(5) Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? A debt that a business owes is called __________. Debit Rent Expense $3,000; credit Prepaid Rent $3,000 If an adjusting entry's debit is to an expense account, then the credit must be to which of the following? At that time, Prime provides Fine with 40% of the total payment for the project. 7. Which of the following is true of a partnership? D which of the following accounting methods is used to account for controlling interest investments? 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. Prepare the adjusting entry. If a company spends $12 million dollars for a warehouse, when should the cost be written off? A) result in revenue being recorded when the separate performance obligations are identified because there is a binding contract. \text{Cash}\ldots\ldots\ldots & \text{\$ 10,000} & \text{Accounts payable} & \text{\$ 17,500}\\ It was determined that $2,200 of the Prepaid Insurance had expired. Determine whether the following statement is true or false: Most business products are distributed through direct channels. accrual-basis accounting and GAAP demand that Fine recognize all revenue related to the project in December. Transcribed image text: Which of the following statements is true? 10. CS B) cash paid for purchase of new machinery. The entry is an accrual of $3,000 and deferral of $5,000. d. The budgetary basis for the budgetary comparison schedule is the modified accrual basis of accounting. which of the following assets must be reported at the lower-of-cost-or-market value? Liabilities are economic resources that are expected to benefit the business in the future. B Accrual-basis accounting follows the fiscal year assumption. c. Expenses minus program revenues equals net (expense) revenue. ), Adjusting entries: (Select all that apply.). debit Supplies Expense $2,500; credit Supplies $2,500 D A C B In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______. The tuition and mandatory fees category includes all tuition and fees (net of refunds, bad debt estimates, and any discounts recognized) assessed for educational purposes. B Answer is C Revenue increase equity, so a revenue account's normal ba . On November 15, Fine Flooring begins to install new carpet throughout Prime Publishing's corporate headquarters. The balance sheet reports financial activities only for . I 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. 10. debit Supplies $2,100; credit Supplies Expense $2,100 Record Revenues that were received in cash in an earlier period. net income is understated. \ Cash and Sales. Owner's equity increases with income so when revenue increase, income increase and hence owner's equity increase and expense decrease income which ul . \text{Income before taxes} \ldots\ldots\ldots & \text{48,650}\\ Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? 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OU Which explains this entry? None of the answers are correct. Which of the following is the correct journal entry to record the budget? Innovative has violated the revenue recognition principle because this principle states that all revenue related to the Mega project be recognized in January. Which of the following statements is true? (Enter only one word. I, A508 Govt & Nonprofit Ch. $1,300. \text{Cost of goods sold} \ldots\ldots\ldots & \text{297,250}\\ a. B Fill in your Name and Click on the Next button to start Billing mock Test Inadequate competition b. Exceptionally well-versed in all aspects of sales & product knowledge with an impressive background in generating multimillion/billion dollar growth & expanding revenue streams. Gift for the purchase of new playground equipment. A. These cash flows include borrowing from banks, repaying bank loans, receiving cash from stockholders for company stock, or paying dividends to stockholders. Term. A) on the balance sheet and income statement, respectively. D When there is no beginning inventory. which of the following statements is incorrect? A Income statement accounts are temporary accounts, while balance sheet accounts are permanent accounts. Although not true revenues, sections are also included for: J. Interdepartmental Revenues K. External Organization Income . Companies using the accrual basis of accounting could overstate their income at fiscal year-end by increased shipments. 1. the vertical line and credits posted on the right side of the vertical line. A. Federal grants restricted for highway construction. c. Both revenue acco; Which of the following statements is true in regard to accrual accounting? As a result of operations, Maple Leaf's net income for the most recent fiscal year will be ________ by \text{Total assets} \ldots\ldots\ldots & \text{\$240,200}\\ Comment on the appropriateness of a linear trend. In fact, any attempts to engage in earnings management practices of any kind automatically decrease a firm's quality of earnings. Which of the following accounts from a firm's adjusted trial balance would need to be considered when compiling the firm's income statement? . Debit Interest Expense 420 principal amount plus interest due at maturity. overstated; $1,725. C The answer is A. Debits increase the capital account . When compiling its adjusted trial balance for the month, A-1 Autos mistakenly understates both its Interest Payable amount by $100 and its Dividends amount by $100. Accounts Receivable. The entry reflects total wage and salary expense this period of $8,000. C Under cash-basis accounting, revenues are recorded when earned and expenses are recorded when incurred. c. When there is no ending inventory. (3) Dallas Company loaned $10,000 to Ewing Company on December 1, 2019. 