Which of the following statement best describes the accounting concept of going concern? O Expenses and revenue are matched to the same time period in which they The business will continue to trade the foreseeable future. When a business produces its financial statement it should always adopt a figure for profit and / or the valuation of its assets. Items with a low value should not h

Which of the following statement best describes the accounting concept of going concern? O Expenses and revenue are matched to the same time period in which they The business will continue to trade the foreseeable future. When a business produces its financial statement it should always adopt a figure for profit and / or the valuation of its assets. Items with a low value should not h

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 1MCQ: Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a...

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Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
That a business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally, is known as which of the following? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
Listed below are the current Accounting Assumptions and Principles Economic Entity Assumption Monetary Unit Assumption Historical Cost Principle Going Concern Assumption Revenue Recognition Principle Full Disclosure Principle Time Period Assumption Matching Principle Required: For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable. h. Nixon Corp records and maintains their books at cost and/or current value, not at a liquidated value. Violation: (Yes/No) Applicable Assumption/Principle: i. Wages of $4,000 related to the last two days of July, were recorded as expense in July even though they were paid in August. Violation: (Yes/No) Applicable…
How is the valuation of cuIrent assets affected if the company follows IFRS? ( OValuation is based on historical cost. OValuation is based on market adjustments. OValuation is based on LCM accounting. O Assets are expensed immediately. Aliability created for receiving cash for future services to be provided is termed O service revenue. O estimated warranty payable. Ounearned revenue. Oaccrued liability.
Which of the following concepts states that a business will continue its operations for the foreseeable future and the company will not be forced to liquidate in the near future? a. Accrual basis b. Materiality c. Consistency concept d. Going concern
Which of the following is most appropriate for IFRS? a. Should disclose all the material information b. Shows business transactions at appropriate or proper time c. It accounts for all the prospective losses but leaves aside all the prospective profits d. It is used to prepare and report the financial statements
Companies are required to highlight certain items in the financial statements so that users can better determine the long-run earning power of the company. Which of the following is not one of those items? O Noncontrolling interest O Discontinued operations O Changes in accounting principle O Unusual gains and losses
Please help with the following question, need accurate and full answer. What is the effect on liabilities, stockholder’s equity, revenues and net income if a company does not make an unearned revenue adjusting entry? Explain with suitable examples
What assumption states that a business is able to financially continue operations and is not planning to liquidate? A. Going concern B. Periodicity C. Full disclosure D. Monetary unit
What is the impact on the accounting equation when a payment of accountable payable is made? what is the impact on accounting equation when an account receivable is collected? what is the impact on the accounting equation when a sell occurs? what is the impact on the accounting equation when stock is issued, in exchange for assets? which of the following accounts is increased by a debit? which of the following camp do not increase with a debit entry? which of the following pairs increase with credit entries? which of the following pairs of accounts are impacted the same with debits and credits? which of the following count normally have a debit balance? what type of account is prepaid insurance?