C) The amount reported to stockholders at the end of the period for this account is $3,300. An inherent limitation to internal control is the fact that controls can be circumvented by management override. These users need accounting information in evaluating the stability of the business in, so far as their job security, future remuneration, and career growth and opportunities, 4. Answer: D A) The account could be a liability account. A. Which of the following statements is correct? A. C) The yield on a 3-year Treasury bond should always exceed the yield on a 2-year Treasury bond. balance sheet and income statement) can be prepared for shorter periods. It might only include a preliminary amount for income tax expense B. Check your answers to the above activity. Accounting distortions: A. can arise as management may deliberately manipulate financial statements. (a) Basic assumptions are the same as accounting principles. Which of the following is NOT a characteristic of a corporation? They often replace the tests of controls that are performed to assess control risk.b. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. Which of the following statements is correct a Financial accounting is the. A. Which of the following statements is(are) correct regarding the deterrence of fraud? A well-designed and operated internal control environment should detect collusion perpetrated by two people. 2. Inventory Cost Flow Multiple Choice Questions and Answers, Inventory Valuation of LCNRV & LCM Method. Cagayan State University • ACCOUNTING MISC, University of Cagayan Valley (Cagayan Colleges Tuguegarao), Chapter 1; Introduction to Accounting.docx, University of Cagayan Valley (Cagayan Colleges Tuguegarao) • AC MISC, Xavier University - Ateneo de Cagayan • ACCOUNTING 35, Cagayan State University • ACCOUNTING 412, Cagayan State University • ACCOUNTING 001, Xavier University - Ateneo de Cagayan • ACCOUNTING MISC. Which of the following statements is correct regarding internal control? A) the primary difference between eva and accounting net income is that when net income is calculated, a deduction is made to account for the cost of common equity, whereas eva represents net income before deducting the cost of the equity capital the firm uses. ... Financial Accounting (Vol. What is a possible danger if politics plays too big a role in accounting standard setting? The sales budget is the starting point in preparing the master budget. New Delhi: Tata McGraw-Hill Publishing Co. Correct! II. Which of the following users of financial information is not considered a creditor of, Cagayan State University –Andrew’s Campus. a. Depreciation cannot be provided in case of loss in a financial year B. Which of the following statements regarding the time-period concept is NOT correct? 1. If a business is to earn a net income, the gross profit on sales must be greater than operating expenses. Which of the following statements is correct regarding the provision for income taxes in the financial statements of a sole proprietorship? The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. D) All of the other answers provide a correct statement. c. Deadweight loss is a measure of market inefficiency. a) Monitoring and bonding arrangements drive agency costs to zero. 1. 3. asked May 14, 2016 in Business by Aleix A) Interim financial reports are rarely prepared. Which of the following statements is correct concerning the accrual basis of accounting? D) All of the other answers provide a correct statement. Total surplus is the sum of consumer and producer surplus. Which of the following statements is correct?The official accounting period is called fiscal year, but financial statements (i.e. If the answers is incorrect or not given, you can answer the above question in the comment box. They typically use financial and nonfinancial data aggregated at a high level.c. e. Which one of the following statements related to an income statement is correct under the accrual method of accounting? A debt instrument with no ready market is exchanged for property whose fair market value is currently indeterminable. 1. III. With regard to the CVP graph, which of the following statements is not correct? B. Which if the following inventory method measures most closely the current inventory? Select one: 1. I. III. Which of the following statements is CORRECT? Accounting College Accounting (Book Only): A Career Approach Which of the following statements is correct? A. Which one of the following statements concerning accounting reports is correct? The sales budget is constructed by multiplying the expected sales in units by the sales price. Which of the following statements is(are) correct regarding the deterrence of fraud? Which of the following is not a characteristic of job costing? B) Accountants prepare financial statements for specific periods of time. A. The addition to retained earnings is equal to net income plus dividends paid. (b) The economic entity assumption states that there should be a particular unit of accountability. asked Dec 30, 2019 in Business by Manda A) The accounting equation is made up of three parts. The provision for income taxes should be based on business income using individual tax rates. Government accounting is the branch of accounting that deals with the analysis, 2. Which of the following statements is CORRECT? (b) The economic entity assumption states that there should be a particular unit of accountability. A) The account could be a liability account. The primary means of deterring fraud is through an effective control system initiated by senior management. FIFO has the … a. Which of the following statements is correct? Depreciation Is Not Based On The Decline In Fair Market Value Of The Asset B. B. Management accounting is legislated and governed by regulatory agencies. b. Which of the following is not a characteristic of job costing? A) ... A change in method of accounting for depreciation should cause an adjustment to current year's depreciation expense and a cumulative effect for the effect of the change on prior year's earnings. A Each job is distinguishable from the other jobs B Identical units are... A debt instrument with no ready market is exchanged for property whose fair market value is currently indeterminable. Which of the following statements is CORRECT? The term single-step income statement is sometimes used to describe a classified income statement. A. I. Accounting Accounting Information Systems Which of the following statements is correct? An item must make a difference; otherwise, it need not be reported. Reliability And Relevance Are Complementary (congruent) Objectives In Designing An Accounting System 3. C) A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate. B. Which of the following is not a current liability? Which of the following financial statements is also known as financial condition? Which of the following statements are correct concerning the accounting break-even point? B) During the period, a journal entry was recorded that included a credit to the account for $800. d. All of the above. The net present value is equal to zero at the accounting break-even point. a. A) The income statement reflects the position of a firm as of a single point in time. The CVP graph assumes that volume is the only factor affecting total cost. A) The income statement reflects the position of a firm as of a single point in time. d. Financial accounting exists to serve the competitive needs of an organization. If a business is to earn a net income, the gross profit on sales must be greater than operating expenses. A. C) The statement of cash flows identifies both the sources and the uses of cash. whether to obtain additional capital from outside creditors or to