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- Question
Financial statements are prepared in the following order.
Options- A. Income statement - Balance sheet - Statement of retained earnings
- B. Income statement - Statement of retained earnings - Balance sheet
- C. Balance sheet - Statement of retained earnings - Income statement
- D. Statement of retained earnings - Balance sheet - Income statement
- Correct Answer
- Income statement - Statement of retained earnings - Balance sheet
ExplanationThe financial statements should be prepared in the following order:
Income statement - Statement of retained earnings - Balance sheet1. Income statement reports revenues and expenses and calculates net income or net loss for the time period.
2. Statement of retained earnings show how retained earnings changed during the period due to net income or net loss and dividends.
3. Balance sheet reports assets, liabilities, and stockholders? equity as of the last day of the period.
- 1. Generally accepted accounting principles are Discuss
- 2. Which of the following is not a direct tax?
Options- A. Sales tax
- B. Corporation tax
- C. Wealth tax
- D. Estate tax Discuss
- 3. Which of the following bonds has the greatest interest rate price risk?
Options- A. a 10 year, 5% coupon bond
- B. a 5 year, 5% coupon bond
- C. a 5 year, 10% coupon bond
- D. a 10 year, 10% coupon bond Discuss
- 4. Select the correct statement regarding fixed costs.
Options- A. Because they do not change, fixed costs should be ignored in decision making.
- B. The fixed cost per unit decreases when volume increases.
- C. The fixed cost per unit does not change when volume decreases.
- D. The fixed cost per unit increases when volume increases. Discuss
- 5. The chart of accounts is designed to
Options- A. alphabetized the accounts to make reading easier for its financial statement users
- B. summarize the transactions and determine their ending balances
- C. meet the information needs of a company and other financial statement users
- D. analyse the accounts and organize them in order of dollar amount to simplify the accounting information for users Discuss
- 6. Managerial Accounting is also called
Options- A. Control accounting
- B. Management accounting
- C. Cost accounting
- D. Both B & C Discuss
- 7. What determines the value of an item?
Options- A. the capital required to build the factory
- B. the unlimited wants of the consumers
- C. the resources consumed in production
- D. the amount of goods that are produced Discuss
- 8. The accounting process involves all of the following except
Options- A. identifying economic transactions that are relevant to the business
- B. analyzing and interpreting financial reports
- C. communicating financial information to users by preparing financial reports
- D. recording nonquantifiable economic events Discuss
- 9. Explain What are the issues related with Accounts receivable? Discuss
- 10. How to define Inter company Transaction in Account Receivable? Discuss
Accounting and Finance problems
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Correct Answer: Generally Accepted Accounting Principles (GAAP) are basic accounting principles and guidelines are concepts that govern the field of accounting Accounting principles and guidelines include : * Business Entity Assumption * Accounting Period * Historical Cost Concept * Full Disclosure Principle * Cost Principle * Matching Principle * Materiality * Monetary Unit Assumption
Correct Answer: Sales tax
Explanation:
Direct tax is a tax directly paid to the government by the individuals or organizations on whom it is imposed. Sales Tax is paid for the sales of certain goods and services.
Correct Answer: a 10 year, 5% coupon bond
Explanation:
A 10 year, 5% coupon bond has the greatest interest rate price risk.
Correct Answer: The fixed cost per unit decreases when volume increases.
Explanation:
The fixed cost per unit decreases when volume increases is the correct statement regarding fixed costs.
Correct Answer: meet the information needs of a company and other financial statement users
Explanation:
The chart of accounts is designed to to meet the information needs of a company and other financial statement users.
Correct Answer: Both B & C
Correct Answer: the capital required to build the factory
Explanation:
Value is the monetary worth of something, in this case, it is an item.
In option A, since it is talking about capital which is measured in monetary terms.
The value of an item is determined by its quality and its age. Often antiques with good quality are sold in the market with a high value and are sometimes auctioned.
Correct Answer: analyzing and interpreting financial reports
Explanation:
The three steps in the accounting process are
1. Identification,
2. Recording, and
3. Communication.
Hence, analyzing and interpreting financial reports is not involved in the accounting process.
Correct Answer: Issues related to AR 1 Invoice discrepancies / no proper documents 2 Services / goods delivered not satisfactory 3 Customer do more negotiation even your invoice as per agreed terms and conditions 4 Very Important issue if no proper follow up from your side my result you receivable to Bad Debts
Correct Answer: Before answering the above question let us first understand the meaning of Intercompany transactions Intercompany transactions are those transactions that takes place between two or more entities of the same group of company So the receivable of one entity would the payable of another entity All intercompany transactions are eliminated befor preparing the final Balance sheet of the group company
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