The accountant may spread the cost of a building over many years primarily because of the a. fiscal year assumption. c. periodicity and going concern assumption. b. going concern assumption. d. periodicity assumption.
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The accountant may spread the cost of a building over many years primarily because of the
a. fiscal year assumption. c. periodicity and going concern assumption.
b. going concern assumption. d. periodicity assumption.
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- Which of the following statements is true? A. Tangible assets lack physical substance. B. Tangible assets will be consumed in a year or less. C. Tangible assets have physical substance. D. Tangible assets will be consumed in over a year.A portion of Johnsons Farm Supply work sheet for the year ended December 31 follows: Required 1. Determine the entries that appeared in the Adjustments columns and prepare the general journal entries for the adjustments in the general journal, page 19. 2. Determine the net income for the year. 3. What is the amount of the ending capital?Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Understandability Relevance Faithful representation Comparability Depreciation Consistency Materiality Conservatism Operating cycle Current asset Current liability Liquidity Working capital Current ratio Single-step income statement Multiple-step income statement Gross profit Profit margin Auditors report An income statement in which all expenses are added together and subtracted from all revenues. The magnitude of an accounting information omission or misstatement that will affect the judgment of someone relying on the information. The capacity of information to make a difference in a decision. An income statement that shows classifications of revenues and expenses as well as important subtotals. The practice of using the least optimistic estimate when two estimates of amounts are about equally likely. The quality of accounting information that makes it comprehensible to those willing to spend the necessary time. Current assets divided by current liabilities. The quality of information that makes it complete, neutral, and free from error. An obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than one year. Current assets minus current liabilities. Net income divided by sales. For accounting information, the quality that allows a user to analyze two or more companies and look for similarities and differences. An asset that is expected to be realized in cash or sold or consumed during the operating cycle or within one year if the cycle is shorter than one year. The ability of a company to pay its debts as they come due. For accounting information, the quality that allows a user to compare two or more accounting periods for a single company. The process of allocating the cost of a long-term tangible asset over its useful life. The period of time between the purchase of inventory and the collection of any receivable from the sale of the inventory. Sales less cost of goods sold. The opinion rendered by a public accounting firm concerning the fairness of the presentation of the financial statements.
- which of the following is a revenue expenditure : a- purchase of a computer for the office b- legal costs for the purchase of property c- cost extension to property d- quarterly electricity billWhich of the following statements is true? Group of answer choices A. Tangible assets have physical substance. B. Tangible assets lack physical substance. C. Tangible assets will be consumed in a year or less. D. Tangible assets will be consumed in over a year.For each of the following situations write the principle, assumption, or concept that justifies orexplains what occurred.A. A landscaper received a customer’s order and cash prepayment to install sod at a house that would notbe ready for installation until March of next year. The owner should record the revenue from thecustomer order in March of next year, not in December of this year.B. A company divides its income statements into four quarters for the year.C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at$205,000.D. Brandy’s Flower Shop is forecasting its balance sheet for the next five years.E. When preparing financials for a company, the owner makes sure that the expense transactions arekept separate from expenses of the other company that he owns.F. A company records the expenses incurred to generate the revenues reported.
- Which of the following statements is true? a) Tangible assets lack physical substance. b) Tangible assets have physical substance. c) Tangible assets will be consumed in a year or less. d) Tangible assets will be consumed in over a year.Match the correct answer with these terms : cash, cell, SL depreciation, tangible, fiscal, a calender, cost, replacement cost, liabilities, GAAP It assumes that an equal share of the total depreciation is taken each year during the assets life. Answer 1 Is a one-year period that companies use for financial reporting Answer 2 A set of rules used as a basis for financial reporting Answer 3 Assets having physical substance or form. Answer 4 The amount creditors expect you to pay in the future Answer 5 The value of what was given up to acquire the item. Answer 6 The asset was valued at the amount it would cost to replace the asset Answer 7 The accounting system that records revenue when cash is received from customers and expenses when cash is paid Answer 8 The intersection of a column and row. Answer 9 A one-year accounting period ends that occurs at December 31. Answer 10The adjusting entry to record the depreciation of a building for the fiscal period is a.debit Accumulated Depreciation; credit Depreciation Expense. b.debit Depreciation Expense; credit Accumulated Depreciation. c.debit Building; credit Depreciation Expense. d.debit Depreciation Expense; credit Building.
- For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. B. A company divides its income statements into four quarters for the year. C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. D. Brandys Flower Shop is forecasting its balance sheet for the next five years. E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns. F. A company records the expenses incurred to generate the revenues reported.A portion of Anderson Publishings work sheet for the year ended December 31 follows: Required 1. Determine the entries that appeared in the Adjustments columns and prepare the general journal entries for the adjustments. If using Working Papers, start on page 120 in the general journal. 2. Determine the net income for the year. 3. What is the amount of ending capital?For each of the following situations, indicate whether you agree or disagree with the financial reporting practiceemployed and state the accounting concept that is applied (if you agree) or violated (if you disagree).3. Cypress Manufacturing Company purchased machinery having a five-year life. The cost of the machinery isbeing expensed over the life of the machinery
