Jolly Rogers Communications pays monthly linecharges to lease voice communicatio
ID: 2450852 • Letter: J
Question
Jolly Rogers Communications pays monthly linecharges to lease voice communication lines. The company alsoreceives lease charges from other communication companies forcapacity on lines owned or controlled by Jolly Rogers. 1. Jolly Rodgers deferred significant portions of thelease payments and recognized lease revenue as received (choose allthat apply): a) The decision to defer expenses may have caused thecompany to overstate net income. b) The decision to recognize lease revenue as receivedmay have caused the company to understate net income. c) If Jolly Rogers improperly deferred lease expenses,one impact would be to overstate assets. d) If Jolly Rogers improperly recognized lease revenueto quickly, one impact would be to overstate liabilities. Click all that applies or say none if none applies Jolly Rogers Communications pays monthly linecharges to lease voice communication lines. The company alsoreceives lease charges from other communication companies forcapacity on lines owned or controlled by Jolly Rogers. 1. Jolly Rodgers deferred significant portions of thelease payments and recognized lease revenue as received (choose allthat apply): a) The decision to defer expenses may have caused thecompany to overstate net income. b) The decision to recognize lease revenue as receivedmay have caused the company to understate net income. c) If Jolly Rogers improperly deferred lease expenses,one impact would be to overstate assets. d) If Jolly Rogers improperly recognized lease revenueto quickly, one impact would be to overstate liabilities.Explanation / Answer
The following would apply a ) The decision to deferexpense may have caused the company to overstate NetIncome b ) If Jolly Rogersimproperly recognized lease revenue too quickly , one impact wouldbe to overstate liabilities
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