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

Accrual accounting recognizes revenues and expenses when cash is received or paid. True or False
The concept of materiality: a Treats as material only those items that are greater than 2% or 3% of net income. b Justifies ignoring the matching principle in certain circumstances. c Affects only items reported in the income statement. d Results in financial statements that are less useful to decision makers because many details have been omitted.
What is the difference between ‘Cash’ basis and ‘Accrual’ basis of accounting. Explain the matching concept by incorporating the terms ‘recognized’, revenue recognition principle, and expense recognition principle. Explain and provide two examples of quick assets
Porite Company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the account receivable is collected in cash. Porite's practice is an example of: Multiple Choice O Economic entity. The matching principle. Accrual accounting. Cash basis accounting.
Income that has been earned but not yet received is called accrued income. Unearned Subscription Income is a liability account. 2 Under the accrual basis of accounting, revenue is recognized and recorded in the period when it is earned regardless of when cash related to the transaction is received. All of these statements are correct.
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
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
What’s the correct answer?
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 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.

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