Home » Accounting Assignment Help » Online Exam Help » Connect Financial Accounting Chapter 3. With the income statement approach, prepaid expenses and unearned revenues are initially recorded to expense and revenue; subsequent year-end adjustments update balance sheet accounts and reduce expense and revenue accounts as needed. 6. prepaid expenses Near year-end, the two employees worked Monday, December 31, and Wednesday through Friday, January 2, 3, and 4. Financial Accounting Chapter 3. Notice that the original entry is backwards. Finally, Cash is credited for $24,000 (to correct the error which showed cash increasing by $12,000 when it really decreased by $12,000). (a) Under the time period assumption, an accountant is required to determine the relevance of each business transaction to specific accounting periods. 11. true Which of the following statements explains timing differences for tax and financial accounting? Principles of Acc. The amount paid on a normal payday should also be expensed. Nonoperating expenses and losses include expense and loss accounts that are due to the … a list of all accounts and their balances at a particular date after we have updates account balances for closing entries, the costs of assets acquired in one period that we be expensed in a future period, record revenue in the period in which it's earned, all revenue, expense, and dividend accounts' account balances are maintained for a single period and then closed (or zeroed out) and transferred to the balance of the retained earnings account at the end of the period. Bob Anderson, UCSB 2004 3-1 Financial Accounting: Tools for Business Decision Making, 4th Ed. Chapter 15: Financial Reporting and Concepts ; Chapter 16: Financial Analysis and the Statement of Cash Flows ; Chapters 17-20 Managerial/Cost. 7. contra New Year’s Day. 8. net book value To correct and adjust the accounts first requires a debit to Insurance Expense for $2,000 (to reflect the expired amount). Conquer your course and sign up for free today! This preview shows page 1 - 3 out of 6 pages. Chapter 1: Welcome to the World of Accounting, Chapter 6: Cash and Highly-Liquid Investments, Chapter 11: Advanced PP&E Issues/Natural Resources/Intangibles, Chapter 12: Current Liabilities and Employer Obligations, Chapter 15: Financial Reporting and Concepts, Chapter 16: Financial Analysis and the Statement of Cash Flows, Chapter 17: Introduction to Managerial Accounting, Chapter 18: Cost-Volume-Profit and Business Scalability, Chapter 19: Job Costing and Modern Cost Management Systems, Chapter 20: Process Costing and Activity-Based Costing, Chapter 21: Budgeting – Planning for Success, Chapter 22: Tools for Enterprise Performance Evaluation, Chapter 23: Reporting to Support Managerial Decisions, Chapter 24: Analytics for Managerial Decision Making. No cash is disbursed on Wednesday. More. Record revenues when we earn them and we record expenses with related revenues, when a company has incurred an expense but hasn't yet paid cash or recorded an obligation to pay, when a company has earned revenue but hasn't yet received cash or recorded an amount receivable, a list of all accounts and their balances after we have updated account balances for adjusting entries. According to the revenue recognition principle, on which date should Johnson record service revenue, On January 17, Papa's Pizza signs a contract with Bug Zappers for exterminating services related to a recent sighting of cockroaches in the restaurant. when a company receives cash in advance from a customer for products or services to be provided in the future. 10. a. Kimmel, Weygandt, Kieso CHAPTER 3 Bob Anderson, UCSB 2004 3-2 Chapter 3 The Accounting Information System Analyze the effect of business transactions on the basic accounting equation. all accounts that appear in the balance sheet; account balances are carried forward from period to period. Nonoperating income and expenses 1. Papa's pays for the extermination service on January 29, and Bug Zappers sprays for bugs on February 7. Liquidity ratios 3. Chapter 3. 7. multiperiod costs and revenues that must be split among two or more accounting periods 8. a. Using cash-basis accounting, on which date should Papa's Pizza record the extermination expense? The expense and related payable would not have been previously recorded. View Test Prep - Chapter 3 Quiz Answers from ACC 2023 at University of Florida. 4. a. