Question : 91.Refer to the information above. Before the journal entry above, : 1237563

 

 

91.Refer to the information above. Before the journal entry above, Galloway had assets of $450,000; liabilities of $230,000; and owners’ equity of $220,000. Total assets immediately after the above transaction has been recorded amount to:   

A.$430,000.

 

B.$450,000.

 

C.$470,000.

 

D.$476,000.

$450,000 + $26,000 – $6,000 = $470,000

 

 

 

92.The price of the goods sold or services rendered during a given accounting period is called:   

A.Net income.

 

B.Profit.

 

C.Revenue.

 

D.Equity.

 

 

 

 

93.All of the following statements are true of an income statement except:   

A.The period of time covered by an income statement is the company’s accounting period.

 

B.A fiscal year is any accounting period less than 12 months in length.

 

C.The length of a company’s accounting period may vary.

 

D.Every business prepares an annual income statement.

 

 

 

 

94.Which of the following would not appear on an income statement?   

A.Repair service revenue.

 

B.Insurance expense.

 

C.Dividends.

 

D.Net income.

 

 

 

 

95.Sally Smith had expenses of $800 in June which she paid in July. She reported these expenses on her June income statement. By doing this, she is following the accounting principle of:   

A.Revenue realization.

 

B.Adequate disclosure.

 

C.Matching.

 

D.Conservatism.

 

 

 

 

96.The principle that states revenue should be recognized at the time goods are sold or services rendered is called:   

A.Adequate disclosure.

 

B.Conservatism.

 

C.Matching.

 

D.Revenue realization.

 

 

 

 

97.Recognizing revenue when it is earned and not when cash is received and recognizing expenses when the related goods or services are used rather than when they are paid for is called:   

A.Revenue recognition.

 

B.Accrual accounting.

 

C.Conservatism.

 

D.Matching.

 

 

 

 

98.The realization principle indicates that revenue usually should be recognized and recorded in the accounting records:   

A.When goods are sold or services are rendered to customers.

 

B.When cash is collected from customers.

 

C.At the end of the accounting period.

 

D.Only when the revenue can be matched by an equal dollar amount of expenses.

 

 

 

 

99.In February of each year, the Carlton Hotel holds a very popular wine tasting event. Tickets must be ordered and paid for in advance, and are typically sold out by November of the preceding year. The realization principle indicates that the revenue from these ticket sales should be recognized in the period in which the:   

A.Order is placed.

 

B.Wine tasting event is held.

 

C.Payments are received.

 

D.Expenses associated with the wine tasting are paid in full.

 

 

 

 

100.The matching principle is best demonstrated by:   

A.Using debits to record decreases in owners’ equity and credits to record increases.

 

B.The equation Assets = Liabilities + Owners’ Equity.

 

C.Allocating the cost of an asset to expense over the periods during which benefits are derived from the asset.

 

D.Offsetting the cash receipts of the period with the cash payments made during the period.