Revenue will be recognized when the following occurs as a result of a business activity with a customer: a) There is an increase in assetsb) There is an increase in liabilities c) There is a decrease in assetsd) none of these
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Revenue will be recognized when the following occurs as a result of a business activity with a customer:
a) There is an increase in assets
b) There is an increase in liabilities
c) There is a decrease in assets
d) none of these
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- Which statement is false? * Revenues and expenses result from regular activities of the business. Gains and losses result from incidental transactions of the business. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. An expense is recognized immediately in the income statement when an expenditure produces no future economic benefitsRevenues come from sales of goods and services to customers and result in A.decreased assets or increased liabilities B.decreases in both assets and liabilities C.increases in both assets and liabilities D.increased assets or decreased liabilitiesWhich 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.
- Expenses represent outflows of assets or increases in liabilities as a result of efforts to produce revenues.Which of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principleWhich statement is false? A. Revenues and expenses result from regular activities of the business. B. Gains and losses result from incidental transactions of the business. C. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. D. An expense is recognized immediately in the income statement when an expenditure produces no future economic benefits. E. None of the above
- Which one of the following statements about revenue is not correct?A. Revenue can result in increases in accounts receivableB. Revenue can result in increases in liabilitiesC. Revenue is earned whenever cash is received from a customerD. Revenue is earned when a service is provided to a customerThe primary purpose of showing special types of eventsseparately in the income statement is to:a. Increase earnings per share.b. Assist users of the income statement in evaluating theprofitability of normal, ongoing operations. c. Minimize the income taxes paid on the results of ongo-ing operations. d. Prevent unusual losses from recurring.Which should be subtracted from the net income when using the indirectmethod? A. Loss on sale of investmentB. Amortization of patentC. Increase in accounts receivableD. Increase in accounts payable
- What is the impact on A Company financial statements if the company forgets to recognize that previously unearned revenue has been earned?If a transaction has the effect of decreasing an asset, is the decrease recorded as a debit or as a credit? If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit?True or false Credits Increases in liabilities and revenue. Decrease in assets and expenses?
