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17. Statement 1: Unexpended balance of petty cash and change fund are considered as "cash on hand" Statement 2: Consigned foods although these are within the premise of our business are excluded in the physical inventory count. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false

17. Statement 1: Unexpended balance of petty cash and change fund are considered as "cash on hand" Statement 2: Consigned foods although these are within the premise of our business are excluded in the physical inventory count. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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17. Statement 1: Unexpended balance of petty cash and change fund are considered as "cash on hand" Statement 2: Consigned foods although these are within the premise of our business are excluded in the physical inventory count. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 18. Statement 1: Liabilities represent the claims of various creditors over the Assets of the business. Statement 2: Advance payment made by the customer for undelivered goods is treated as a liability. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 19. Statement 1: Accounts payable is usually called "Trade payable" because there is a named-payee whenever we make payment. Statement 2: Owner's Equity is similar to Capital, Proprietorship, Proprietary interest, and Net worth. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 20. Statement 1: Statement of Comprehensive Income was previously known as "Income Statement". Statement 2: Statement of Comprehensive Income tells us whether the business makes profit or incur a loss. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 21. Statement 1: Revenue and Expenses are temporary accounts of an Owner's Equity. Statement 2: Revenue and expenses are closed at the end of the accounting period. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false
Transcribed Image Text:17. Statement 1: Unexpended balance of petty cash and change fund are considered as "cash on hand" Statement 2: Consigned foods although these are within the premise of our business are excluded in the physical inventory count. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 18. Statement 1: Liabilities represent the claims of various creditors over the Assets of the business. Statement 2: Advance payment made by the customer for undelivered goods is treated as a liability. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 19. Statement 1: Accounts payable is usually called "Trade payable" because there is a named-payee whenever we make payment. Statement 2: Owner's Equity is similar to Capital, Proprietorship, Proprietary interest, and Net worth. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 20. Statement 1: Statement of Comprehensive Income was previously known as "Income Statement". Statement 2: Statement of Comprehensive Income tells us whether the business makes profit or incur a loss. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 21. Statement 1: Revenue and Expenses are temporary accounts of an Owner's Equity. Statement 2: Revenue and expenses are closed at the end of the accounting period. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false
22. Statement 1: Statement of Comprehensive Income accounts are also known as “nominal accounts" Statement 2: The normal balance of Revenue or income account is credit while the Expense is debit. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 23. Statement 1: Revenue decreases Owner's Equity. Conversely, Expense increases Owner's Equity. Statement 2: Profit and loss are closed to Owner's Equity. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 24. Statement 1: Statement of Comprehensive Income is dated "for the period ended". Statement 2: In the multiple step form of Statement of Comprehensive Income preparation, operating expenses are directly deducted from Sales revenue to arrive at Profit. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 25. Statement 1: Service concern usually follows the single step form of Income Statement while Merchandising concern follows a multi-step form. Statement 2: Operating expenses are classified into functional and natural expense. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 26. Statement 1: The revenue that derived from a service company is “Service Revenue", while the revenue derived from Merchandising business is "Sales Revenue" Statement 2: Gross profit is arrive at by deducting Sales from Cost of Sales or Cost of Goods sold. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false
Transcribed Image Text:22. Statement 1: Statement of Comprehensive Income accounts are also known as “nominal accounts" Statement 2: The normal balance of Revenue or income account is credit while the Expense is debit. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 23. Statement 1: Revenue decreases Owner's Equity. Conversely, Expense increases Owner's Equity. Statement 2: Profit and loss are closed to Owner's Equity. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 24. Statement 1: Statement of Comprehensive Income is dated "for the period ended". Statement 2: In the multiple step form of Statement of Comprehensive Income preparation, operating expenses are directly deducted from Sales revenue to arrive at Profit. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 25. Statement 1: Service concern usually follows the single step form of Income Statement while Merchandising concern follows a multi-step form. Statement 2: Operating expenses are classified into functional and natural expense. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false 26. Statement 1: The revenue that derived from a service company is “Service Revenue", while the revenue derived from Merchandising business is "Sales Revenue" Statement 2: Gross profit is arrive at by deducting Sales from Cost of Sales or Cost of Goods sold. a. Both statements are true b. Only Statement 1 is true c. Only Statement 2 is true d. Both statements are false
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