Question

Question Completion Status QUESTION 1 Which of the following statements is not true? Interim financial reports can be based on one-month or three- month Property, plant, and equipment are referred to as plant assets. The fiscal year is any 12 consecutive months (or 52 weeks) used by a business as its annual accounting period. An income statement reports revenues earned less expenses incurred. An unadjusted trial balance shows the account balances after they have been revised to reflect the effects QUESTION 2 wages of $28,000 on December 31. This oversight would A company made no adjusting entry for accrued and unpaid Have no effect on net income Understate assets by $28.000 Overstate net income by $28.000 Overstate assets by $28.000 Understate net income by $28,000. QUESTION 3 On October 1, Goodwell Company rented warehouse space to a tenant for $2.500 per month and received $12.500 for five months' rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Rent account. The company's annual accounting period ends on December 31. The Unearned Rent account balance at the end of December, after adjustment should be: $12.500. $10.000 $2.500 $5.000. $7.500.

Answer 1

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Answer 1
Option E.
Because Unadjusted trial is prepared before giving effect to year end adjustments.
Answer 2
Option C.
Wages is an expense. So if it is not reported or less reported than total expense will decrease which will increase net income. So here net income will be overstated by $ 28,000.
Answer 3	Amount $
Unearned Revenue	12,500.00
Received for (months)	5.00
Monthly Revenue	2,500.00
Revenue Earned- Oct to Dec (months)	3.00
Revenue Earned	7,500.00
Unearned Revenue- closing balance	5,000.00
Option D.
Answer 4
True.
Because Unadjusted trial is prepared before giving effect to year end adjustments.
Answer 5
True.
These are liabilities for expenses incurred in the current period but will be paid in future.
Answer 6
Proforma Statements.
Answer 7
Prepaid Rent	3,000.00
Paid for (months)	3.00
Monthly Rent Expense	1,000.00
Expense for Dec	1,000.00
Journal Entry	Debit $	Credit $
Rent Expense	1,000.00
Prepaid Rent		1,000.00
Answer 9
Option D.
Current ratio is calculated to check if company is able to pay its short term obligations. Creditors use this ratio to decide whether to sell or not to company..
Answer 10
Unearned Revenue	3,600.00
Received for (months)	2.00
Monthly Revenue	1,800.00
Revenue for Dec	1,800.00
Journal Entry	Debit $	Credit $
Unearned Revenue	1,800.00
Revenue Earned		1,800.00
Answer is Option A.
Answer 11
Answer is Option B.
Non current items are those which are expected to be due after one year.