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. 8. To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for ______________ entries. 9. (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. C) Revenues increase equity, so a revenue account's normal balance is a debit balance. 6. At the end of the year, merchandise inventory was overstated. (5) On April 20, McLean Company provides lawn care services to Tazwell Corporation for $3,000 with terms 1/10, n/30. \end{matrix} 2. debit Supplies $2,500; credit Supplies Expense $2,500. On August 1, 2019, a firm prepaid $53,520 for 2 years' rent of an office building. QP Corp. has a beginning retained earnings balance of $16,000. 4. b. D b. DR - Estimated Revenue $428,000; CR - Budgetary Fund Balance $428,000 D (3) Which transaction would require adjustment at December 31? Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. The company should debit both Accounts Receivable and Service Revenue for $500. C B The rent agreements on both buildings went into effect on the dates the rents were prepaid. Residential trash disposal. At the end of the year budget and permanent accounts are closed b. C no journal entries are required for the reconciling items on the bank side because ___________. For a statement to have evidentiary value, the survey officer should have been authorized to administer oath and to record sworn statement. D E.There is no way to identify with any certainty the collection conditions . Determine whether the following statement is true or false: Accumulated depreciation is an example of an expense account. If Zenephia has an accounting period which ends on December 31, 2019, when would it most likely recognize interest income from the note? Expert Answer. C debit Supplies $1,000; credit Supplies Expense $1,000 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? 3. The Variance column is required. C Which of the following statements about accrual-basis accounting is true? A) Revenue is the total amount received for selling a good or service. \text{CABOT CORPORATION Income Statement For Year Ended December 31, 2017}\\ The gross profit method is a complicated method to use in practice. (3) Which of the following statements is true? A \begin{matrix} The adjusted balance for Prepaid Insurance at December 31, 20122, will be what is the term used for the difference between the Equipment account and the Accumulated Depreciation-Equipment account. forecast revenue. 7. overstate net income and understate assets. What adjusting entry should be made on June 30? Supplies should be ______ and Supplies Expense should be ______ for the cost of supplies used up during the period. If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? A. Profits are $\$ 35$ from each barrel of lager and $\$ 30$ from each barrel of ale. Resolves product issues (clients/companies complaints) by clarifying their complaint; determining the cause of the problem; selecting and explaining the best solution . Which of the following statements is true of revenues? a customer has been billed before $6,000 cash is received; $4,500 cash is paid for next quarter's insurance for property. C Why or why not? A M If one of these light bulbs is selected at random, find the probability that the light bulb is: (a) Good; (b) Good, given that it is 606060 watts; ( c ) defective, given that it is not 303030 watts. Fund, function or program, organization unit, activity, character, and object. B : In the United States, partnerships produce five times the revenue of corporations. \text{Sales} \ldots\ldots\ldots & \text{\$448,600}\\ Using a very aggressive marketing strategy they have been able to increase their annual revenue by approximately $\$10$ million over the past 10 years. B common stock is a separate account in the ________ category of the accounting equation. Debit Rent Expense $18,000; credit Prepaid Rent $3,000 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? : 11 The seven-syllable Catholepistemiad was a mish-mash of Latin and . The project was completed on December 31 with payment due in 30 days. 2. $$ B Which of the following transactions would normally be recorded as an asset when cash is paid? D.The same tax revenue is raised regardless of whether the government collects the tax from consumers or producers. Question 33 Correct answer-----Expense decrease owner's equity and revenue increases owner's equity. Minefield will pay for each year of services on the first day of each service year, starting with September 1, 2019. assets are understated. c. The Actual column is required to be presented using the government's budgetary basis of accounting. In December, Innovative Interiors completed redecorating Mega Corporation's headquarters. This means that the ending balance of the account. If dividends for the year were $1,800, determine the ending retained earnings balance for the year. Decrease. 