Accounting information is considered to be relevant when it: Question 16 options: is verifiable and neutral. is understandable by reasonably informed users of accounting information. is capable of making a difference in a decision by the user. is received soon after events and transactions have occurred. Net income represents: Question 17 options: revenues and gains less expenses and losses from continuing and discontinued operations. net income plus/minus other comprehensive income. revenues and gains less expenses and losses from continuing operations. ongoing revenues and expenses before gains, losses, and discontinued operations.

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Answered: Accounting information is considered to…

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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Revenue is recognized for accounting purposes when a performance obligation is satisfied. In some situations, revenue is recognized over time as the fair values of assets and liabilities change. In other situations, however, accountants have developed guidelines for recognizing revenue at the point of sale. Questions: 1. Explain and justify why revenue is often recognized at the time of sale. 2. Explain in what situations it would be appropriate to recognize revenue over time.
Match the following situations or statements with the correct assumption or principle. Financial Statements must be prepared at defined equal time intervals A company is assumed to continue its activity in order to fulfill objectives and commitments All important financial information must be reported or revealed. The value of an asset will be kept unchanged regardless of changes in the assets fair value. Expenses are recorded in the same period when they help generate revenues. Choose... Choose... Going concern assumption Periodicity assumption Expense recognition principle Historical cost principle Full disclosure principle Choose... Choose... =
The “matching” principle in accounting refers to: Group of answer choices d. None of the above a. Aligning General Ledger account titles with business transactions c. Recognizing revenue and related expenses in the same period. b. Financing short term assets with short term financing
Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The Conceptual Framework examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions a. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation. 3. Understandability. 4. Comparability (consistency). 5. Neutrality. b. b. For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other. 1. Relevance and faithful representation. 2. Relevance and consistency. 3. Comparability and consistency.…
Please answer with reason for all why the option is correct and why the other options are incorrect.. Accounting type Question: A Trial Balance shows A. The balance of Profit and Loss Account B. Complete accuracy of accounting done by the accountant C. Arithmetical accuracy of ledger balances D. Balance between assets and liabilities Answer: Option C
i Scenarios - a. Company A increases the allowance for doubtful accounts (ADA). Using the old estimate, ADA would have been $40,000. The new estimate is $45,000. X b. Company B omitted to record an invoice for a(n) $8,000 sale made on credit at the end of the previous year and incorrectly recorded the sale in the current year. The related inventory sold has been accounted for. c. Company C changes its revenue recognition to a more conservative policy. The result is a decrease in prior-year revenue by $3,000 and a decrease in current-year revenue by $4,000 relative to the amounts under the old policy.

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	is verifiable and neutral.
	is understandable by reasonably informed users of accounting information.
	is capable of making a difference in a decision by the user.
	is received soon after events and transactions have occurred.

	revenues and gains less expenses and losses from continuing and discontinued operations.
	net income plus/minus other comprehensive income.
	revenues and gains less expenses and losses from continuing operations.
	ongoing revenues and expenses before gains, losses, and discontinued operations.