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Reduce the balance of revenue, expense, and dividend accounts to zero. an asset's original cost less accumulated depreciation, record revenues at the time cash is received and expenses at the time cash is paid, balance sheet that groups a company's assets into current assets and long-term assets and that separates liabilities into current liabilities and long-term liabilities, entries that transfer the balances of all temporary accounts (revenues, expenses, and dividends) to the balance of the retained earnings account, an account with a balance that is opposite, or "contra", to that of its related accounts, the process of allocating the cost of a long-term asset to expense over its useful life, recognize expenses in the same period as the revenues they help to generate. 4. right The correct entry to record utilities consumed is to debit Utilities Expense and credit Utilities Payable. 13. false Operating Expenses Rent expense Salaries expense Supplies expense Insurance expense Depreciation expense Advertising expense Travel expense Communication expense Utilities expense …. Start studying Financial Accounting Chapter 3 Quiz. 3. fiscal Chapter 3Adjusting Accounts forFinancial StatementsQUESTIONS1. Flashcards. 8. accruals 15. accrual basis, 1. transactions approach CHAPTER 3 UNDERSTANDING FINANCIAL STATEMENTS ... answers might be different when doing valuation. Presumes that an organization's activities can be divided into specific time periods such as a month, a three-month quarter, a six month interval, or a year. 6. b. 6. false The understatement of expense causes income and equity to be overstated. The $6,000 amount ($2,000 per day times 3 days) needs to be expensed for the work rendered. A fiscal year that extends from January 1 to December 31 is referred to as a calendar year. Because this was not done, liabilities and expenses are understated. 3. b. All rights reserved. Nonoperating Income and Expenses. 2. periodicity assumption The Accumulated Depreciation account is for exactly this purpose. 11/6/2020 Chapters 3 and 5 Quiz: Financial Accounting I - ACC111_707 1/13 Chapters 3 and 5 Quiz Due Nov 8 at 11:59pm Points 43 Questions 26 Time Limit None Instructions Attempt History Attempt Time Score LATEST Attempt 1 22 minutes 42 out of 43 Score for this quiz: 42 out of 43 Submitted Nov 6 at 12:41pm This attempt took 22 minutes. ... Financial ratios 1. halston_maresh. entries used to record events that occur during the period but have not yet been recorded by the end of the period. 14. true Chapter 3 Nonoperating Income and Expenses. Principlesofaccounting.com ™ Copyright © 2020. Activity ratios Profitability ratios 1. This amount should be recorded as a liability — it will be paid on Friday. Answers GOALS ACHIEVEMENT. 3. true Change in stockholders equity through changes in common stock and retained earnings, Which of the following describes the purpose of closing entries. 1. transactions 2. periodicity assumption STUDY. (b) An accounting time period of one year in length is referred to as a fiscal year. 9. The cash basis of accounting reports revenues when cash is received while theaccrual basis reports revenues when they are earned. 5. matching principle PLAY. Q1. 5. matching principle Pablo Management has two part-time employees, each of whom earns $110 per day. (b) An accounting time period of one year in length is referred to as a fiscal year. Find study materials for any course. Transfer the balances of temp. Match. Visit the bookstore and purchase principlesofaccounting.com textbooks! Chapter 3. Study principlesofaccounting.com and earn college credit. Next, Prepaid Insurance is debited for $22,000; to establish the correct ending debit balance of $10,000, one must record a $22,000 debit (the existing balance is a $12,000 credit). Illustrative Entries  Examples of journal entries for numerous sample transactions, Examples of journal entries for numerous sample transactions, Account Types  Typical financial statement accounts with debit/credit rules and disclosure conventions, Typical financial statement accounts with debit/credit rules and disclosure conventions, Glossary  Includes financial and managerial terms, Time Value of Money  Future and present value tables. 9. b. According to the matching Principle, on which date should Papa's Pizza record the extermination expense, Refer to the info in SSQ1.