The reason that both expenses and dividends are recorded by debit entries is that: Multiple Choice The phrasing of the statement in the question is not correct; expensesare recorded by debits, but dividends are recorded by credits to the owners' equity account. All dividend and expense transactions involve offsetting credit entries to theCash account. Both expenses and dividends reduce owners' equity. Both expenses and dividends are offset against revenues in the income statement.

Expenses represent the costs incurred by a business in its normal operating activities to generate…

Answered: The reason that both expenses and…

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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Accrual basis accounting: Multiple Choice O O O Recognizes expenses when paid in cash. Is flawed because it gives complete Information about cash flows. Recognizes revenues when received in cash. Eliminates the need for adjusting entries at the end of each period. Increases the comparability of financial statements from period to period.
Identify the statement below that is correct: Multiple Choice Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts. The left side of a T-account is the credit side. Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts. The total amount debited need not equal the total amount credited for a particular transaction. The left side of a T-account is the debit side.
Which one of the following statements about revenue is not correct?A. Revenue can result in increases in accounts receivableB. Revenue can result in increases in liabilitiesC. Revenue is earned whenever cash is received from a customerD. Revenue is earned when a service is provided to a customer
Which of the following entries properly closes a temporary account? Select one: a. Income Summary XX Cash b. C. Debit Credit Expense Accumulated Depreciation XX Income Summary Income Summary d. e. XX Retained Earnings XX Dividends Debit Credit Debit Credit XX Debit Credit Income Summary XX Revenue XX XX Debit Credit XX XX
Which of the following is FALSE regarding the financial statements?
Which sentence is incorrect? Select one: a. Cash-basis accounting is not in accordance with generally accepted accounting principles. b. In the Accrual-Basis Accounting, expenses are recognized when incurred. c. In the Cash-Basis Accounting, Revenues recognized when cash is received. d. According to the GAAP in Accrual-Basis Accounting, companies recognize revenues when they record cash receipts for their services.
One of the elements of financial statements is comprehensive income. As described in Statement of Financial Accounting Concepts No. 6, "Elements of Financial Statements," comprehensive income is equal to Select one: revenues minus expenses plus gains minus losses plus investments by owners minus distributions to owners plus assets minus liabilities. revenues minus expenses plus gains minus losses plus investments by owners minus distributions to owners. None of these answer choices are correct. revenues minus expenses plus gains minus losses.
Are expenses of any kind a Debit account? Are they, a debit account because Owner's Equity is a Credit account? Is there ever a situation where expenses would be credited instead of debited?
For each of the following independent transactions, indicate whether there was an Increase, a Decrease, or No Impact for each financial statement element. Transaction Assets Liabilities Owners' Equity Received cash from customer on account Borrowed cash from bank Received and recorded utility bill Paid dividends to owners Performed services and billed customer PLEASE NOTE: You are to use the following words - "Increase", "Decrease", or "No Impact" - when you fill in the blanks (Capitalize and omit the quotation marks).
Suzanne knows that an increase to an expense reduces retained earnings (a stockholders’ equity account). However, she also knows that expense accounts have a debit balance, while retained earnings normally has a credit balance. Are these two pieces of information consistent? Explain.

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