When analyzing an income statement, which of the following statements is true?Multiple ChoiceDepreciation is a non cash item on the income statement.Generally accepted accounting principles (GAAP) require that income is reported when it is earned, even though no cash flowmay have occured.JhyCompanies try ot make costs variable with sales as much as possible

Accounting Principles -Accounting principles are the standard operating procedures and rules…

Answered: Multiple Choice Depreciation is a non…

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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Technically, offsetting in financial statements is accomplished when a. Gains or losses from disposal of non-current assets are reported by deducting from the proceeds the carrying amount of the assets and the related selling expenses. b. The accumulated depreciation is deducted from property, plant and equipment. c. The allowance for bad debts is deducted from accounts receivable. d. The total liabilities are deducted from total assets to arrive at net assets
Why is depreciation on the income statement different from the depreciation on the balance sheet?
Question: What is the purpose of depreciation in accounting? a. Increase asset value b. Allocate the cost of an asset over its useful life c. Reduce liabilities d. Determine net income
The cost of new non-current assets is a cash payment not an expense in the statement of profit or loss? True False
What is the accounting treatment for discontinued operations? A : It is reported at its gross amount as an "other revenue or gain" or "other expense or loss". B : It is reported as an "other revenue or gain" or "other expense and loss", net of tax. C : It only needs to be disclosed in the footnotes of the financial statements. D : It may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss).
Which of the following is NOT true? Accrual accounting requires expenses to be recorded when they are incurred, whether or not they have been paid. O Unearned revenue is a liability before it is earned. Interest paid is a financing cash outflow on the statement of cash flows. O The gain on the sale of land is determined by subtracting the original cost of the land from the cash received on the sale. Depreciation expense is never a cash outflow.
Sometimes, for the fixed assets of certain businesses, the balance in Accumulated Depreciation is equal to the cost of the asset. a. Can one record additional depreciation on the assets if the assets are still useful to the business? b. Why? Explain: c. Also, when can such a business make an entry to remove the cost and accumulated depreciation of the fixed assets from the account?
Please answer clearly and thoroughly1) On the RE Statement it shows the Net Income, if there is a loss will it show Net Loss?2) How do you configure the Net Income or Net Loss amount?
What type of account is "Accumulated Depreciation"? a) Expense b) Contra asset c) Liability d) Revenue
True or False: Under the accrual accounting method, revenue is recognized when cash is received, regardless of when the goods or services are delivered.
Can stright line depreciation method be used to manage earnings. Explain

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Multiple Choice Depreciation is a non cash item on the income statement. Generally accepted accounting principles (GAAP) require that income is reported when it is earned, even though no cash fi may have occured.