C. a past period of time - The time frame associated with an income statement is:
a. a point in time in the past.
b. a future period of time.
c. a past period of time.
d. a function of the information included in it.
is frequently selected based on the firm's operating cycle. - A fiscal year:
a. is frequently selected based on the firm's operating cycle.
b. must always end on the same date each year.
c. must end on the last day of a month.
d. is always the same as the calendar year.
a. is designed to match revenues and expenses. - Accrual accounting:
a. is designed to match revenues and expenses.
b. means that expenses are recorded when they are paid.
c. cannot result in the entity having net income unless cash is received from customers.
d. results in the balance sheet showing the fair value of the entity's assets.
D. All of the above - The balance sheet equation can be represented by:
A. Assets = Liabilities + Stockholders' Equity
B. Assets - Liabilities = Stockholders' Equity
C. Net Assets = Stockholders' Equity
,D. All of the above.
C. The entity's account - Transactions are summarized in:
A. The notes for the financial statements.
B. The independent auditor's opinion letter.
C. The entity's accounts.
D. None of the above.
A. Statement of Financial Position. - The balance sheet might also be called:
A. Statement of Financial Position.
B. Statement of Assets.
C. Statement of Changes in Financial Position.
D. None of the above.
a. an adjustment will probably be required as supplies are used. - When a firm purchases supplies for its
business:
a. an adjustment will probably be required as supplies are used.
b. either the supplies account or the supplies expense account should be credited.
c. the supplies expense account should always be debited.
d. the supplies account should always be debited.
D. is based on when the asset is expected to be converted to cash, or used to benefit the entity. - The
distinction between a current asset and other assets:
A. is based on how long the asset has been owned.
B. is based on amounts that will be paid to other entities within a year.
,C. is based on the ability to determine the current fair value of the asset.
D. is based on when the asset is expected to be converted to cash, or used to benefit the entity.
D. shows amounts that are not adjusted for changes in the purchasing power of the dollar. - The balance
sheet of an entity:
A. shows the fair value of the assets at the date of the balance sheet.
B. reports plant and equipment at its opportunity cost.
C. reflects the impact of inflation on the replacement cost of the assets.
D. shows amounts that are not adjusted for changes in the purchasing power of the dollar.
D. accurately reflecting the results of operations for a fiscal period. - Matching revenues and expenses
refers to:
A. having revenues equal expenses.
B. recording revenues when cash is received.
C. recording revenues when a product is sold or a service is rendered.
D. accurately reflecting the results of operations for a fiscal period.
B. shows how cash changed during the period - The Statement of Cash Flows:
A. shows the change in the fair value of the entity's common stock during the period.
B. shows how cash changed during the period.
C. shows the dividends that will be paid in the future.
D. is an optional financial statement.
B. increase the balance of an expense account. - A debit entry will:
A. always decrease the account balance.
, B. increase the balance of an expense account.
C.always increase the account balance.
D. increase the balance of a revenue account.
C. increase the accuracy of both the balance sheet and income statement. - The effect of an adjustment
on the financial statements is usually to:
A. match revenues and assets.
B. make the balance sheet balance.
C. increase the accuracy of both the balance sheet and income statement.
D. increase net income.
A. Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses − Dividends
- An expanded version of the accounting equation could be:
A. Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues − Expenses − Dividends
C. Assets − Liabilities = Paid-in Capital − Revenues − Expenses
D. Assets = Liabilities + Paid-in Capital − Revenues + Expenses
A. increase a liability account - A credit entry will:
A. increase a liability account
B. decrease paid-in capital.
C. increase an expense account.
D. increase an asset account.
D. to increase the accuracy of the financial statements. - The effect of an adjustment is:
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