Chapter 2, Problem 17P

If the credit subtotal is greater than the debit subtotal in the income statement columns of a worksheet, the difference a. Indicates that the company incurred an operating loss during the period b. Could represent payment of dividends by the entity during period c. Indicates that an error has been made in the accounting process d. Indicates that the company earned a net income during period

which of the following is FALSE regarding a firm's financial statements? Inventory is part of current assets Accounts receivable represents the value of goods that were sold to customers, for which the company has not yet been paid The balance sheet shows the value of a company's assets and liabilities at a point in time The income statement shows a company's income and expenses over a period of time  the balance sheet and income statement information can be used to calculate the market value of the common stock

Sprint's junior accountant is analyzing how the two entries recorded in connection with the recovery of an uncollectible account affect the elements of the financial statement? (Consider the effect of both entries taken together) A. No effect on total assets or stockholders' equity. B. Increase stockholders' equity. C. Decrease total assets. D. Increase total assets and stockholders' equity.

Consider the following transactions associated with accounts receivable and the allowance for uncollectible accounts.Required:For each transaction, indicate whether it would increase (I), decrease (D), or have no effect (NE) on the account totals. (Hint: Make sure the accounting equation, Assets = Liabilities + Stockholders’ Equity, remains in balance after each transaction.)

Which of the following statements would be consideredtrue regarding the balance sheet?a. One cannot determine the true current value of a company by reviewing just its balance sheet.b. The balance sheet reports assets only if they have beenacquired through identifiable transactions.c. A balance sheet shows only the ending balances, in asummarized format, of balance sheet accounts in theaccounting system as of a particular date.d. All of the above.

On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets? Mutiple Choice   Decrease in net income; no effect on total assets.    No effect on net income; no effect on total assets.   Decrease in net income; decrease in total assets.   Increase in net income; no effect on total assets.   No effect on net income; decrease in total assets

Under the allowance method for uncollectible receivables, the entry to record uncollectible-account expense has what effect on the financial statements?a. Decreases assets and has no effect on net incomeb. Increases expenses and increases stockholders’ equityc. Decreases net income and decreases assetsd. Decreases stockholders’ equity and increases liabilities

Why is it expected that the initial debit and credit totals of the income statement accounts do not balance on a 10-column worksheet? Select one: a. None of the choices available. b. This is expected because the company should report an asset. c. This is not expected and it shows that there is definitely an error made. d. This is expected because the company should report an income or a loss.

If the statement of financial position error is discovered in the year of error, what action is to be done by the entity? Ignore the Reclassify the item to its proper real account. Adjust the effect to the retained earnings account. Reclassify the item to nominal account.