Question: MCQ AccountingWhen should the periodicity assumption be modified?a) Never underany circumstancesb) Only for quarterly reportingc) During start-up phase of seasonal businessesd) For all small businesses

Explanation of Periodicity Assumption: The periodicity assumption is a fundamental accounting…

Answered: Question: MCQ Accounting When should…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Activities Required In Completing A Quality Audit

Section: Chapter Questions

Problem 65RSCQ

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Which of the following shows how the year-end adjustment to recognize supplies expense will affect a company's financial statements? A. B. C. D. Assets = + - + Multiple Choice O O Balance Sheet Stockholders' Liabilities + Equity n/a n/a n/a n/a Option A Option D Option B Option C n/a n/a Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a + n/a + n/a Statement of Cash Flows n/a n/a -Operating Activity -Operating Activity
11. options are Accrual based accountingTime Period AssumptionFiscal yearAnnual Finanical statements
What is the relationship between current liabilities and a company's operating cycle? Select one: а. Current liabilities are the result of operating transactions. O b. There is no relationship between the two. O c. Liquidation of current liabilities is reasonably expected within the company's operating cycle (or one year if less). O d. Current liabilities can't exceed the amount incurred in one operating cycle.
Companies often voluntarily provide a pro forma earnings number when they announce annual or quarterly earnings. Required: 1. What is meant by the term pro forma earnings in this context? 2. How do pro forma earnings relate to the concept of earnings quality?
How should seasonal revenues be reported in an interim report? Multiple Choice Disclose the seasonal nature of business operations, and include a pro forma report for the next 12-month period. Disclose the seasonal nature of business operations but do not include other reports supplemental to the interim report. Disclose the seasonal nature of business operations and consider a report for the 12-month period ended at the interim date to supplement the interim report. The financial statements should be adjusted to reflect the assumption that no seasonal revenues could be recognized.
Listed below are the current Accounting Assumptions and Principles Economic Entity Assumption Monetary Unit Assumption Historical Cost Principle Going Concern Assumption Revenue Recognition Principle Full Disclosure Principle Time Period Assumption Matching Principle Required: For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable. a. In May 2021, Regent Corporation recorded as revenue $5,000 received in advance from a customer for a job that would be completed in June 2021. Violation: (Yes/No) Applicable Assumption/Principle: b. Sally Maze made sure to keep her personal expenditures separate from her marketing company books.…
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58. Profit & Loss account is prepared for a period of one year by following A.Periodicity concept B.Business entity concept c.Accrual concept D.None of the above
Which of the following disclosures is not required for a change from average cost to FIFO? Select one: O a. The nature of the change in accounting policy O b. The amount of the adjustment relating to periods before those presented O c. All of these are required. O d. Basic and diluted earnings per share for the current period and each prior period presented

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Question: MCQ Accounting When should the periodicity assumption be modified? a) Never under any circumstances b) Only for quarterly reporting c) During start-up phase of seasonal businesses d) For all small businesses