Questions and Answers of Fundamentals Of Financial Accounting 7th Edition

Which of the following statements would be considered true regarding the balance sheet?a. One cannot determine the true current value of a company by reviewing just its balance sheet.b. The balance
For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided.a.
Laser Delivery Services, Inc. (LDS), was incorporated January 1. The following transactions occurred during the year:a. Received $40,000 cash from the company’s founders in exchange for common
J.K. Builders was incorporated on July 1. Prepare journal entries for the following events from the first month of business. If the event is not a transaction, write “no transaction.”a. Received
BSO, Inc., has current assets of $1,000,000 and current liabilities of $500,000, resulting in a current ratio of 2.0. For each of the following transactions, determine whether the current ratio will
Which of the following items is not a specific account in a company’s accounting records?a. Accounts Receivableb. Net Incomec. Sales Revenued. Deferred Revenue
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $15. At the start of January 2018, VGC’s income statement accounts had
Refer to the financial statements of The Home Depot in Appendix A at the end of this book.Required:1. How much did The Home Depot’s sales revenue increase or decrease in the year ended January 29,
Refer to the financial statements of The Home Depot in Appendix A and Lowe’s in Appendix B at the end of this book.Required:1. Did Lowe’s sales revenues increase or decrease in the year ended
The expense recognition principle (“matching”) controlsa. Where on the income statement expenses should be presented.b. When revenues are recognized on the income statement.c. The ordering of
Sirius XM Holdings Inc. sells a dash-top satellite radio receiver and one-year subscription for a total price of $80. By purchasing this deal, the subscriber is entitled to receive hardware (i.e.,
Which of the following would the core revenue recognition principle consider a contract?a. A concert ticket issued by a Ticketmaster customer service representativeb. An order automatically generated
If a company incorrectly records a payment as an asset, rather than as an expense, how will this error affect net income in the current period?a. Net income will be too high.b. Net income will be too
When should a company report the cost of an insurance policy as an expense?a. When the company first signs the policyb. When the company pays for the policyc. When the company receives the benefits
When expenses exceed revenues in a given period,a. Stockholders’ equity will not be impacted.b. Stockholders’ equity will be increased.c. Stockholders’ equity will be decreased.d. One cannot
Which account is least likely to be debited when revenue is recorded?a. Accounts Payableb. Accounts Receivablec. Cashd. Deferred Revenue
Webby Corporation reported the following amounts on its income statement: service revenues, $32,500; utilities expense, $300; net income, $1,600; and income tax expense, $900. If the only other
Which of the following is the entry to be recorded by a law firm when it receives a payment from a new client that will be earned when services are provided in the future?a. Debit Accounts
Given the transactions in M3-18 and M3-19 (including the examples), prepare an income statement for Swing Hard Incorporated for the month ended February 28. (This income statement would be considered

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