When a company has net income, what happens to its assets and/or to its liabilities? 2. Why must a company that gives a guaranty or warranty with its product or service show an expense in the year of sale rather than in a later

Q: What is the impact on A Company financial statements if the company forgets to recognize that…

A: Unearned Revenue - Unearned Revenue is the revenue which is not earned by the company but amount…

Q: The bookkeeper for your company made a mistake and forgot to accrue interest expense at the end of…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Why must companies record accrued interest revenue at the end of the accounting period?

A: Accrued interest: It is an interest which has already been earned has not yet been received. This…

Q: A company uses the direct write-off method to account for bad debts. What is the impact on the…

A: Bad debt expense:   Bad debt expense is an expense account. The amounts of loss incurred from…

Q: (a) Belief that a company will remain in business for the foreseeable future. (Note: Do not use the…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Which one of these statements about the accrual-basis of accounting is false? This basis is in…

A: Cash basis of accounting recognize the expenses or revenues when they are paid or received. Accrual…

Q: A company wishing to increase earnings in the current period may choose to:A . decrease the useful…

A: The amount of profit earned by the company or an individual is known as the earning of the company…

Q: If a company makes a prior period adjustment, which of the following describes how it must be…

A: A prior period adjustment is the result of a material error discovered in the financial statements…

Q: Which of the following liabilities is created when a company receives cash for services to be…

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: a) What is the net income of Liberty Company for the current year? b) How much is the comprehensive…

A: Net income of Liberty Company for the current year: Sales P9,750,000 Interest revenue 18,000 Gain on…

Q: Which of the following statements is most correct?(a) Working capital measures the company's ability…

A: A high working capital ratio is a sign that the corporation is not capitalizing their surplus cash…

Q: For interim financial reporting, when the business is seasonal, what does IFRS suggest?

A: Financial reporting means releasing the financial reports of the company to its shareholders and in…

Q: The income statement records all the revenues and expenses for a given period and shows whether the…

A: Income statement: It is a Financial statement that shows you how profitable your business was over a…

Q: Which of the fo allowing statements is most correct?(a) The balance sheet statement summarizes how…

A: A balance sheet is a statement which provides financial data related to the assets, liabilities and…

Q: A company is permitted to recognize revenue over a period of time? O True O False

A: Solution- Revenue is recognize when seller transferred  control of goods or services  to customers .…

Q: When a company pays its rent in advance, its balance sheet will refl ect a reduction in: B . assets…

A: Current assets: The assets which could be converted into cash within one year like accounts…

Q: If the income statement error is discovered in the year of error, what action is to be done by the…

A: An error in income statement refers to posting an expense in the books in the wrong account such as…

Q: When a company pays its rent in advance, its balance sheet will refl ect a reduction in: C . one…

A: When a company pays its rent in advance, its balance sheet will reflect a reduction in one category…

Q: Explain the effect on the company's financial statements if a company switches from the historical…

A: A historical method is the accounting principle method in which the asset is recorded at the…

Q: which of the following is FALSE regarding a firm's financial statements? Inventory is part of…

A: Financial statements -are the final reports prepared by   management staff of a company to present…

Q: According to the IASB Framework for the preparation and presentation of financial statements, which…

A: According to the IASB Framework for the preparation and presentation of financial statements, which…

Q: Depreciation is considered as accounting policy and operational expense for the accounting period.…

A:

Q: Prepare an income statement for the Markert Company for each year assuming that the company…

A: Income statement at a point of time- It states that Income statements are prepared for a particular…

Q: What is a liability? a. all debts and obligation owed by the business b. fixed cost fall under the…

A: Statement of financial position helps stakeholders to determine the net worth of the company it also…

Q: Which situation here might indicate a company has a low quality of earnings? The same accounting…

A: Quality of earnings represents the earnings of the company in proportion to the operating activities…

Q: the income statement error is discovered in the year of error, what action is to be done by the…

A: Solution Concept If the income statement error is discovered in the year of error then that error…

Q: The interim period is viewed as an integral part of the annual accounting period. b. The interim…

A: The correct option is (a) The interim period is viewed as an integral part of the annual accounting…

Q: IDENTIFY THE EFFECT OF THE FOLLOWING TRANSACTION TO THE RISK OF MATERIAL MISSTATEMENT TO FINANCIAL…

A: Material misstatements are errors or frauds that are being made in the financial statements to show…

Q: Which of the following is a valid assumption from an accounting perspective? O A company that has…

A: Accounting Principles: The principles or procedures that are required to prepare and report the…

Q: V at the top and ends with at the bottom. Had there been a loss for the In reviewing the income…

A: Balance : Balance in balance sheet means that the total of fixed and current asset is equal to the…

Q: Which of the following should show a profit in order for a financial institution to give a the…

A: When a financial institution has to provide a loan to the business, then it needs the financial…

Q: When a company pays its rent in advance, its balance sheet will refl ect a reduction in: A . assets…

A: A balance sheet is a financial statement that reports a company's assets, liabilities, and…

Q: If a business makes a gross profit during a financial or trading year ( select appropriate answer)…

A: Gross profit refers to the profit earned by an entity from selling the products and deducting the…

Q: What is the effect on liabilities, stockholder’s equity, revenues and net income if a company does…

A: Unearned revenue is that revenue which is received but not yet earned by the business. For example,…

Q: Assume a company has a $350 credit ( not cash) sale. How would the transaction appear if the…

A: Whenever there is a sale, it is shown on the income statement.   If it is a cash sale, then it is…

Q: Which of the following is an indication that a company may be recognizing revenue prematurely?…

A: Company may be recognizing revenue prematurely. relative to meets competitors due to receivables…

Q: Under what circumstances do companies recognize revenue at a point in time? Overa period of time?

A: