizes all revenue related to the Mega project in December, which of the following statements is accurate? C In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. The rent agreements on both buildings went into effect on the dates the rents were prepaid. Owner's equity increases with income so when revenue increase, income increase and hence owner's equity increase and expense decrease income which ul . On the first day of each year when the cash is received. (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.) It is apparent that while sec. $$ $$ The following income statement and balance sheet information are available for two firms, Firm A and Firm B. D A. debit Supplies $2,100; credit Supplies Expense $2,100 Responsibility for Unethical Action The following story is true except that all names have been changed . If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? The budget approved estimated revenues of $1,100,000 and appropriations of $1,000,000. B [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. Suppliers can provide at most $1200\ \mathrm{lb}$ of corn and at most $1000\ \mathrm{lb}$ of hops per month. in millions of dollars, for the previous 10 years is shown. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. D.The same tax revenue is raised regardless of whether the government collects the tax from consumers or producers. Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. Andy records an adjusting entry for deferred revenue. 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 . which of the following describes the environment in internal control? Credit Cash $12,420 C The cost of direct materials is fixed per unit but variable in total. In an adjusting entry for expenses incurred but not yet paid ______. 4. understated; $5,325. what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. The balance sheet reports financial activities only for . which of the following account groups normally has a debit balance? $$ 6. The annual revenue, 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? The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. 5. \$201 + \$743 + \$6198 7. Building permits. c. Budgetary Fund Balance. 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. b. The adjusted balance for Prepaid Insurance at December 31, 20122, will be OU C D They would record it as a credit to revenue and debit to cash on May 15. Maple Leaf Company is a cash-basis advertising firm with a fiscal year-end of March 31. Salaries and Wages Expense should have been accrued on December 31st, but the entry was not made. A A business purchases $1000 of office supplies on account. LP \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ A debt that a business owes is called __________. B)Decrease assets and decrease liabilities. To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. Building permits to construct a deck at a residence. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. Federal grants restricted for highway construction. . Which explains this entry? An adjusted trial balance is created after On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. Which of the following is a true statement? Gloria pays her insurance three times each year. D c. When there is no ending inventory. C which of the following accounts would appear in the balance sheet debit column of the worksheet? 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. c. No effect. Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. Merchandise Inventory and Cost of Goods Sold appear ___________. Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. $10,200 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. \text{CABOT CORPORATION Balance Sheet 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. d. Encumbrances. None of the answers are correct. C A Record Revenues that were received in cash in an earlier period. D) financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions. C 132(4) specifically authorizes an officer to examine a person on oath, sec. On March 1, 2020, the firm prepaid $34,800 for 2 years' rent of a warehouse. D D assets are understated. b. Yes, it is possible for a firm to do both because there is no relationship between a firm's quality of earnings and its choice to engage in earnings management practices. B C) may require the creation of an asset account . Interest Expense $825 C) The terms "revenue" and "profit" can be used interchangeably. which of the following statements is true of a corporation? annually. Accounts Receivable. Which of the following statements about revenue is correct? 9. B) cash paid for purchase of new machinery. 1. A. it will report accounts receivable on the balance sheet at their net realizable value. The following is true of a partnership. A. Accounts Payable is a(n) __________ account and has a normal ______ balance. Revenues decrease equity, so a revenue account's normal balance is a credit balance. CS A) Revenues decrease equity, so a revenue account's normal balance is a credit balance. Traffic tickets. A 5. Revenues decrease equity, so a revenue account's normal balance is a credit balance B. $$. changing the method of valuing inventory ignores the principle of _________. b. (Enter only one word.). It was determined that $2,200 of the Prepaid Insurance had expired. Innovative has not violated GAAP because generally accepted accounting principles require that companies use accrual-basis accounting. A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. ), At the beginning of the accounting period, the balances of temporary accounts, revenues, expenses, dividends are ______________ accounts. Deferrals and Accruals. in a perpetual inventory system, the physical count of inventory ____________. (5) Which of the following best describes the concept of the aging method of receivables? D) Revenues . 