CHAPTER 3 TRUE-FALSE STATEMENTS 1. Many business transactions affect more than one time period. 2. The time period assumption states that the economic life of a business entity can be divided into artificial time periods. 3. The time period assumption is often referred to as the expense recognition principle.
CHAPTER 3 TRUE-FALSE STATEMENTS 1. Many business transactions affect more than one time period. 2. The time period assumption states that the economic life of a business entity can be divided into artificial time periods. 3. The time period assumption is often referred to as the expense recognition principle.
CHAPTER 3 TRUE-FALSE STATEMENTS 1. Many business transactions affect more than one time period. 2. The time period assumption states that the economic life of a business entity can be divided into artificial time periods. 3. The time period assumption is often referred to as the expense recognition principle.
CHAPTER 3 TRUE-FALSE STATEMENTS 1. Many business transactions affect more than one time period. 2. The time period assumption states that the economic life of a business entity can be divided into artificial time periods. 3. The time period assumption is often referred to as the expense recognition principle. 4. A company's calendar year and fiscal year are always the same. 5. Accounting time periods that are one year in length are referred to as interim periods. MULTIPLE CHOICE QUESTIONS 1. Monthly and quarterly time periods are called a. calendar periods. b. fiscal periods. c. interim periods. d. quarterly periods. 2. The time period assumption states that a. a transaction can only affect one period of time. b. estimates should not be made if a transaction affects more than one time period. c. adjustments to the enterprise's accounts can only be made in the time period when the business terminates its operations. d. the economic life of a business can be divided into artificial time periods. 3. An accounting time period that is one year in length, but does not begin on January 1, is referred to as a. a fiscal year. b. an interim period. c. the time period assumption. d. a reporting period. 4. Under accrual-basis accounting a. cash must be received before revenue is recognized. b. net income is calculated by matching cash outflows against cash inflows. c. events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. d. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under IFRS. 5. Adjusting entries are required a. yearly. b. quarterly. c. monthly. d. every time financial statements are prepared. CHAPTER 4 MATCHING Match the items below by entering the appropriate code letter in the space provided. A. Worksheet F. Share CapitalOrdinary B. Permanent accounts G. Current assets C. Closing entries H. Operating cycle D. Income Summary I. Non-current liabilities E. Reversing entry J. Correcting entries _____ 1. Obligations that a company expects to pay after one year. _____ 2. A part of equity in a corporation. _____ 3. An optional tool which facilitates the preparation of financial statements. _____ 4. A temporary account used in the closing process. _____ 5. Statement of financial position accounts whose balances are carried forward to the next period. _____ 6. The average time that it takes to go from cash to cash in producing revenues. _____ 7. Entries to correct errors made in recording transactions. _____ 8. The exact opposite of an adjusting entry made in a previous period. _____ 9. Entries at the end of an accounting period to transfer the balances of temporary accounts to Retained Earnings. _____ 10. Assets that a company expects to pay or convert to cash or use up within one year. COMPLETION STATEMENTS 1. The first step in preparing a worksheet is to prepare a ______________ from the general ledger accounts. 2. The account balances appearing in the adjusted trial balance columns are extended to the ______________ columns and the ______________ columns. : 3. The process of transferring net income (or loss) for the period to Retained Earnings is accomplished by making ______________ entries. 4. At the end of an accounting period, all revenue and expense accounts are closed to a temporary account called ______________. 5. The Dividends account is closed to the ______________ account at the end of the accounting period.
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
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