Which of the following taxpayers is required to use the accrual method of accounting? a. An attorney with average annual gross receipts of $2 million. b. An insurance agency with average annual gross receipts of $5 million. Oc. A retail business with average annual gross receipts of $8,000,000. Od. None of these choices are required to use the accrual method.
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- Direction: Act as an accountant. Enter the given data in excel and compute for the gross income, the exact amount of partial deductions, total deductions, and net pay. Deductions: SSS = 4% Philhealth = 1.50% Pagibig = 2% Tax = 12% (Please show the formula in excel)The accountant for Tom's Tax Preparation, Inc. recorded a transaction by debiting Accounts Payable and crediting Cash. Which of the following transactions did the account record? Group of answer choices A. The purchase of supplies on account. B. Payment to suppliers for goods originally purchased on account. C. Receiving cash from suppliers. D. Receipt of payment for services originally provided to customers on account.Businesses using the allowance method for the recognition of uncollectible accounts expense commonly experience four accounting events: a. Recognition of uncollectible accounts expense through a year-end adjusting entry. b. Write-off of uncollectible accounts. c. Recognition of revenue on account. d. Collection of cash from accounts receivable. Required Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown here. Use the following coding scheme to record your answers: increase is +, decrease is –, leave the cell blank for not affected. In the cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example. Effect of Events on the Financial Statements Balance Sheet Income Statement Stockholders' Net Event Assets Liabilities Revenue Expense Cash Flow Equity Income 1. %3D + 2. 3. 4. +
- What is the amount of uncollectible accounts expense that will be reported on the year 2 income statementWhen should companies that sell gift cards to customersreport revenue?a. When the gift card is issued and cash is received.b. When the gift card is used by the customer.c. At the end of the year in which the gift card is issued.d. None of the above.Match (by letter) the correct reporting method for each of the items listed below. Reporting Method C = Current liability L = Long-term liability D = Disclosure note only N = Not reported Item _________1. Accounts payable. _________2. Current portion of long-term debt. _________3. Sales tax collected from customers. _________4. Notes payable due next year. _________5. Notes payable due in two years. _________6. Advance payments from customers. _________7. Commercial paper. _________8. Unused line of credit. _________9. A contingent liability with a probable likelihood of occurring within the next year and can be estimated. _________10. A contingent liability with a reasonably possible likelihood of occurring within the next year and can be estimated.
- Identify whether the account is an ASSET, LIABILITY, EQUITY, REVENUE or EXPENSE. 1. Unremitted sales tax 2. Benefits 3. Unremitted pension payments 4. Bank chargesa. What is your company’s primary revenue, secondary revenue, and gains? b. What is your company’s primary expenses, secondary expenses, financial activity generated expenses, and losses? c. What is the revenue trend? Does the 10-K or 10-Q discuss primary revenues, as well as other revenue types? d. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends?Which of the following items is not a specific account in acompany’s accounting records?a. Accounts Receivableb. Net Incomec. Sales Revenued. Unearned Revenue
- Which of the following accounts would not be reported under revenue on a simple income statement? A. interest revenue B. net sales C. rent revenue D. operating expenses. A list of concepts is provided below in the left column, with descriptions of the concepts in the right column. There are more descriptions provided than concepts. Match the description to the concept. ________ Cash-basis accounting. ______ Fiscal year. _______ Revenue recognition principle. _______ Expense recognition principle. (a) Monthly and quarterly time periods. (b) Accountants divide the economic life of a business into artificial time periods. (c) Efforts (expenses) should be recognized in the period in which a company consumes assets or incurs liabilities to generate accomplishments (revenues). (d) An accounting time period that starts on January 1 and ends on December 31. (e) An accounting time period that is one year in length. (f) Companies record revenues when they receive cash and record expenses when they pay out cash. (g) Companies record transactions in the period in which the events occur. (h) Recognize revenue in the accounting period in which a performance…Which of the following is deductible as interest on Schedule A? a.Subscriptions to professional publications. b.Unreimbursed business expenses. c.Charitable contributions. d.Investment expenses. e.Gambling losses to the extent of gambling winnings.