14. Which of the following statement is not correct as to why an entity must make adjusting entries? A. To prepare reliable income statement and statement of financial position B. To ensure that the revenue recognition and expense recognition principles are followed C. To prepare for closing and reversing entries D. To account for accruals and deferrals

Q: Economic Entity Assumption   Monetary Unit Assumption   Historical Cost Principle             Going…

A: Principles of Accounting : These are the rules of accounting which are known as GAAP's (Generally…

Q: Which of the following is a distinguishing characteristic of an adjusting entry for deferrals?…

A: Deferrals are transactions recognized in financial statements in a later period than when they…

Q: Recording of next year's purchases as purchases of the current year will O understate net income of…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: I only С. Both I and II а. II only d. Neither I nor II

A: Answer is 'A'

Q: If it is material, which of the following does not require all prior reported financial statements…

A: IAS 8 prescribes the criteria for change in accounting estimates, accounting policies and errors. It…

Q: Why does the accruals that involve internal transactions require adjusting entries?

A: Adjusting entries are internal transactions that update account balances in accordance with accrual…

Q: Under SFAS 130, Reporting Comprehensive Income, corrections of errors are reported in

A: Correction of error includes rectify the wrong entry recorded in previous year or year before that.…

Q: According to accruals rules, when a service is performed, the revenue should be recognized…

A: Solution- Accrual accounting is an accounting method whereby revenue and expenses are recorded in…

Q: 11. In the preparation of the worksheet, if the total credits are greater than total debits under…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: What is false about the matching principle? a. Incurred expenses should be matched with earned…

A: Matching principles are those principles which emphasize on matching of revenues of the business…

Q: What transaction requires an adjusting entry debit to unearned revenue

A: Adjusting Entries: Adjusting entries are those which are recorded at the end of the accounting year.…

Q: y are adjusting e

A: Adjusting entries are necessary for accrual accounting to ensure that financial statements correctly…

Q: Deferred revenues represent liabilities recorded when cash is received from customers in advance of…

A: Adjusting entries:Adjusting entries are the journal entries, which are recorded at the end of the…

Q: The following statement An entity presents on a net basis gains and losses arising from a group of…

A: Answer is POINT 'C'

Q: If the statement of financial position error is discovered in the year of error, what action is to…

A: Errors mean the data entered in the financial system is not as per accounting standard. There has…

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: Choose the letter of the correct answer.

A: Accounting policies refer to the specific accounting principles and the methods of applying those…

Q: How do the principles of revenue recognition under the International Financial Reporting Standards…

A: Revenue recognition is a critical component in financial accounting, determining when and how…

Q: Which type of accounting change should always be accounted for in current and future periods?…

A: Change in accounting policy and reporting entity should not be accounted in current and future…

Q: Which of the following statements is not true of the accrual basis of accounting? O a. The accrual…

A: As per accrual basis of accounting the revenue and expense should be recognised as and when accrued.…

Q: What is the indirect effect of a change in accounting policy? Briefly describe the approach to…

A: Here is the answer :

Q: What accounting principle requires that revenues, and the related costs incurred to generate those…

A: Revenue: It is the amount of money earned by an entity by selling goods or providing…

Q: accruals

A: Under Accrual concept, revenue is recognized when it is earned and expense is recognized when it is…

Q: Using IFRS, how should prior period errors that are discovered in a subsequent reporting period be…

A: IFRS: They are commonly known as IFRS. It is a set of accounting standards which are developed by…

Q: How should a change in accounting estimate be recognized and disclosed in the financial statements?

A: As per IAS 8 Accounting policies, changes in accounting estimates and errors an accounting estimate…

Q: If the adjustment for unearned revenues is not recorded O a. net income will be correctly stated. O…

A: Lets understand the basics. Adjustment entry is need to pass at year end to follow matching…

Q: Explain an example to record the adjusting entry for accrued revenue.

A: Adjusting Entry: An adjusting entry is a journal entry passed at the end of a financial period to…

Q: For each of the tollowing transactions or adjustments, indicate the effect of the transaction or…

A: Balance sheet: It is a statement which reports both assets and liabilities as on a particular date…

Q: If the statement of financial position error is discovered in a subsequent accounting period, what…

A: The error in the financial statement could be cause due to any mathematical mistakes or other…