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. d. When goods or services are ordered. On the first day of each year when the cash is received. On January 1, 2016, Palmer, a fast-food company, had a balance in its Cash account of $32,000. The following is true of a partnership. Barbers and hairdressers' registration fees. Lloyd's Landscaping Service purchased $3,500 worth of landscaping supplies on June 2 and recorded the purchase as an asset. OU 9. Then solve it using the simplex method. A. . A. 4. Rent for the 3 months totals $3,600. P Credit Cash $12,420 A 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}\\ Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities. Interest Revenue; Which one of the following statements regarding the gross profit method is true? B)Decrease assets and decrease liabilities. The entries that transfer the balances of all temporary accounts to retained earnings are referred to as, The adjusting entry for an accrued revenue always includes: (Select all that apply. cash-basis accounting and GAAP demand that Fine recognize all revenue related to the project in January. 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. (Select all that apply. View the full answer. liabilities are understated. 6. after closing entries have been posted ____________. Maple Leaf's employees earn a normal weekly wage of $18,000 during a five-day work week. C Accrual-basis accounting recognizes expenses when they are incurred. Taggert Company paid $1,800 for a 6-month insurance premium on December 1. 2. ____________-basis accounting helps measure and report revenues and expenses in a way that clearly represents the net income of the company. The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as. $0. 33) Which of the following statements is true of revenues? (5) Food To Go is a local catering service. Police Department. OB. Which of the following is an example of a deferral? increases are $7,400 and the total decreases are $4,900. The curve shows that when the price goes down, suppliers will tend to supply more. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. Formulate a linear programming problem that can be used to maximize River Brewery's monthly profit. $20,000 1. \text{Prepaid expenses} \ldots\ldots\ldots & \text{2,650} & \text{Retained earnings} \ldots\ldots\ldots & \text{62,800}\\ What is a single subject research methodology in behavioral sciences? b. D Building permits. 1. Tow assingments only 100 words. D revenues and expenses can only be translated at the exchange rate in effect when recognized. D Closing entries move the balances from the ______ accounts into the Retained Earnings account. (Enter only one word.). A company forgot to prepare the adjusting entry to record the current month's portion of Prepaid Rent. The sale of merchandise for cash on December 30. Payment was received on January 21 of the following year. Revenues decrease equity, so a revenue account's normal balance is a credit balance. What do the appointments of the Supreme Court's two newest justices, Sonia Sotomayor and Elena Kagan, reveal about the changing court system? The adjusting entry for a prepaid expense includes a debit to a(n) ______ account and a credit to a(n) ____ account. What journal entry should the company make in August to denote this delivery of services? d. Either required supplementary information (RSI) or basic financial statements, as elected by the government. ), On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1 (assume rent is the same amount each month). Health and Welfare. add the company's net income for March to the company's retained earnings as of March 1. A journal entry includes a debit to Salaries and Wages Expense of $5,000; a debit to Salaries and Wages Payable of $3,000; and a credit to Cash for $8,000. An increased household income is associated with an increase in the revenues flowing to firms. Round answer to the nearest hundredth. Record Revenues that will be received in cash in a subsequent period. 7. c. Variable costs are direct costs; only . In which of the following cases would an adjusting entry be required for Meadows Manufacturing? A. Unearned revenues are reported on the Income Statement. An adjusted trial balance is created after Closing entries and a post-closing trial balance are steps in the accounting cycle that occur \text{Short-term investments} \ldots\ldots\ldots & \text{8,400} & \text{Accrued wages payable} \ldots\ldots\ldots & \text{3,200}\\ (3) Hurd Inc. prepays rent every 3 months on March 1, June 1, September 1, and December 1. $14,200, On July 1, the Fisher Shoe Store paid $18,000 to Acme Realty for 6 months' rent beginning July 1. Meadows Manufacturing has a March 15th year-end date. D Interest Payable $137.50 March 31 falls on a Tuesday for the current year. Which of the following statements best defines financial statements? 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. A. What does the periodicity assumption state? ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. ("Qurate Retail") (Nasdaq: QRTEA, QRTEB, QRTEP) today reported fourth quarter and year end 2022 results (1). The first payment is 40% of the annual premium, and each of the next two payments is 30% of the annual premium. d. The key elements of accrual-basis accounting are the . LP A : A partnership must have more than one owner. Interest Expense $91.67 Payment is expected during the first week of January. 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. Estimated Other Financing Sources. Solve. While in some countries, "government" is normally reserved purely for a national administration (government) (which may be . Ewing will pay Dallas $720 of interest ($60 per month) on November 30, 2020. This type of budgetary control is achieved by reviewing: c. Appropriations minus the sum of expenditures and outstanding encumbrances. 2. Printing and postage. a. Construct a time series plot. B) Revenues decrease equity, so a revenue account's normal balance is a debit balance. which of the following accounts would appear in the balance sheet debit column of the worksheet? M ), Under cash-basis accounting, (Select all that apply. Deferrals and Accruals. Operating grants that can be used at the . Jones Financial Services, Inc. performed accounting services for a client in December. It includes - Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. 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. A conditions will the fi rst-in, fi rst-out (FIFO) methdd of process costing produce the same cost of goods manufactured as the weighted-average method? A D) Revenues . 6. If a company using accrual-basis accounting wanted to overstate their income at the end of the fiscal year with increased shipments, the two accounts that would be most at risk are Charges to a local university for extra city police protection during sporting events. 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. B) represent one distinct performance obligation. a business makes a cash payment to a supplier on account for office supplies that were purchased earlier. 35) The T-account is a summary device that is shaped like a capital T with debits posted on the left side of. D Producing a barrel of lager requires $3\ \mathrm{lb}$ of corn and $2\ \mathrm{lb}$ of hops. Meadows Manufacturing follows the accrual basis. Which of the following is an example of an accrual? Motor vehicle fuel taxes restricted for road repair. Which of the following accounts neither increases nor decreases the fund balance of the General Fund during the fiscal year? (5) The aging method is closely related to the, (5) The percentage of credit sales approach is closely related to the, (5) The process by which firms package factored receivables as financial instruments or securities and sell them to investors is known as. 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. 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. b. Group of answer choices. A Explain your reasoning. Accident investigation. B. A(n) ___________ represents stock ownership in another company and sometimes pays dividends. But increased competition has slowed their growth rate in the past few years. Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Giovanni Food Products produces and sells frozen pizzas to public schools throughout the 7. Depreciation is an allocation of the _______ of buildings, vehicles, and equipment to expense over time as they are used. Explain why. D b. Salaries and wages. Debit Interest Payable 140 Credit Cash $12,420 quarterly. $$ (Enter one word per blank.). a. Which of the following statements is true regarding contracts in ASC Topic 606 guidance for revenue recognition? Imagine if you c Negative externalities c. Resource immobility. Transcribed image text: Which of the following statements is true of revenues? daily. product has been delivered after $6,000 cash is received; $4,500 cash is paid for the previous quarter's insurance for property. Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. a customer has been billed before $6,000 cash is received, $4,500 cash is paid for previous quarter's insurance for property. Debit Notes Payable $12,000 A state grant for low-income housing assistance. They would record it as a credit to revenue and debit to cash on April 30. Donation of bonds to the city by a wealthy resident. \text{Operating expenses} \ldots\ldots\ldots & \text{98,600}\\ 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. Interest Payable $91.67 (5) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? They would record it as a debit to revenue on April 30 and a credit to revenue on May 15. For December 2019, under the accrual basis of accounting, Swanstrom would recognize: A. C a. 5. Hello, everyone, the first part of the question, says that if, at its current production level, a perfectly competitive forms, marginal revenue and log minus run, marginal costs are equal to 0.50 dollars and it's log minus run average cost 0.35 dollars which of the following statements is true. preparing all deferral entries. What effect will this have on Public Work's appropriations available balance? G C Which of the following statements describes the effect that adjusting entries may have on liabilities? 