23. Resources a company owns or controls that are expected to yield future benef
ID: 2589806 • Letter: 2
Question
23. Resources a company owns or controls that are expected to yield future benefits are: A) Assets. B) Revenucs. C) Liabilities. D) Owner's Equity E) Expenses. 24. On December 15 of the current year, Conrad Accounting Services signed a $40,000 contract with a client to provide bookkecping services to the client in the following year. Which accounting principle/assumption would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not the year the cash was received? A) Monetary unit assumption. B) Going-concern assumption. C) Cost principle. D) Business entity assumption. E) Revenue recognition principle. 25. ABC Catering received $800 cash from a customer for catering scrvices to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record this transaction. A) Uncarned Catering Revenue 800 Catering Revenue 800 B) Cash 800 Accounts Receivable C) Cash 800 Uneaned Catering Revenue 800 D) Cash 800 Catering Revenue 800 E) Accounts Reccivable 800 Catering Revenue 800Explanation / Answer
23. (A) Assets.
Resources that a company owns or controls that are expected to yield future benefits are assets.
Assets, are the resources that company owns and often controls, give benefits to the company in future in various ways.
24. (E) Revenue recognition principle.
As per revenue recognition principle, revenues should be recorded when it is earned irrespective of receipt of cash and expenses are recorded when they are incurred.
In this case, company wants to record revenue in the following year, and not the year the cash was received. Thus, the company is following revenue recognition principle.
25. (C)
Cash Dr. 800
To Unearned Catering Revenue 800
Revenue is not yet earned by ABC Catering, thus we credited Unearned catering revenue. As cash is received, we debited cash account.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.