_____ The work sheet is essentially a working tool of the accounting. 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. 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. A. Which of the following best describes accounting? 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. Copyright © 2020 AccountingCoach, LLC. _____ The work sheet cannot be used as a basis for posting to ledgers. B. 24. Each of the following accounts has a debit entry in the adjustments columns of a work sheet. A work sheet does not substitute for financial statements. 12. 15. False: Total operating expenses on an income statement are deducted from gross profit to find income from operations. Increases assets and decreases assets. Which of the following fixed asset accounts listed below will not have a related contra-asset account? An accounting period is the period of time covered by a company's financial statements. True: Reporting financial information the same way from one fiscal period to the next is an application of the accounting concept Adequate Disclosure. Chapter 4: Adjusting the accounts and preparing financial statements Multiple Choice 1. 10. You are already subscribed. 17. B. In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. B. B) Canadian Treasury bills always have a positive real rate of return. When they are incurred, whether or not cash is paid. 214) Which one of the following statements is true concerning market performance over the period 1957-2005? If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry? A. 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. True A. 2. 22. It is also common for U.S. retailers to have accounting periods that end on a Saturday. B) The auditor's responsibility paragraph includes a statement that the auditors are responsible for selecting the appropriate accounting principles. 1.Which is a true statement regarding the accounting equation? 15. Which of the statements below are true regarding this process? B. This cycle consists of the following steps: 1. 18. The statement of retained earnings should be prepared _______________________. It can be called the profit and loss statement b. Its quarterly accounting periods would be July 1 through September 30, etc. An account is said to have a credit balance if ________________________. Which of the following statements is true regarding depreciation methods? In the U.S., some companies have annual accounting periods that end on dates other than December 31. 31. 22. Read more about the author. 23. Profit is the excess of cash inflows from income over cash outflows for expenses b. C. Cash is increased by debiting the account. D. At least one income statement account. A. The last day of the accounting period. Analyze and journalize transactions. D. All of the above are true. 7. The statement of cash flows describes the company’s cash receipts and cash payments for a period of time. If a company pays for an insurance policy that covers the next 12 months, which of the following needs to be journalized? Which statement(s) concerning cash is (are) true? A debit may signify a(n) __________________. A separate income statement is created to measure only the profit or loss generated during liquidation. A) The format of the audit report for public and nonpublic entities are identical. 21. Which of the following statements concerning repair and maintenance expenditures is true? A. A. During a recent accounting period a company produced 1,000 units of Item Q and 400 units of Item R. The standard direct labor is 4 hours for each unit of Item Q and 6 hours for each unit of Item R. The standard cost for one hour of direct labor is $20 per hour. 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. D. Meet the information needs of a company's managers and other users of its financial statements. There are at least four companies in a connecting affiliation. Annual fiscal year such as July 1, 2019 through June 30, 2020; April 1, 2019 through March 31, 2020; etc. Which of the following balances is always due to an error? The chart of accounts is designed to _________________________. Which of the following is a correct statement regarding the standard unmodified opinion audit report? Providing a service to a customer on account ____________________________. C. All of the other answers are correct. A) Canadian Treasury bills tend to pay a higher rate of return than do long-term bonds. Which statement(s) concerning cash is (are) true? A) Cash flows from operations may be higher than expected for the company's sales B) The company may offer trade discounts to lengthen the collection period C) The company should expand operations with its excess cash a. C. Accounts Payable, debit; Equipment, credit. Fiscal quarters such as May 1 through July 31, August 1 through October 31, etc. A.) Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? The amount of the credits exceeds the amount of the debits. 52- or 53-week fiscal year such as the 52 or 53 weeks ending on the last Saturday of January, etc. The actual direct labor for the accounting period was 6,500 hours at $19 per hour. Receiving cash for services performed _________________________. 26. b. B. Which of the following entries records the receipt of cash for two months' worth of cleaning fees? 13-week fiscal quarters such as the 13 weeks ending on the last Saturday in April, etc. The statement of cash flows reconciles the beginning and … 30. D. Increases the balance of an expense account. 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? Receiving payment from a customer on account ___________________________. Error: You have unsubscribed from this list. C. In accordance with their appearance in the financial statements. For fill-in-the-blank questions press or click on the blank space provided. b. 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). Adjusting entries always include ___________________________. Examples include selling, general and administrative (SG&A) expenseSG&ASG&A includes all non-production expenses incurred by a company in any given period. 3. Joe's Maintenance Service returned equipment that had been purchased on account from Ace Company. a. Which Of The Following Statements About Period Costs Is True? Which of the following statements concerning the income statement is not true? 29. 27. Accounts are classified in the ledger ______________________. 20. a. Closing entries are dated in the journal as of ___________________. Allen Marks is the sole Stockholder of Great Marks Company. Which of the following statements concerning payback analysis is true? Indicate which of the following statements are true or false regarding the work sheet. It results in an artificial segmentation of a continuing process. A. Which of the following statements is correct concerning the accrual basis of accounting? Prepare your cash flow statement last because it takes information from all of your other financial statements. 4. On occasion, it may also include depreciation expense, marketing expenses, CEO salary, and … However, the financial statements for the monthly accounting periods are likely to be used only by the companies' managements. 8. 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 ________________. C. Increases assets and increases stockholders' equity. The statement concerning accrual accounting that is true is: a. 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? Using accrual accounting, expenses are recorded and reported only ______________________. Answer: A. 13. It has led to accrual accounting. As of December 31, 2017, Great Marks had assets of $940,000 and liabilities of $300,000. A. Cash will never have a credit balance. 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. During the closing process, the "Income Summary" account is closed-out to the _____________ account. An investment with a shorter payback is preferable to an investment with a longer payback. 25. The accounting principle upon which accruals and deferrals are based is ____________________. According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? Accrual accounting is an accounting method that measures the performance of a company by recognizing economic events regardless of when the cash transaction occurs. It is common for … The payback method ignores the time value of money concept. Question: 1. 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. 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. Which of the following statements is true concerning connecting affiliations and mutual ownerships? B. False: Operating revenue less cost of merchandise sold equals net income. For example, a company could have a fiscal year of July 1 through the following June 30. Accounting Cornerstones of Financial Accounting Which of the following statements regarding the income statement is true? 15. 33. If you have difficulty answering the following questions, learn more about this topic by reading our Accounting … 14. B. 19. Prior to the adjusting process, accrued revenue has ______________________. XXXXX d. It allows interim reports to include estimates of annual amounts. D. the first entry of the accounting period was posted on the credit side. The cash was received in advance of providing the cleaning. D. Increases assets and increases stockholders' equity. Been earned and not recorded as revenue. Period Cost Are Included In Inventories On The Balance Sheet. Adjustments help to ensure the related accounts on the balance sheet and income statement are up to date and complete. 2. 9. This includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. 28. In a mutual ownership, at least two companies in the consolidated group own portions of a third company. 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? Of capital stock and received $ 33,000 in cash dividends from the business prepared at end... 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