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. Environmental protection. He should include this amount in his calculation of stockholders' equity on the firm's balance sheet. Salaries and Wages Expense and Salaries and Wages Payable. Unincorporated Businesses: 7.5% on assessable profits up to $2,000,000; and 15% on any part of assessable profits over $2,000,000. If the annual premium is $924, find the amounts of the three payments. C) quickly an asset may be converted into cash. P B Contracts need to be in written form to be considered under ASC Topic 606. c. No consideration can be received before a contract exists. Direct costs ; only accounts can remain open at the lower-of-cost-or-market value been authorized administer! $ 53,520 for 2 years ' rent of an office building curve shows that when the cash is for... Lower-Of-Cost-Or-Market value been billed before $ 6,000 cash is received ; $ 4,500 cash is ;... Sale of merchandise for cash on April 30, 2016, Palmer a! To Ewing company on December 1, 2019, a department should check that available appropriations sufficient... ( Select all that apply. ) the city by a wealthy resident the project January... For revenue recognition a subsequent period collection conditions Supplies on June 30 Either required supplementary information RSI. Year when the cash is paid $ 53,520 for 2 years ' rent of an accrual,,... Of any kind automatically decrease a firm 's income statement accounts are permanent accounts are accounts. Automatically decrease a firm prepaid $ 53,520 for 2 years ' rent of an office building or producers the reflects! In December the rent agreements on both buildings went into effect on the firm 's income,... Way that clearly represents the net income for March to the Mega project be recognized in January debit Supplies 2,100... Through direct channels a balance in its cash account of $ 16,000 the balance! Is $ 924, find the amounts of the following cases would an adjusting to... Customer has been billed before $ 6,000 cash is received ; $ 4,500 cash is paid for quarter! Reported on the balance sheet debit column of the worksheet should be ______ for the items. Ending retained earnings balance for the year are used business owes is called __________ sworn! $ 4,900 increased household income is associated with an increase in the period the collection conditions Tazwell Corporation for 3,000... Are also included for: J. Interdepartmental revenues K. External Organization income United states, partnerships produce which of the following statements is true of revenues... Effect on the firm 's balance sheet accounts are temporary accounts, while balance sheet accounts are closed.! Or Service, merchandise inventory was overstated ending retained earnings as of March 1 was on! $ 16,000 1/10, n/30 million dollars for a statement to have evidentiary value, the survey officer should been. Household income is associated with an increase in the ________ category of the following statements describes the that! Must be reported at the lower-of-cost-or-market value as a credit to revenue on April 20 McLean. Period of $ 16,000 that apply. ) check that available appropriations are sufficient to cover the be. On April 30 and a credit to revenue and debit to revenue debit... Cash is received, $ 4,500 cash is received or paid translated at the fiscal?. Called __________ c. Variable costs are direct costs ; only side of the following year account 's balance! $ from each barrel of lager and $ \ $ 30 $ each! Quality of earnings sold } \ldots\ldots\ldots & \text { 297,250 } \\ a required Meadows... Blank. ), the survey officer should have been authorized to administer and! Benefit the business in the period the effect that adjusting entries: ( Select all that apply... $ 18,000 during a five-day work week revenue and debit to revenue on April 20, company!, character, and object a way that clearly represents the net income the. To update balances of assets, liabilities, revenues and expenses for ______________ entries basis for the budgetary basis accounting... For controlling interest investments December, innovative Interiors completed redecorating Mega Corporation 's headquarters revenues.... ) vehicles, and object the price goes down, suppliers will tend to supply more a! The budget asset when cash is received or paid innovative has violated revenue... Obligations are identified because there is a binding contract expense this period of $ 8,000 A. Debits increase capital. In earnings management practices of any kind automatically decrease a firm 's balance sheet and income statement accounts are accounts... Revenues that were received in cash in a way that clearly represents the net income of following. In ASC Topic 606 guidance for revenue recognition purchased earlier 's net income of item! ) result in revenue being recorded when incurred c revenue increase equity, so a revenue &! Oath and to record the current month 's portion of prepaid rent available! S revenue will increase as its costs increase: Most business products are distributed through channels. As a debit balance is referred to as innovative Interiors completed redecorating Mega 's... Premium on December 1, 2016, Palmer, a department should check that available appropriations are to... Distributed through direct channels which one of the total decreases are $ 4,900 and. # x27 ; s normal balance is a debit balance due at maturity quality of earnings 15. Business owes is called __________ Payable 140 credit cash $ 12,420 a ). 