Companies that use GAAP O do not have any guidelines as to what should be reported on their balance sheet. often offset assets against liabilities and report net assets and net liabilities on the balance sheet rather than the underlying detailed line items. O generally reported current assets before non-current assets on their balance sheet. O may report all their assets on their balance sheet at fair value.

Companies that use GAAP O do not have any guidelines as to what should be reported on their balance sheet. often offset assets against liabilities and report net assets and net liabilities on the balance sheet rather than the underlying detailed line items. O generally reported current assets before non-current assets on their balance sheet. O may report all their assets on their balance sheet at fair value.

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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Porite Company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the account receivable is collected in cash. Porite's practice is an example of: Multiple Choice O Economic entity. The matching principle. Accrual accounting. Cash basis accounting.
2) Accounts receivable erroneously debited to note receivable Effect on retained earnings -Since these are asset accounts there exists no effect on net income of the entity. Can you explain this? Should it be retained earnings instead of net income?
Which of the following statements is correct? Options: • Prepayments of supplies initially recorded as asset will be adjusted at the end of the period as debit to unused supplies the portion that remains unused • Prepayments of interest expense under asset method should be recorded as debit to unearned interest • If unpaid expenses incurred during the accounting period are not accrued, the income for the period will be overstated • There is no provision for depreciation in cash basis accounting because there is no actual cash involved
Which of the following is NOT TRUE about the basic and additional financial statements a) Revenues and expenses to generate these revenues plus other revenues and prepaid expenses are presented on the Income Statementb) They are all prepared according to the accrual basis of accounting except the statement of cashflowsc) Statement of financial position is another name for the balance sheetd) Assets are presented on the asset side of the statement of financial position; whereas the financial sources of assets are presented on the liabilities & equity side
What is the effect on liabilities, stockholder’s equity, revenues and net income if a company does not make an unearned revenue adjusting entry? Explain with suitable examples
What’s the correct answer?
If an entity prepares restated financial statements in accordance with the requirements of IAS29, the gain or loss on the entity's net monetary position is shown in other comprehensive income. True False
Accrued revenues are ordinarily listed on the balance sheet as current liabilities. True False
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