Of delivery that the company would discharge its

This preview shows page 13 - 16 out of 18 pages.

of delivery that the company would discharge its obligations to a customer by delivering the product it had promised to deliver in exchange for monies or monies worth. Thus, what we have here is an unearned revenue: Dr Cash 500,000 - record the deposit Cr Unearned Revenue 500,000 - the product hasn't been delivered yet; therefore, the revenue has not be earned. Unearned revenue is a liability account because it reflects the fact that the company still has a present obligation to deliver the product it promised to deliver to the customer. Thus, total assets increase because cash increases but net profit remains unchanged - c. d. increase cash but not increase net profit or total assets The correct answer is: increase total assets and cash but not net profit
Given the information below:
Mark 1.00 out of 1.00 Flag question Assume no dividends were declared during the year. What is the balance of total assets at 30 June 2011? Select one:
Question 23 Which of the following may be a liability of a business enterprise? Select one: Correct Mark 1.00 out of 1.00 Flag question
Only possible answer is B. c. retained profits d. none of the above The correct answer is: wages payable
Question 24 Correct Mark 1.00 out of 1.00 Remove flag In 2011, Zealous Ltd paid $1900 for 2010 expenses, $32 000 for 2011 expenses and $4000 advance payment for 2012 expenses. In 2012, it paid $8000 for 2011 expenses. Furniture depreciation for 2011 was $5000. What was the accrual accounting expense for 2011? Select one:
Question 25 Correct Mark 1.00 out of 1.00 Flag question d. None of the above In order to qualify as a financial accounting transaction, an event must normally have all five of the following characteristics: Three Primary Characteristics: A - Exchange: The event must involve an exchange of goods, money, cheques, legal promises or other items of economic value; B - Past: The exchange must have happened, even if just seconds good (remember-financial accounting is essentially an historical information system); Commentary - Prerequisites: understand and apply the foundation of accrual accounting Under accrual accounting, the company should recognize revenue and expense when revenue has been earned and expense has incurred. Accrual accounting expense for 2011=$32 000 (which incurred and paid in 2011) + $8000 (which incurred in 2011 but paid in 2012) + $5000 (furniture depreciation expenses for 2011) =$ 45 000 The correct answer is D. The correct answer is: $45 000 Which of the following is an accounting transaction? Select one: a. Making a purchase order b. Establishing a bank overdraft c. Hiring a new staff member

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture