When a company has net income, what happens to its assets and/or to its liabilities? 2. Why must a company that gives a guaranty or warranty with its product or service show an expense in the year of sale rather than in a later

Q: Studying GAAP Accrual accounting. There is also cash-basis accounting which does not comply with…

A: Cash-basis accounting is an accounting method that records transactions only when money is…

Q: Identify whether a Debit or a Credit. 1. Which contra-asset account is an accumulated depreciation?…

A: The different accounts may have different balances classified as debit or credit.

Q: Which accounting principle requires that interest expense, or any expense for operations during a…

A: Since there are multiple question asked, Answer will be given for first question only, to get all…

Q: Which should be subtracted from the net income when using the indirect method? A. Loss on sale of…

A: A cash flow statement is a financial statement that summarizes the cash and cash equivalents…

Q: The bookkeeper for your company made a mistake and forgot to accrue interest expense at the end of…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: can refer to a company's remaining revenues after paying all expenses and taxes. Select one: a.…

A: Revenue is the total amount of income generated by business by way of selling of goods and services.…

Q: If the income statement error is discovered in a subsequent accounting period, what action is to be…

A: Solution Nominal account is a general ledger account pertaining to all income , expenses , losses…

Q: The revenue recognition principle states that:  (a) revenue should be recognized in the accounting…

A: The revenue recognition principle is the accounting principle that states that how and when the…

Q: The relationship between current assets and current liabilities is   a. useful in determining…

A: The answer is as fallows

Q: Which of the following is an example of a current liability?   A) Bonds payable due in 5 years B)…

A: Current liabilities are  short-term financial debts of a business or person within one year.…

Q: The Effect of Accounting Methods on Financial Statements: Q: 1a) Explain how two identical companies…

A: The objective of the first part of the question is to understand how two identical companies using…

Q: Which one of these statements about the accrual-basis of accounting is false? This basis is in…

A: Cash basis of accounting recognize the expenses or revenues when they are paid or received. Accrual…

Q: Determine the 1. Depreciation of land improvements 2. Depreciation of building 3. Depreciation of…

A: 1 Depreciation = cost-salvage value / Estimated useful life   180,000/15   P12,000     2…

Q: When a company changes from one accounting principle to another accounting principle: a…

A: Retrospective adjustment means the adjustment is made to all the financial statements of the prior…

Q: Revenue Recognition: Explain the concept of revenue recognition in accounting. Provide examples of…

A: Revenue Recognition in Accounting:Revenue recognition is a fundamental accounting principle that…

Q: Companies are required to highlight certain items in the financial statements so that users can…

A: Discontinued operations represent the operations of the company that the company has stopped…

Q: a. What do the accounting policies say in the annual report (footnotes) regarding the cost of…

A: Accounting policies are the policies and standards for the presentation of the financial transaction…

Q: Which of the following assumptions is embodied in the AFN equation? a. All balance sheet accounts…

A: AFN equation related to the additional fund needed , It is assumed that an increase in sales will…

Q: 50) Which of the following is true of the acid-test ratio? A) It measures a company's ability to pay…

A: The acid-test ratio, also known as the quick ratio, is a financial metric used to assess a company's…

Q: The following item is not a debt: Dividends payable in shares. Advances paid by clients on…

A: Solution a: Dividend payable in shares is not a debt instead same is part of shareholder's equity.…

Q: What are lines of credit? From the viewpoint of a short-term creditor, why do lines of credit…

A: Financial statements: Financial statements are condensed summary of transactions communicated in the…

Q: Which of the following will affect net income? O O Writing off an Account Receivable. Estimating bad…

A: The objective of the question is to identify which of the given transactions will have an impact on…

Q: Which of the following is an example of a conservative accounting practice? a. Estimate the…

A: Introduction:   Conservative accounting practices refers to the accounting practices which tend to…

Q: Most companies pay current liabilities Select one: a. out of current assets. b. by issuing…

A: Current liability: Current liability refers to any form of liability of the organization for a term…

Q: What is the relationship between current liabilities and a company's operating cycle? Select one: O…

A: Answer: Correct option is c.  Liquidation of current liabilities is reasonably expected within the…

Q: According to the accrual accounting model, recognition of loss leads to decrease in a company’s net…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: 7. How is the valuation of current assets affected if th OValuation is based on historical cost.…

A: Current assets are the assets that provide the financial benefit over a year. If the assets is held…

Q: For the accounting period in which a short-term loan is paid off, which of the following correctly…

A: A short-term loan refers to an obligation of an entity that is going to be settled by the outflow of…

Q: Expenses recognized in the wrong accounting period: What does it mean when a company may delay…

A: Delaying the recognition of an expense by recording it as an asset is a common accounting practice…

Q: he time period assumption is often referred to as the expense recognition principle. a. True b.…

A: As we answer only one question, we will answer the first question. Please resubmit the question. The…

Q: which of the following is FALSE regarding a firm's financial statements? Inventory is part of…

A: Financial statements -are the final reports prepared by   management staff of a company to present…

Q: How does the accrual basis of accounting provide different results when compared with the cash…

A: Cash Basis of accounting- Under cash basis, accounting entries are recorded as and when there are…

Q: Discuss how, in choosing the accounting methods below, the following ratios can be affected – rate…

A: Answer: •The return on assets shows the percentage of how profitable a company's assets are in…

Q: a. What is your company’s primary revenue, secondary revenue, and gains? b. What is your company’s…

A: As per guidelines. we can only answer up to 3 subparts. Kindly corporate and ask other subparts as a…

Q: 1. The economic benefit (increase in assets) gained by providing goods or services to customers. 2.…

A: 1. The economic benefit (increase in assets) gained by providing goods to customers.The answer is…

Q: What financial metric measures a company's ability to cover its short-term obligations with its most…

A: Lets understand the basics.The acid-test ratio, also known as the quick ratio, is a financial metric…

Q: Which of the following items would we report in the income statement just before net income? a.…

A: Income statement:   The financial statement which reports revenues and expenses from business…

Q: Which accounting principle requires that bad debts expense be recognized in the same period as the…

A: Bad debt expense is the amount of money a business recognizes as a loss due to customers who are…

Q: Revenues are normally considered to have been earned whena. All possibility of return has expired.b.…

A: Revenue Recognition: Revenue recognition refers to recording revenue in the books of accounts.…

Q: Which of the following questions cannot be answered when analyzing the information presented in an…

A: Answer: Income statement is the statement which shows the profit or loss when the revenue and…

Q: Based on a change in economic conditions, Company X has determined that its allowance for doubtful…

A: An accounting change refers to any modification made by a company to the way it records, presents,…

Q: What is total assets on this company's balance sheet?         What is total current liabilities…

A: Let's tackle each question one by one.Total Assets on the Company's Balance SheetTotal Assets are…

Q: The interim period is viewed as an integral part of the annual accounting period. b. The interim…

A: The correct option is (a) The interim period is viewed as an integral part of the annual accounting…