When do we use the Income Summary Account? OA. At the beginning of the financial year to close net income/net loss O B. At the end of the financial year to close net income/ net loss OC. At the end of the financial year to close gain/loss O D. At the beginning of the financial year to close gain/loss

When do we use the Income Summary Account? OA. At the beginning of the financial year to close net income/net loss O B. At the end of the financial year to close net income/ net loss OC. At the end of the financial year to close gain/loss O D. At the beginning of the financial year to close gain/loss

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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Which of the following best describes the proper accounting for interim financial reports? a. The interim period is viewed as an integral part of the annual accounting period. b. The interim period is viewed as a distinct, independent accounting period. c. Interim net income should be determined by using the same principles as those for the annual accounting period. d. Net income should be computed on the cash basis except for sales, cost of goods sold, and depreciation.
The income statement line gross profit will appear on which income statement format? Select one: a. Receipt and payment account b. Multiple step income statement c. Single step income statement d. Income and expenditure account
Owner's equity Select one: a. The resulting amount when total liabilities are subtracted from total assets b. When total liabilities are added to total assets c. None of Them d. The resulting amount when total revenue are subtracted from total cost of sales
Communication (income statement): The balance of Interest Expense from accruing interest to be paid has what effect on the income statement in the current year? Multiple Choice A. Decreases net income. B. No effect. C. Increases net income.
What item flows from the income statement to the statement of retained earnings?a. Cashb. Dividendsc. Net incomed. Inventory
8. Realized gains and losses on investments available for sale are reported a. as a current assetb. on the income statementc. on the balance sheet as part of stockholders' equityd. as a contra asset
Reversing entries are used in income collected in advance when the | point adjusting entry has a Debit to an asset Debit to a Liabilty credit to Expense Credit to Income
The adjusting entry to record the accrual of income tax expense includes a: O A. credit to Income Tax Expense. B. debit to Income Tax Payable. C. credit to Accounts Payable. D. credit to Income Tax Payable.
How do we date our financial statements? a Income Statement Specific date; Statement of Retained Earnings and Balance Sheet: Period of time. b Income Statement Specific period of time; Statement of Retained Earnings and Balance Sheet: Specific date c Income Statement and Statement of Retained Earnings: Specific date; Balance Sheet: Period of time. d Income Statement and Statement of Retained Earnings: Period of time; Balance Sheet: Specific date.
A prior period adjustment relates to the income of pastaccounting periods. Explain how such an item is shown inthe financial statements.
Which of the following accounts will be closed to Income Summary? Prepaid Expenses. Unearned Revenue. Dividends. Depreciation Expense.
Which of the following is the correct formula for calculating rate of return on total assets? A. (Net income minus− Interest expense) / Average total asset B. Total equity / Total assets C. (Net income + Interest expense) / Average total assets D. (Net income minus− Interest expense) / Total assets