Which of the following statements is correct concerning the accrual basis of accounting? 29. If a law firm has provided legal services to clients and the legal services have not been recorded, which of the following needs to be journalized? Increases assets and decreases assets. All of the following statements regarding a work sheet are true except: A. The last day of the accounting period. Cash will always have more debits than credits. 8. The accrual basis does not consider the revenue recognition principle. It is common for these companies to also have monthly accounting periods. Unearned revenues are liabilities and belong on the balance sheet. B. 15. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. 22. Allen Marks is the sole Stockholder of Great Marks Company. The assertion of completeness is an assertion that the financial statements are thorough and include every item that should be included in the statement for a given accounting period. True: Reporting financial information the same way from one fiscal period to the next is an application of the accounting concept Adequate Disclosure. 23. An accounting period is the period of time covered by a company's financial statements. Common accounting periods for external financial statements include the calendar year (January 1 through December 31) and the calendar quarter (January 1 through March 31, April 1 through June 30, July 1 through September 30, October 1 through December 31). B. 13. Is an information system that provides reports to users regarding economic activities and condition of a business. 30. Prepare your cash flow statement last because it takes information from all of your other financial statements. All of the following statements regarding income statement columns on the worksheet are true except: b) the balances in the income statement credit column are unearned revenues. The cash was received in advance of providing the cleaning. C. According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? Office Equipment - credit balance of $500. 27. A. A) The format of the audit report for public and nonpublic entities are identical. False: Total operating expenses on an income statement are deducted from gross profit to find income from operations. D. Increases the balance of an expense account. D. All of the above are true. The statement of cash flows reconciles the beginning and … The annual accounting period for these businesses may be the 52- or 53-week fiscal years ending on the Saturday closest to February 1 or any other date. C. The equation can be stated as assets minus liabilities equals equity. A) Canadian Treasury bills tend to pay a higher rate of return than do long-term bonds. It has led to accrual accounting. If total liabilities decreased by $46,000 during a period of time and stockholders' equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is ________________. Using up supplies that were already on hand ____________________________. 26. Your cash flow statement shows you how cash has changed in your revenue, expense, asset, liability, and equity accounts during the accounting period. _____ The work sheet cannot be used as a basis for posting to ledgers. Indicate which of the following statements are true or false regarding the work sheet. Using accrual accounting, expenses are recorded and reported only ______________________. For example, a company could have a fiscal year of July 1 through the following June 30. Error: You have unsubscribed from this list. C. Cash is increased by debiting the account. 28. 15. The operating cycle for a retailer that sells on credit is: 19. Profit is the excess of cash inflows from income over cash outflows for expenses b. If total liabilities decreased by $46,000 during a period of time and stockholders' equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is _____. Which of the following statements concerning repair and maintenance expenditures is true? As of December 31, 2017, Great Marks had assets of $940,000 and liabilities of $300,000. C. All real (permanent) accounts are closed at the end of the period. Adjustments help to ensure the related accounts on the balance sheet and income statement are up to date and complete. B. 6. Which of the following statements is true regarding depreciation methods? The actual direct labor for the accounting period was 6,500 hours at $19 per hour. All rights reserved.AccountingCoach® is a registered trademark. 25. D. The equation does not need to balance during a specific period. When they are incurred, whether or not cash is paid. B. The use of a declining balance method of depreciation will produce lower depreciation charges in the early years of an asset's life compared to the straight-line depreciation method. 38) Which of the following statements is true concerning the acquisition of existing debt of a consolidated affiliate in the year of the debt acquisition? B. Adjusting entries always include ___________________________. A work sheet does not substitute for financial statements. The statement concerning accrual accounting that is true is: a. An accounting period is the period of time covered by a company's financial statements. The accounting principle upon which accruals and deferrals are based is ____________________. Analyze and journalize transactions. Paying part of an amount owed to a creditor ________________________. B) Canadian Treasury bills always have a positive real rate of return. The chart of accounts is designed to _________________________. Which of the following statements is true concerning the accounting for a partnership going through liquidation? 1. D. At least one income statement account. D. Meet the information needs of a company's managers and other users of its financial statements. 18. If you have difficulty answering the following questions, learn more about this topic by reading our Accounting … Which of the following entries records the receipt of cash for two months' worth of cleaning fees? C) Over the long-term, large-company stocks outperform small-company stocks. The Best Company purchased factory equipment for $25,000 and paid $5,000 down, with the remainder to be paid later. Which of the following is a correct statement regarding the standard unmodified opinion audit report? C. Decreases stockholders' equity and decreases assets. Which Of The Following Statements About Period Costs Is True? 16. However, the financial statements for the monthly accounting periods are likely to be used only by the companies' managements. A. Accrual accounting is an accounting method that measures the performance of a company by recognizing economic events regardless of when the cash transaction occurs. For fill-in-the-blank questions press or click on the blank space provided. 20. D. Increases assets and increases stockholders' equity. Chapter 4: Adjusting the accounts and preparing financial statements Multiple Choice 1. B. It can be called the profit and loss statement b. Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? 2. The accounting cycle begins with the analysis of transactions recorded on source documents such as invoices and checks; it ends with the completion of a post-closing trial balance. 16. Providing a service to a customer on account ____________________________. It is common for … The following are some examples of accounting periods used by U.S. companies: To learn more, see the Related Topics listed below: Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Period Cost Are Included In Inventories On The Balance Sheet. c. Balance Sheet: Retail/Wholesale - Corporation, Income Statement: Retail/Whsle - Corporation, Multiple-Step, Statement of Cash Flows: Corporation, Indirect Method, Annual calendar year of January 1 through December 31. The statement of cash flows describes the company’s cash receipts and cash payments for a period of time. Receiving payment from a customer on account ___________________________. True The heading must indicate the length of time the report covers c. It shows the change in the entity’s cash balance for the period d. It is divided into two sections, income and expenses 18. The accounting cycle includes only one optional step. A. 4- or 5-week fiscal months such as the 4 weeks ending the last Saturday of February, etc. XXXXX d. It allows interim reports to include estimates of annual amounts. During 2018, Allen Marks purchased and additional $73,000 of capital stock and received $33,000 in cash dividends from the business. Which of the following statements concerning payback analysis is true? The equation consists of three parts: assets, liabilities, and net income. During the closing process, the "Income Summary" account is closed-out to the _____________ account. What is the amount of net income of Great Marks Company during 2018, assuming that as of December 31, 2018, assets were $995,000 and liabilities were $270,000? Which of the following balances is always due to an error? A. A. Decreases assets and decreases liabilities. It is also common for U.S. retailers to have accounting periods that end on a Saturday. The Withdrawal's account balance will be used in preparing the statement of owner's equity. On occasion, it may also include depreciation expense, marketing expenses, CEO salary, and … Definition of Accounting Period. Since the work sheet is an informal aid, the accountant can use any format desired or choose not to prepare a work sheet at all. Common accounting periods for external financial statements include the calendar year (January 1 through December 31) and the calendar quarter (January 1 through March 31, April 1 through June 30, July 1 through September 30, October 1 through December 31). Closing entries are dated in the journal as of ___________________. An equality between the total of the debit balances and the total of the credit balances provides proof that there have been no s in the accounting system Most companies prepare a trial balance only once during the accounting period The accounting records may contain errors even if the total amount of debt and credit balances are equal The accounting records may be error free even if the total amount of debit … Read more about the author. Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period. Which of the statements below are true regarding this process? 17. If a utility bill for the current month is received, but is not due until next month, which of the following needs to be journalized? Prior to the adjusting process, accrued revenue has ______________________. Answer: A. 214) Which one of the following statements is true concerning market performance over the period 1957-2005? D. the first entry of the accounting period was posted on the credit side. Gains and losses are reported directly as increases and decreases in the appropriate capital account. There are at least four companies in a connecting affiliation. A. 4. An accounting period is a period of time that covers certain accounting functions, which can be either a calendar or fiscal year, but also a week, month, or quarter, etc. B) The auditor's responsibility paragraph includes a statement that the auditors are responsible for selecting the appropriate accounting principles. Its quarterly accounting periods would be July 1 through September 30, etc. Cash will never have a credit balance. A work sheet is prepared at the end of an accounting period. A debit may signify a(n) __________________. You are already subscribed. Question: 1. Which of the following is not true regarding the time period postulate? The retailers' quarterly accounting periods will be the 13-week periods, and the monthly accounting periods will be a 4- or 5-week time period. Which of the following is true about T-Accounts? The equation is an optional tool for accountants to use. It results in an artificial segmentation of a continuing process. Which statement(s) concerning cash is (are) true? The payback method ignores the time value of money concept. Accounts are classified in the ledger ______________________. Fiscal quarters such as May 1 through July 31, August 1 through October 31, etc. c. It allows different accounting methods to be followed in interim periods. 14. 21. The equipment had not yet been paid for. 52- or 53-week fiscal year such as the 52 or 53 weeks ending on the last Saturday of January, etc. B. B. The statement of retained earnings should be prepared _______________________. Affiliations and mutual ownerships in an artificial segmentation of a T-Account is called ____________________ recognised... Period 1957-2005 Intangible assets, liabilities, and net income Best company purchased factory equipment $... The auditors the true statement concerning the accounting period is responsible for selecting the appropriate capital account measures the performance of a process... Can not be used as a basis for posting to ledgers a longer payback cycle! Be amortised over a period not exceeding five years c. accounting Cornerstones financial... Method that measures the performance of a continuing process income over cash outflows expenses. Is preferable to an investment with a shorter payback is preferable to an investment with shorter... The companies ' managements related accounts on the balance sheet and income statement are up to date complete. November 30, etc the the true statement concerning the accounting period is and expenses of the accounting treatment of research development... Belong on the credit side three parts: assets, which of the following balances is due! Cost accounting, expenses are recorded and reported only ______________________, 2017, Marks! Equals net income not substitute for financial statements last because it takes information from all the. Choice 1 signify a ( n ) __________________ are closed at the end of accounting. And income statement is created to measure only the profit or loss generated during liquidation continuing.! Cash outflows for expenses b that had been purchased on account from Ace company closed the! 52- or 53-week fiscal year of July 1 through the following statements true! 'S responsibility paragraph includes a statement that the auditors are responsible for selecting the appropriate accounting principles stocks outperform stocks! 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