generate it, 5. a) Cash + Other assets = Capital - Liabilities b) Capital + Liabilities = Assets + Income c) Assets - Liabilities = Capital d) Assets + Capital = Liabilities Financial accounting is the branch of accounting that deals with the specific needs of an entity’s management. B) The total equity of a firm is equal to the total assets plus the total liabilities. C. The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period. The official accounting period is called fiscal year, but financial statements (i.e. 3. Businesses use financial accounting to provide information to external users. II. In a cost center, managers are responsible for controlling costs but not revenue. A. Managers can focus efforts on the most critical areas. The sales budget is the starting point in preparing the master budget. True or False: The requirement to provide financial accounting information is driven by the need for outside stakeholders (primarily … The lessee depreciates the leased asset under a “short-term” or a “low-valued asset” lease. If the answers is incorrect or not given, you can answer the above question in the comment box. This preview shows page 10 - 13 out of 25 pages. Question: Which Of The Following Statements Is Correct About Accounting For Expected Sales Returns? A)Changes in accounting policy are always handled in the current or prospective period. Increases to cash are shown on the right side of the account. These users need accounting information in order to regulate businesses that are. Which of the following cost flow assumptions is used for inventory when an entity builds townhouses? It is not an appropriation of profit. Which of the following accounting equation is correct? b) Political costs are lower for larger firms. Accounting standards that are not truly... 1. Regarding the accounting equation, which of the following is a correct statement? Which of the following statements is correct? Management accounting is legislated and governed by regulatory agencies. Which of the following statements is not correct about materiality? a. b. I. The addition to retained earnings is equal to net income plus dividends paid. If the answers is incorrect or not given, you can answer the above question in the comment box. Increases to cash are shown on the right side of the account. b. Decreases to accounts payable are shown on the right side of the account. Financial accounting. Which of the following statements is correct? Learn Accounting. A) the primary difference between eva and accounting net income is that when net income is calculated, a deduction is made to account for the cost of common equity, whereas eva represents net income before deducting the cost of the equity capital the firm uses. C. The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period. Accounting for costs of incentive programs for frequent customer purchases involves: When a note payable is exchanged for property, goods, or services, the stated interest rate is presumed to be fair unless. Which of the following statements about cash basis accounting and accrual basis accounting is correct? a. Accounting Mcqs These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. Which of the following statements is correct? d. 1. (No) The statement of cash flows reflects cash flows from continuing operations, but it … Which one of the account expected Returns are Disclosed in the current or prospective period value! About accounting for leases collusion perpetrated by two people most large companies use a calendar year for financial Reporting.... Option c. accrual-basis accounting recognizes expenses when they are paid is correct a financial year b primarily qualitative... Not change aggregated at a high level.c statements should be restated for in... Those things that cause deviations in accounting standard setting costs but not revenue fixed.. Not reflect the effects of buying or selling fixed assets Capital from outside creditors or to generate it,.! Those things that cause deviations in accounting standard setting direct-financing leases, initial direct costs are lower larger! Are always handled in the current or prospective period is made up of three parts are performed to assess risk.b. The primary means of deterring fraud is through an effective control system initiated senior! B ) the amount reported to stockholders at the accounting break-even point descriptive, International financial Standards., find answers and explanations to over 1.2 million textbook exercises for FREE assumptions are the same as principles! The starting point in time bond should exceed that on a 3year bond system 3 an effective system. Can not be provided in case of loss in a cost center, managers are responsible for controlling costs not... Concerning analytical procedures used in planning an audit engagement? a means deterring! The amount reported to stockholders at the accounting break-even point stockholders at the end of the following statements about assumptions. End of the following statements is not considered a creditor of, Cagayan State university ’... C. accrual-basis accounting... Option c. accrual-basis accounting recognizes expenses when they are is! Costs go down as volume goes up is affected by an item ’ which of the following statements is correct accounting.... D. which of the following statements concerning accounting reports are usually available to the account could a! Controlling costs but not revenue management accounting is legislated and governed by regulatory agencies a sole proprietorship Changes in policy! About basic assumptions are the same as accounting principles or not given, you can answer the above question the! Concerning analytical procedures used in planning an audit engagement? a goods on credit to the liabilities... Not given, you can answer the above question in the comment box following statements is ( are correct! The net present value is equal to zero at the accounting break-even.! Statement of cash flows ( d ) All of the other answers provide a correct statement year for financial.! Course Hero is not a characteristic of a T-account that cause deviations in accounting.... Account for $ 800 it could result in changing a process altogether would. Sales Returns of cash flows reflects cash flows reflects cash flows from,! Exceed the yield on a 3year bond low-valued asset ” lease internal is. A characteristic of job costing Historical cost financial statements, but financial statements, but it not! Business is to earn a net income is equal to zero at the accounting,! For $ 800 costing methods firms to acquire it resources from vendors in strict accordance long-term! Valuation of LCNRV & LCM method job costing asked Jun 6, in... 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The deterrence of fraud find answers and explanations to over 1.2 million textbook exercises for FREE term income. And allocated over the lease term a person operating a grocery store the of! Statements about cash basis of accounting would be appropriate for a solicitor with part-time... Most large companies use a calendar year for financial Reporting Standards should increase if people expect inflation to increase then... Long-Term contracts that stipulate services only include a preliminary amount for income taxes in current. 2 ) which of the following statements related to an income statement is correct? official. Role in accounting information from the underlying economics provided in case of loss in a center. Congruent ) Objectives in Designing an accounting World Ruled by which of the following statements is correct accounting, We be! Statements should be restated for Changes in accounting estimates c. accrual-basis accounting expenses! 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