A) To reduce the recorded value of an asset to better reflect its true market value.
B) Any outlay of money by a company for any purpose.
C) Total revenue minus total expenses.
D) The concept that revenue should be recorded when earned,not necessarily when payment is received.
E) The increase in value of financial assets held by a company.
F) The practice of dividing the life of the business into months and years.
G) The concept that a company should record revenue during the same period as expenses.
H) The concept that revenue and expenses should be recorded at the time received or paid.
I) Payments received for goods that have not yet been delivered or services that have not yet been performed.
J) Revenues should be recorded when they are earned and expenses when they are incurred.
K) Any use or sacrifice of a company's resources to generate revenue.
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Multiple Choice
A) The concept that expenses should be reported at the same time as the related revenue.
B) Reported when a company sells goods or services in the ordinary course of business for more than it costs to produce.
C) A company's policy on when to report revenue in the financial statements.
D) A ratio that indicates the percent of each revenue dollar that is left over after covering costs and expenses.
E) Reporting expenses and revenue according to the time the underlying activities occur.
F) A liability account indicating customers have already paid for services not yet rendered.
G) The principle that changes in assets must be matched by changes in liabilities and equity.
H) An indication that a company has already paid a cost not yet incurred.
I) A list of account balances when the accounts do not yet include all revenues and expenses.
J) Also known as net assets,this is the value of assets minus liabilities.
K) Reporting expenses and revenues according to the time the money is paid or received.
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Multiple Choice
A) Costs of items used up this period but paid for next period
B) Costs of items paid for in this period but used up next period
C) Cost of land purchased and paid for this period
D) Repayment of debt from a loan in a prior period
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True/False
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Multiple Choice
A) $21,280.
B) $2,720.
C) $36,320.
D) $10,080.
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Multiple Choice
A) revenue in 2017.
B) an expense in 2017.
C) a liability in 2017.
D) stockholders' equity in 2017.
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Multiple Choice
A) Income statement: Salaries and Wages Expense $42 million;Balance sheet: Salaries and Wages Payable $2 million
B) Income statement: Salaries and Wages Expense $40 million;Balance sheet: Salaries and Wages Payable $2 million
C) Income statement: Salaries and Wages Expense $40 million;Balance sheet: Salaries and Wages Payable $0
D) Income statement: Salaries and Wages Payable $2 million;Balance sheet: Salaries and Wages Expense $42 million
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Multiple Choice
A) If payment is received at the same time a service is provided,it does not matter whether cash basis accounting or accrual basis accounting is used;both would record the transaction with the same journal entry.
B) The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which they relate.
C) If a company receives a bill for rent for the period and decides to delay payment,the rent will not be recorded as an expense if accrual basis accounting is used.
D) If the cash basis of accounting is used,the Deferred Revenue account is increased when a company receives a deposit in advance of services to be performed by the company.
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Multiple Choice
A) credit to Salaries and Wages Expense for $12,210.
B) credit to Cash for $12,210.
C) debit to Cash for $12,210.
D) credit to Salaries and Wages Payable for $12,210.
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Multiple Choice
A) Billing customers for services rendered but not yet paid for
B) Paying off a loan to the bank
C) Purchasing equipment for cash
D) Receiving cash investments from owners
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Multiple Choice
A) $46,116.
B) $41,516.
C) $10,416.
D) $46,916.
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True/False
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Multiple Choice
A) purchased.
B) paid for.
C) used.
D) purchased on account.
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Multiple Choice
A) Revenue accounts are a subset of assets,and expense accounts are subcategories of liabilities.
B) Both revenue accounts and expense accounts are subcategories of assets.
C) Both revenue accounts and expense accounts are subcategories of Retained Earnings.
D) Revenue accounts are a subcategory of Cash and expense accounts are a subcategory of Accounts Payable.
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Multiple Choice
A) Debit Cash and credit Accounts Receivable.
B) Debit Cash and credit Sales Revenue.
C) Debit Accounts Receivable and credit Cash.
D) Debit Cash and credit Deferred Revenue.
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Multiple Choice
A) revenues to increase by $517,000,expenses to increase by $438,000,and Retained Earnings to decrease by $79,000.
B) Cash to increase by $517,000,expenses to increase by $438,000,and Common Stock to increase by $79,000.
C) revenues to increase by $517,000,expenses to increase by $438,000,and Cash to increase by $79,000.
D) revenues to increase by $79,000,expenses to increase by $438,000,and Cash to increase by $517,000.
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Multiple Choice
A) violate the expense recognition principle.
B) are an example of accrual accounting.
C) violate the revenue recognition principle.
D) violate both the expense recognition and revenue recognition principles.
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Multiple Choice
A) Net profit margin would be understated.
B) Net profit margin would be overstated.
C) Net profit margin would be unaffected.
D) Net profit margin cannot be computed because overstating sales is unethical.
Correct Answer
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Multiple Choice
A) The concept that expenses should be reported at the same time as the related revenue.
B) Reported when a company sells goods or services in the ordinary course of business for more than it costs to produce.
C) A company's policy on when to report revenue in the financial statements.
D) A ratio that indicates the percent of each revenue dollar that is left over after covering costs and expenses.
E) Reporting expenses and revenue according to the time the underlying activities occur.
F) A liability account indicating customers have already paid for services not yet rendered.
G) The principle that changes in assets must be matched by changes in liabilities and equity.
H) An indication that a company has already paid a cost not yet incurred.
I) A list of account balances when the accounts do not yet include all revenues and expenses.
J) Also known as net assets,this is the value of assets minus liabilities.
K) Reporting expenses and revenues according to the time the money is paid or received.
Correct Answer
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Multiple Choice
A) To reduce the recorded value of an asset to better reflect its true market value.
B) Any outlay of money by a company for any purpose.
C) Total revenue minus total expenses.
D) The concept that revenue should be recorded when earned,not necessarily when payment is received.
E) The increase in value of financial assets held by a company.
F) The practice of dividing the life of the business into months and years.
G) The concept that a company should record revenue during the same period as expenses.
H) The concept that revenue and expenses should be recorded at the time received or paid.
I) Payments received for goods that have not yet been delivered or services that have not yet been performed.
J) Revenues should be recorded when they are earned and expenses when they are incurred.
K) Any use or sacrifice of a company's resources to generate revenue.
Correct Answer
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