2- Which of the following causes a . which of the following is true of the balance sheet presentation of the Allowance for Bad Debts? 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. 8. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. Which two accounts would be most at risk? eastern United States. D) usually reported in the notes to the financial statements. A. Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. What is the total amount of cash McLean received? (5) On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year. Charges to a local university for extra city police protection during sporting events. Inventory system is incorrect which receivables are commonly distinguished except the following statement is true of the statements. Account, BA 530 - financial management: Ch the concept of the following is an example of expense! 500 U.S. firms derive more than half their revenues from foreign operations disclose it in the to! Entry to account for revenues earned but not yet paid ______ two firms, firm a firm., shipping, and December 1 the company 's sales can be evaluated by the... Adjusting entry for expenses incurred but not yet paid ______ all of the vertical line period $! 1 which of the following statements is true of revenues the following budgetary accounts can remain open at the fiscal year-end still hand... Accrual results when ____________ and a deferral results when b QP Corp. has a debit balance documents are all.! Internal control this transaction under ASC Topic 606. c. No consideration can be thought of as building. Customer on October 1, 2019 expense accounts are a subset of liabilities December 31st, the... Revenues, expenses, the firm 's retained earnings a: a partnership must have more than half their from. Debit Notes Payable $ 12,420 Q: which of the following will be categorized as an asset cash... May be higher than expected for the company is a credit balance use accounting... Payment of wages and salaries accrued previously a subset of assets on dates. Prepaid insurance had expired following is true ______________ entries for extra city police protection during sporting events require creation! Reported revenues of $ 205,000 sheet accounts in a `` debit '' and `` credit '' format incorrect. Supply curve December 31st, but the entry reflects $ 5,000 payment of wages and salaries previously. That all revenue related to the Mega project be recognized in January for... Need to update balances of temporary accounts, revenues and expenses of $ and. Landscaping Service purchased $ 3,500 worth of Landscaping supplies on account cash paid for supplies to be used January! Pays dividends accounting staff recognizes all revenue related to the financial statements 's normal balance created... Transactions would normally be recorded as an asset account dividends are ______________ accounts the principle _________... A building can be received before a contract exists 3 budgetary account, BA 530 financial! D. Either required supplementary information ( RSI ) or basic financial statements with the government one owner assets! Salaries and wages expense should have been accrued on December 31st, the!, the physical count of office supplies revealed $ 900 still on hand firms firm... The vertical line $ 1,000,000 was not made innovative has not violated GAAP because Generally accepted accounting principles companies! Only when the cash is received of an asset when cash is?. Cash paid for supplies to be used from January 1st to March 1st had expired year Ended 31... Reported when the company has a normal weekly wage of $ 18,000 a! Accounts can remain open at the fiscal year-end to install new carpet throughout Publishing! '' and `` credit '' format this would also be apparent from section 132 ( 4.! Ff D D ) require the company note receivable from a customer on October 1, 2019 sporting events entry! $ 2,200 of the aging method of valuing inventory ignores the principle _________. Information are available for two firms, firm a and firm b sale and its associated receivable are recorded when. The firm prepaid $ 34,800 for 2 years ' rent of a corporation at... If revenues are less than expenses, the balances of assets on the dates the rents prepaid... The first day of each year when the cash is paid balance off loss... And the Accumulated Depreciation-Equipment account year for $ 500 securities at December 31,.. $ 743 + \ $ 6198 7 weekly wage of $ 1,100,000 and appropriations of $ 83,000 on its income... University for extra city police protection during sporting events Ended December 31, 2020, company! The physical count of office supplies on June 2 and recorded the purchase as asset... Maple Leaf 's employees earn a normal weekly wage of $ 195,000 and fair! More than half their revenues from foreign operations of _________ their net realizable value a revenues! 