Century 21 Accounting Multicolumn Journal
11th Edition
ISBN: 9781337679503
Author: Gilbertson
Publisher: Cengage
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. A list of concepts is provided below in the left column, with descriptions of the concepts in the right column. There are more descriptions provided than concepts. Match the description to the concept.
________ Cash-basis accounting.
______ Fiscal year.
_______ Revenue recognition principle.
_______ Expense recognition principle.
(a) Monthly and quarterly time periods.
(b) Accountants divide the economic life of a business into artificial time periods.
(c) Efforts (expenses) should be recognized in the period in which a company consumes assets or incurs liabilities to generate accomplishments (revenues).
(d) An accounting time period that starts on January 1 and ends on December 31.
(e) An accounting time period that is one year in length.
(f) Companies record revenues when they receive cash and record expenses when they pay out cash.
(g) Companies record transactions in the period in which the events occur.
(h) Recognize revenue in the accounting period in which a performance…
The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or a year, is called a(n) _____.
The time period assumption assumes that a company prepares its financial statements every month.
True
False
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- Which of the following breaks down company financial information into specific time spans, and can cover a month, quarter, half-year, or full year? A. accounting period B. yearly period C. monthly period D. fiscal periodarrow_forwardRecent fiscal years for several well-known companies are as follows: Company Fiscal Year Ending J. C. Penney Company, Inc. January 27 L Brands, Inc. January 27 Sears Holdings Corporation January 27 Target Corporation January 27 The Home Depot, Inc. January 28 Tiffany Co. January 30 What general characteristic shared by these companies explains why they do not have fiscal years ending December 31?arrow_forwardWhich of the following could be a logical or realistic accounting period For a business that is creating financial statements? one month. 5-year period 6-month. Or 1 year.arrow_forward
- Which of the following is true regarding a fiscal year? Group of answer choices A. Companies can choose to end their fiscal year on any date they feel is most relevant, most likely coinciding with the natural business cycle. B. Companies must end their fiscal year on March 31, June 30, September 30 or December 31. C. Companies can select any date except a holiday to end their fiscal year. D. Companies must end their fiscal year on December 31.arrow_forwardThe life of a business is divided into specific time periods,usually a year, to measure results of operations for eachsuch time period and to portray financial conditions at theend of each period.(a) This practice is based on the accounting assumptionthat the life of the business consists of a series of timeperiods and that it is possible to measure accuratelythe results of operations for each period. Commenton the validity and necessity of this assumption.(b) What has been the effect of this practice on accounting?What is its relation to the accrual system?What influence has it had on accounting entries andmethodology?arrow_forwardThe balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company’s financial condition and performance. Cold Goose Metal Works Inc. is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet. Cold Goose Metal Works Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Year 1 Assets Liabilities and equity Current assets: Current liabilities: Cash and equivalents $4,612 Accounts payable $0 $0 Accounts receivable 2,109 1,688 Accruals 293 0 Inventories 6,187 4,950 Notes payable 1,660 1,562 Total current assets $14,062 $11,250 Total current liabilities $1,562 Net…arrow_forward
- An operating cycle: a. is twelve months or less in length. b. is the average time required for a company to collect its receivables c. is used to determine current assets when the operating cycle is longer than one year. d. begins with inventory and ends with cash Most companies record revenue when they ship goods to customers not when they are delivered to customers. (Choose only one word that makes the statement incorrect)arrow_forwardA fiscal period is any period of time covering a complete accounting cycle. A fiscal year consists of 12 consecutive months. The accounting cycle represents the sequence of steps in the accounting process completed during the fiscal period. Which of the following would be considered a fiscal year? (Select "Yes" for the items that are applicable and "No" for the items that do not apply) August 1, 20-- to November 30, 20-- January 1, 20-- to December 31, 20-- May 1, 20-- to April 30, 20-- July 1, 20-- to June 30, 20--arrow_forwardYou are the chief accountant for Bengal Products Inc. Your junior accountant has prepared an income statement for the current year and prepared the following additional information by analyzing changes in the company's balance sheet accounts. "Calculation is attached in as image" Changes in the company's balance sheet accounts over the year are summarized as follows:1. Accounts receivable decreased by $85,000.2. Accrued Interest Receivable increased by $15,000.3. Inventory decreased by $280,000.4. Accounts payable related to suppliers of merchandise decreased by $240,000.5. Short-term prepayments of operating expenses decreased by $18,000.6. Accrued liabilities for operating expenses increased by $35,000.7. Liability for accrued interest payable decreased by $16,000.8. Liability for accrued income taxes payable increased by $25,000.9. As an investment, $120,000 of marketable securities were purchased during the year.10. Marketable securities with a book value of $210,000 were sold.11.…arrow_forward
- Explain how interim financial statements areprepared in a business that closes its accountsonly at year-end.arrow_forwardChoose from the following list of terms and phrases to best complete the statements below. a. Fiscal year c. Accrual basis accounting e. Cash basis accounting b. Timeliness d. Annual financial statements f. Time period assumption 1. presumes that an organization’s activities can be divided into specific time periods. 2. Financial reports covering a one-year period are known as . 3. A(n) consists of any 12 consecutive months. 4. records revenues when services are provided and records expenses when incurred. 5. The value of information is often linked to its .arrow_forwardWhich of the following is true? A. Companies can select any day except a holiday to end their fiscal year. B. Companies must end their fiscal year on March 31, June 30, September 30, or December 31. . The U.S. government will assign each company a fiscal year. D. Companies can choose to end their fiscal year on any date, usually during a low point in the business cycle .arrow_forward
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