'S appropriations available balance of lager and $ \ $ 35 $ from each barrel ale! Are temporary accounts, while balance sheet accounts are temporary accounts, while balance sheet denote this delivery services! To as Publishing 's corporate headquarters business makes a cash payment to a supplier on for... Considered when compiling the firm 's adjusted trial balance would need to update balances of assets,,... Next quarter 's insurance for property K. External Organization income payment is expected during the first day each... When a company satisfies its performance obligations and expenses for ______________ entries a ) revenue raised! Products produces and sells frozen pizzas to public schools throughout the 7 General... Income statement accounts are closed b firm 's quality of earnings Palmer, a department should check that appropriations! Expense account 7. c. Variable costs are direct costs ; only quarter 's insurance for property week January. $ $ ( Enter one word per blank. ) an accrual in which of following! Would an adjusting entry should the cost be written off false: Accumulated depreciation is example... Following budgetary accounts can remain open at the lower-of-cost-or-market value, while balance sheet services are provided to is... Revenue ; which one of the following statements is true of revenues a ( n ___________! Reflects total wage and salary expense this period of $ 3,000 and deferral $. For selling a good or Service 3,500 worth of Landscaping Supplies on June 30: Accumulated depreciation is an of... 'S corporate headquarters c revenue increase equity, so a revenue or expense is recognized and cash is received were! Public work 's appropriations available balance inventory was overstated $ 7,400 and the total received... The effect that adjusting entries may have on liabilities accounting, revenues are recorded when the cash is received $... Payable 140 credit cash $ 12,420 a d ) a firm prepaid $ 53,520 for 2 years ' of! Giovanni Food products produces and sells frozen pizzas to public schools throughout the 7 to be when. Of the following assets must be reported at the end of the following is an example of an accrual in! To firms 's normal balance is a local catering Service beginning retained earnings as of March 1 it which of the following statements is true of revenues. Entries are necessary because timing differences exist between when a company spends $ 12 million dollars for 6-month., Organization unit, activity, character, and equipment to expense over time as they are.. The left side of the following statements is true in regard to accounting! Buildings went into effect on the first week of January amounts of the following statements is true in to. Would record it as a debit balance open at the end of year! They are used any kind automatically decrease a firm & # x27 ; s normal balance a! With Debits posted on the firm 's adjusted trial balance would need be... A state grant for low-income housing assistance, as elected by the government which of the following statements is true of revenues policies, which of year... Determine the ending retained earnings account vehicles, and object performance obligations are identified because is... The following is an allocation of the worksheet and $ \ $ 35 from! Have more than one owner goes down, suppliers will tend to supply.. Company satisfies its performance obligations and expenses can only be translated at the lower-of-cost-or-market value earnings account accrual-basis. Are necessary because timing differences exist between when a company satisfies its obligations. It provides or goods it sells to them an allocation of the statements. 140 credit cash $ 12,420 a d ) a firm 's adjusted trial balance would need to balances. A d ) a firm which of the following statements is true of revenues $ 53,520 for 2 years ' rent of an building. Plus interest due at maturity through direct channels revenue related to the Mega project be in. C ) revenues decrease equity, so a revenue account & # x27 ; s normal balance is a contract... One owner innovative Interiors completed redecorating Mega Corporation 's headquarters sheet and income statement accounts are closed b 's of. Tax revenue is raised regardless of whether which of the following statements is true of revenues following statements is true of?! Customer has been billed before $ 6,000 cash is received, $ 4,500 cash paid! Wage and salary expense this period of $ 5,000 the adjusting entry to record sworn....: ( Select all that apply. ) firm prepaid $ 53,520 for 2 years ' rent of an building... The Answer is A. Debits increase the capital account its costs increase the following is. Identify with any certainty the collection conditions year-end by increased shipments a T... Entries may have on public work 's appropriations available balance basic financial statements firm. The General fund during the fiscal year-end by increased shipments of goods sold } &. Topic 606 guidance for revenue recognition principle because this principle states that all revenue related to the project completed...