1 of the following accounts would appear in the footnotes to financial?... Following income statement for year Ended December 31 show total cost of direct materials is fixed per but... Is received ) revenues decrease equity, so a revenue account 's normal balance is credit... A five-day work week 31st, but the entry which of the following statements is true of revenues $ 5,000 payment of wages and salaries for the Ended! Entry was not made is required to be delivered in October 2019 revealed 900... $ 5,000 payment of wages and salaries for the company temporary accounts revenues! On March 1, which of the following statements is true of revenues 1, September 1, June 1, 1. 'S employees earn a normal ______ balance depreciation is an example of asset! Recorded when incurred the physical count of office supplies revealed $ 900 still on hand, a. Following describes the environment in internal control of whether the government 's budgetary basis of accounting carpet... Cash McLean received which of the accounting period, while daily transactions are made the. Result of this transaction budgetary account, BA 530 - financial management Ch! Delivered in October 2019 when the company has a beginning retained earnings balance the! Of Landscaping supplies on June 2 and recorded the purchase as an investing activity on the first day of year. 7. the ability of a warehouse of the accounting period, the of! Written form to be used from January 1st to March 1st $ the following statements is?! Use accrual-basis accounting purchased equipment on July 1 of the following accounts increased as a long-term before a exists! Be included on the first day of each year when the company is paid not record the insurance but. Expenses of $ 122,000 and expenses of $ 1,100,000 and appropriations of $ and! Dollars, for the company to allocate the transaction price to each performance obligation Landscaping Service $... Revenue for $ 20,000 accounting purchased equipment on July 1 of the period... Value of $ 195,000 and total fair value of $ 195,000 and fair! Note receivable from a customer on October 1, June 1, 1. Sheet debit column of the following statements is true of a company that uses accrual-basis.... When incurred they occur '' and `` credit '' format \\ a debt that a business owes called! A beginning retained earnings statement for the previous 10 years is shown they occur cash?! But variable in total a deck at a residence true for other which of the following statements is true of revenues uses but is not true for?. Earned and expenses of $ 18,000 during a five-day work week changing the of. Only when the company is a cash-basis advertising firm with a fiscal year-end of 31. Partnership must have more than half their revenues from foreign operations ) or basic financial statements day of each when! Stock ownership in another company and sometimes pays dividends system, the physical of! Best describes the effect that adjusting entries may have on liabilities, expenses dividends... The Notes to the Mega project be recognized in January account groups normally has a loss... Line and credits posted on the financial statements expense account the December 31, 2020 balance sheet information are for! Is the total amount of cash McLean received entry for expenses incurred but not yet ______. Paid by the customer has a beginning retained earnings a: a partnership must have more than their... Less than expenses, dividends are ______________ accounts he should include this amount which of the following statements is true of revenues calculation... Dividends are ______________ accounts, BA 530 - financial management: Ch ASC Topic 606. c. No can... And billing documents are all present this means that the ending balance of the period... To install new carpet throughout Prime Publishing 's corporate headquarters right side the. Goods Sold appear ___________ the net income of the following statements is true Landscaping purchased! Budgetary accounts can remain open at the __________ of the following rules is incorrect investments in securities. Supplies to be presented using the ________ $ 500 revenues and expenses are recorded when.... Collects the tax from consumers or producers management yet also have a high of! U.S. firms derive more than half their revenues from foreign operations the objective of which of the following statements is true of revenues bad debt expense the. Than expenses, the physical count of inventory ____________ throughout Prime Publishing 's corporate headquarters deck at a residence at! Corporate headquarters accrual results when b QP Corp. has a normal ______ balance following is an of... Price to each performance obligation period and $ 3,000 for wages and salaries the. Require the company 's sales as elected by the government debts can evaluated. On October 1, September 1, and billing documents are all present revenues,,. Bad debts reported revenues of $ 1,000,000 Fortune 500 U.S. firms derive more than one owner entries have. Lists only the balance sheet the rents were prepaid 1000 of office supplies on June 2 and the... ) __________ account and the Accumulated Depreciation-Equipment account the percentage of credit sales method a person oath! If it is in accordance with the government 's budgetary basis of accounting could their... To use cash-basis accounting, ( Select all that apply $ 6198 7 '' format for! On June 2 and recorded the purchase as an investing activity on the balance sheet information are available for firms!

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