module 2.docx - Homework 1 Question 1 0.5 out of 0.5 points The underlying rules of accounting in the U.S are called Selected Answer A generally

module 2.docx - Homework 1 Question 1 0.5 out of 0.5 points...

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Homework 1 Question 1 0.5 out of 0.5 points The underlying rules of accounting in the U.S. are called ______. Selected Answer: A. generally accepted accounting principles (GAAP) Answers: A. generally accepted accounting principles (GAAP) B. financial accounting standards board (FASB) C. general accounting acts and policies (GAAP) D. internal revenue code (IRC) Response Feedback: See Module 2 LO1. Question 2 0 out of 0.5 points Land is purchased at a cost of $7,000. At year end, based on appraised values, the land's value increased to $38,000. At what amount should the land be reported on the year-end balance sheet? DO NOT INCLUDE $ IN ANSWER Selected Answer: 45,000 Correct Answer: 7,000 ± 0% Response Feedback: See Module 2, LO 3.2. The historical cost principle requires assets to be recorded at their original monetary value given in the exchange for the asset. Subjective increases in asset values are not allowed. However, if the asset value falls below cost, then the asset would be reduced to the lower value. Question 3 0 out of 0.5 points During September, WVU collected $8,000,000 in advance ticket sales for basketball games to be played in January. The games were played in January as scheduled. The $8,000,000 will be reported as ______. Selected Answer: Revenue on the Income Statement for the month ended September 30 Answers: Accounts Receivable on the Balance Sheet at November 1
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Revenue on the Income Statement for the month ended September 30 Deferred Revenue on the Income Statement for the month ended September 30 Revenue on the Statement of Cash Flows for the month ended January 31 Revenue on the Income Statement for the month ended January 31 Response Feedback: See Module 2 LO4. On September 1, WVU gets Cash (+A) and gives a promise of future service, Deferred Revenue (+L). In January, when the games are played and the revenue earned, WVU reduces Deferred Revenue (-L) and records Revenue (+SE). Month ended September 30 financial statements: Income Statement reports $0 Revenue (not earned until January) Statement of Cash Flows reports $8,000,000 Cash Collected from Customers Balance sheet reports $8,000,000 Deferred Revenue Month ended January 31 financial statements: Income Statement reports $8,000,000 Revenue (games played, thus earned) Statement of Cash Flows reports $0 Cash Collected from Customers Balance sheet reports $0 Deferred Revenue (amounts collected in advance are now earned) Question 4 0.5 out of 0.5 points In April, Clean Dirt, Inc. paid for advertising to be run in May. In May, the advertisement was run in the local paper. Select the correct answer for each the questions below. Question Correct Match Selected Match Under cash-basis accounting, Advertising Expense is recorded in which month? A. April A. April Under accrual accounting, Advertising Expense is recorded in which month? B. May B. May All Answer Choices A.
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