Which of the following statements is a usefulness of the income statement?A.Evaluate the past performance of the enterprise.O B.Income measurement involves judgment.OCItems that cannot be measured reliably are not reported.O D.Income numbers are affected by the accounting methods employed.

For the purpose of business analysis, accounting is important for the business. Accounting is the…

Answered: Which of the following statements is a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 23MC: Which of the following accounts would not be reported under revenue on a simple income statement? A....

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Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Which of the following is considered a constraint on useful information by Statement of Financial Accounting Concepts No. 8? a. benefits costs b. conservatism c. timeliness d. verifiability
Determine the effect of the following errors on a companys total revenue, total expenses, and net income. Indicate the effect by writing O for Overstated (too much), U for Understated (too little), or NA for Not Affected.
If a company capitalizes costs that should be expensed, how is its income statement for the current period impacted? A. Assets understated B. Net Income understated C. Expenses understated D. Revenues understated
How are unusual or infrequent gains or losses reported on a company's income statement?
Which of the following does not accurately represent the accounting equation? A. B. C. D.
In general, how does the income statement help satisfy the objectives of financial reporting?
What are the effects of the following transactions on the accounting equation? Indicate an increase (+) or decrease () under the affected asset, liability, and owners equity headings.
Which of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
Which is the only ratio required to be reported on the face of a companys financial statements? What are the two ways the ratio is required to be reported?

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Which of the following statements is a usefulness of the income statement? OA. Evaluate the past performance of the enterprise. OB. Income measurement involves judgment. OC Items that cannot be measured reliably are not reported. OD. Income numbers are affected by the accounting methods employed.