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Insurance expense, unearned rent revenue, sales, prepaid rent expense and account payable are typical accounts that will be found in adjusting journal entries. (True/False)

Insurance expense, unearned rent revenue, sales, prepaid rent expense and account payable are typical accounts that will be found in adjusting journal entries. (True/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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Enable Editin IEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. 1) Insurance expense, unearned rent revenue, sales, prepaid rent expense and accounts payable are typical accounts that will be found in adjusting journal entries. (True/False) 2) Red Company has been using LIFO to value inventory since its inception. In the current period, the company decides to switch from LIFO to average cost. This procedure violates both comparability and consistency. (True/False) 3) Consolidations occurs when an investor company purchases 51% or more of the investee's common stock. In a consolidation there is always one parent company and one subsidiary company. Consolidated financial statements are prepared as a result of the economic entity assumption. (True/False) 4) Investments in equity securities can be either a short-term or long-term asset. These investments can be classified as either trading securities or available-for-sale securities. (True/False) 5) Legal fees is an operating expense. Legal fees can be further broken down as a selling expense or as an administrative expense. (True/False) 6) Recognition of financial information can only be recognized in the body of financial statements. Disclosure of financial information can take place either in the body of financial statements or in footnotes to financial statements. (True/False) 7) Kevin wants to have a retirement fund of $750,000. He plans on retiring at age 65. Kevin will invest an annuity amount on his birthday from age 55 through 64. The fund will earn interest at a rate of 8%. Calculate the annuity amount to be invested in order for Kevin to achieve his goal. 8) Stacy purchases equipment on January 1, 2021.According to the contract, Stacy must make annuity payments of $6,000 starting on January 1, 2022 through January 1, 2028. Assume an interest rate of 5%. Calculate the cost of the equipment. 1. 1263 words D Focus Type here to search
Transcribed Image Text:Enable Editin IEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. 1) Insurance expense, unearned rent revenue, sales, prepaid rent expense and accounts payable are typical accounts that will be found in adjusting journal entries. (True/False) 2) Red Company has been using LIFO to value inventory since its inception. In the current period, the company decides to switch from LIFO to average cost. This procedure violates both comparability and consistency. (True/False) 3) Consolidations occurs when an investor company purchases 51% or more of the investee's common stock. In a consolidation there is always one parent company and one subsidiary company. Consolidated financial statements are prepared as a result of the economic entity assumption. (True/False) 4) Investments in equity securities can be either a short-term or long-term asset. These investments can be classified as either trading securities or available-for-sale securities. (True/False) 5) Legal fees is an operating expense. Legal fees can be further broken down as a selling expense or as an administrative expense. (True/False) 6) Recognition of financial information can only be recognized in the body of financial statements. Disclosure of financial information can take place either in the body of financial statements or in footnotes to financial statements. (True/False) 7) Kevin wants to have a retirement fund of $750,000. He plans on retiring at age 65. Kevin will invest an annuity amount on his birthday from age 55 through 64. The fund will earn interest at a rate of 8%. Calculate the annuity amount to be invested in order for Kevin to achieve his goal. 8) Stacy purchases equipment on January 1, 2021.According to the contract, Stacy must make annuity payments of $6,000 starting on January 1, 2022 through January 1, 2028. Assume an interest rate of 5%. Calculate the cost of the equipment. 1. 1263 words D Focus Type here to search
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