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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Similar questions

Which of the following is correct? Events that change a company's financial statements are recognized only when cash is paid or received The matching principle states that expenses are matched, when incurred, with the related revenue. The purpose of the income statement is to show the net financial position of a company at a particular moment of time. Revenues should be recognized only when they are realized
Which is TRUE OR FALSE?I. Assets do not remove money from your pocket. II. Sponsorships are synonymous to tithing.
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.
Due to which concept, accounting does not record non-financial transactions? a. Going concern concept b. Accrual concept O C. Money measurement concept o d. Cost concept
II. Identification: Identify the following. Write the correct answers on the blanks provided. _is a sum of money received or paid for the use of someone else's money. is the interest earned at the end of the allotted time between the lender and the borrower. 1. 2. 3. _is the interest earned on previously earned interest added to the principal. 4. is used instead of principal. 5. _indicates ownership. 6. is the highest or lowest amount someone is willing to pay for the stocks. 7. _are a portion of the ownership of a company or cooperation. 8. _is the monetary portion of the cooperation's earnings. 9. is a model for determining the price of a stock, based on a future series of dividends that grow at a constant rate. 10. are long-term debt instruments that promise a fixed income in the form of interest.
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?

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