financial company, specializing in magazines, cable Revenue,\" which represents
ID: 2334144 • Letter: F
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financial company, specializing in magazines, cable Revenue," which represents amo television, and internet services. Wh that customers have paid in type of acoount is this and on what statement is i reported? A. Option A B. Option B C. Option C D. Option D 1ss. During November 2010, Asler Inc, performs consulting services. The client does not pay January, 2011. A. Using the accrual basis of accounting, the revenue is reported in January 2011 Using the cash basis of accounting, the revenue is reported in November 2010. s tusing the accrual basis of accounting, the revenue is reported in November 2010. D. Using the accrual basis of accounting, the revenue is reported when Asler's expenses are paid. ompany mows i00 lawns a week and is paid in July by t company uses the accrual basis of accounting. How will these events affect the co 156. D uring June, the Grass is Greener C financial statements? A. The income statement shows the effects of the transactions in June. B. The e income statement shows the effects of the transactions in July. . The balance sheet shows no effect from the transactions in June. The transactions have no effect on the balance sheet. 157. During April, the Grass is Greener Company buys and pays for a six-month supply of fe order to receive a bulk discount. The cost of fertilizer is recorded: B. as a liability, which will later be reduced as the fertilizer used. D. as an asset, which will later be reduced as the fertilizer is used. A. immediately as an expense. C. partially as an expense and partially as a liability. 158. Your company bought a 30-second advertisement that aired during the Super Bowl at million. It is legally obligated to pay for the ad but has not yet done so. How does the purc the ad time affect your company's balance sheet? A. It increases both assets and liabilities by $1.2 million. B. It increases assets and decreases stockholders' equity by $1.2 million each. C. It does not affect the balance sheet. D. It increases liabilities and decreases stockholders' equity by $1.2 million each.Explanation / Answer
154. Answer is option B
Amount received for the services yet to be provided is liability for an entity and liabilities are recorded in a balance sheet.
155. Answer is option C
Under accrual basis accounting, revenue or expenses are recorded in the books of accounts when the service is rendered or received.
156. Answer is option A
Again under accrual basis accounting, revenue and expenses are recorded in the books of account when the service is rendered or received
157. Answer is option D
Supply purchased is inventory and inventory is an asset which gradually reduces with the usage.
158. Answer is option D
Because the commercial aired, your company is obligated to pay the $1.2 million; that amount will be reported as a liability on the balance sheet. Because the commercial aired, the $1.2 million is an expense that will be reported on this month's income statement; expenses decrease net income, which decrease stockholders' equity.
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