FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 2: Accounting for Accruals and Deferrals

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

What should an accountant do when there is no traceable connection between expenses and revenue?

A) Apply the matching concept
B) Design a system of internal control
C) Exercise judgment
D) Be as uniform as possible

E) None of the above
F) C) and D)

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Rushmore Company provided services for $45,000 cash during Year 1.Rushmore incurred $36,000 of operating expenses on account during Year 1,and by the end of the year,$9,000 of that amount had been paid with cash.If these are the only accounting events that affected Rushmore during Year 1,which of the following statements is true?

A) The amount of net loss shown on the income statement is $9,000.
B) The amount of net income shown on the income statement is $27,000.
C) The amount of net income shown on the income statement is $9,000.
D) The amount of net cash flow from operating activities shown on the statement of cash flows is $18,000.

E) C) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

Asset use transactions always involve the payment of cash.

Which of the following financial statements is impacted most significantly by the matching concept?

Bledsoe Company acquired $17,000 cash by issuing common stock on January 1,Year 1.During Year 1,Bledsoe earned $8,500 of revenue on account.The company collected $6,000 cash from customers in partial settlement of its accounts receivable and paid $5,400 cash for operating expenses.Based on this information alone,what was the impact on total assets during Year 1?

The matching concept leads accountants to select the recognition alternative that produces the lowest amount of net income.

Certified public accountants are obligated to act in a way that serves the public interest.

Which of the following accounts would not appear on a balance sheet?

What do accountants commonly do when the connection between an expense and the corresponding revenue is vague?

Which of the following is frequently used to describe the expenses that are matched in the same accounting period in which they are incurred?

Mize Company provided $45,500 of services on account,and collected $38,000 from customers during the year.The company also incurred $37,000 of expenses on account,and paid $32,400 against its payables.How do these events impact the elements of the financial statements model?

Joseph Company purchased a delivery van on January 1,Year 1 for $35,000.The van is estimated to have a 5-year useful life and a $5,000 salvage value.How much expense should Joseph recognize in Year 1 related to the use of the van?

The balances of the temporary accounts are transferred to Net Income,a permanent account,during the closing process.

The collection of an account receivable is a claims exchange transaction.

On December 1,Year 1,Jack's Snow Removal Company received $6,000 of cash in advance from a customer and promised to provide services for that customer during the months of December,January,and February.How will the Year 1 year-end adjustment to recognize the partial expiration of the contract impact the elements of the financial statements model?

The following account balances were drawn from the Year 1 financial statements of Grayson Company: What is the balance of the Common Stock account?

[The following information applies to the questions displayed below.] Nelson Company experienced the following transactions during Year 1, its first year in operation. Acquired $12,000 cash by issuing common stock Provided $4,600 of services on account Paid $3,200 cash for operating expenses Collected $3,800 of cash from customers in partial settlement of its accounts receivable Paid a $200 cash dividend to stockholders -What is the amount of net cash flows from operating activities that will be reported on the Year 1 statement of cash flows?

Providing services to customers on account is an asset exchange transaction.

Which of the following are "matched" under the matching concept?

Addison Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Addison's statements?