Mthembu is a financial accounting student at Mancosa involved in an internship at Inca Financial Company. The supervisor want to test his knowledge of the financial statements and asked him to identify which of the statements below is false? O A. The financial result of an enterprise is a measure of the profit or loss that the enterprise made over a certain period of time OB. Assels are the possessions of a business that have monetary value OC. A Statement of Comprehensive income shows the financial position of an entity on a certain date OD. Liabilities are the obligations of an entity

Mthembu is a financial accounting student at Mancosa involved in an internship at Inca Financial Company. The supervisor want to test his knowledge of the financial statements and asked him to identify which of the statements below is false? O A. The financial result of an enterprise is a measure of the profit or loss that the enterprise made over a certain period of time OB. Assels are the possessions of a business that have monetary value OC. A Statement of Comprehensive income shows the financial position of an entity on a certain date OD. Liabilities are the obligations of an entity

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter4: Gross Income

Section: Chapter Questions

Problem 19P

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True or False for the following statements: 1. Accounting can be defined as an information system that provides reports to users about the economic activities and condition of a business. 2. An account receivable is typically classified as a revenue, not an asset. 3. The allowance for doubtful accounts is an estimate based on past experience of the corporation. 4. Using FIFO method to calculate inventory can decrease tax payment. 5. The accounting equation can be expressed as Assets - Liabilities = Owner's Equity 6. If the liabilities owed by a business total S300,000 and owners equity is equal to $300,000, then the assets also total $300,000. 7. An account receivable is a claim against a customer arising from a sale on account. 8. The unit of measure concept requires that economic data be recorded in a common unit of measurement like RMB and U.S. dollar. 9. Paying off an account payable increases liabilities. 10. The normal balance of cash account is a debit.
The following statement suits best the definition of ASSETS: a. The assets are expenses incurred by the business in each period O b. The assets are contributions made by the owners of the business O c. The assets are debts which are borrowed from banks to purchases non-current assets O d. The assets are resources owned or owing to the business from which future benefits are expected to flow to the business
Please answer with reason for all why the option is correct and why the other options are incorrect................ 1. Accounting provides information on A. Cost and income for managers B. Company's tax liability for a particular year c. Financial conditions of an institutions D. All of the above.............. 2. The long term assets that have no physical existence but are rights that have value is known as A.Current assets B.Fixed assets C.Intangible assets D.Investments............. 3.The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as A.Current assets B.Fixed assets c.Intangible assets D.Investment
Which one of the following is not among the conditions that will qualify a situation, particular action or set of circumstances as an accountable event? A. It changes (increases or decreases) one or more elements of the financial position of a business enterprise B. The event has already happened C. It must be capable of money measurement with a reasonable degree of precision D. There must be a value received and a value parted with between two parties
Financial accounting can also be described as a way to a. Tell the financial story of a company.b. Calculate the amount of taxes owed to the government.c. Determine employee satisfaction with their work environment.d. Measure the personal net worth of stockholders.
Choose the incorrect statement:a.) The objective of the external financial statements is to communicate the economic effects of completed transactions and other events on the entity.b.) The practice of accounting requires considerable professional judgment.c.) Security analysis use information form financial statements and other sources to projects future earnings.d.) The assessment of earning quality has become an exact science.
a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?
Choose the letter of the best answer. Write the chosen letter on a separate sheet of paper. 1. These are the costs being incurred by the business in generating revenues a. Assets b. Expenses c. Liabilities d. Owner's Equity 2. An asset account that represents the amount of money owed by the customer to the business is c. Cash a. Accounts Payable b. Accounts Receivable d. Inventories 3. These are present obligations of an entity arising from past transactions or events c. Liabilities d. Revenues 4. These are resources controlled by the business as a result of past transactions and events and from a. Assets b. Expenses which future economic benefits are expected to flow to the business a. Assets c. Liabilities d. Revenues b. Expenses 5. It refers to open account which represent the amount of money owed by the business to creditor or suppliers a. Accounts Payable c. Prepaid Expenses b. Accounts Receivable d. Unearned Revenues 6. This represents earnings made by professionals or experts…
Define the measurement principle. Select one: a. Requirement that accounting records should all be reported in a single currency. O b. Assumption that a business will continue to operate into the foreseeable future. O c. Accounting for purchases must be at their original cost. d. Transactions should be recorded on the basis of objective evidence where different people looking at the evidence would all arrive at the same conclusion.
Which of the following is true of financial accounting information? Select one: a.It focuses on the past-oriented financial performance of a company. b.It is primarily used by managers to make internal business decisions. c.It is prepared based on cost-benefit analysis. d.It only measures the cash transactions of a company.
The concept of materiality is one of the most basic principles underlying financial accounting.a. Answer the following questions:1. Why is the materiality of a transaction or an event a matter of professional judgment?2. What criteria should accountants consider in determining whether a transaction or anevent is material?3. Does the concept of materiality mean that financial statements are not precise, down tothe last dollar? Does this concept make financial statements less useful to most users?b. Avis Rent-a-Car purchases a large number of cars each year for its rental fleet. The cost ofany individual automobile is immaterial to Avis, which is a very large corporation. Would itbe acceptable for Avis to charge the purchase of automobiles for its rental fleet directly toexpense, rather than to an asset account? Explain.