Question

1 points

Question 5

1. Net income is

   		the primary way of evaluating the financial performance for an entity.
   		not appropriate for individuals.
   		not applicable to not-for-profit entities.
   		the only way to evaluate for-profit corporations.
   		the bottom line according to IRS accounting.

1 points

Question 6

1. Revenues are

   		increases in retained earnings resulting from delivering goods or services to customers.
   		decreases in retained earnings resulting from delivering goods or services to customers.
   		increases in liabilities resulting from delivering goods or services to customers.
   		another term for assets.
   		decreases in assets resulting from delivering goods or services to customers.

1 points

Question 7

1. Net income is defined as

   		assets minus revenues.
   		revenues minus expenses.
   		assets plus revenues.
   		expenses minus revenues.
   		owners' equity assets minus expenses.

1 points

Question 8

1. Reliability is defined as

   		choosing accounting policies without attempting to achieve purposes other than measuring economic impact.
   		the capability of information to make a difference to the decision maker.
   		a correspondence between the accounting numbers and the resources or events those numbers purport to represent.
   		a quality of information such that there would be a high extent of consensus among independent measurers of an item.
   		the quality of information that allows decision makers to depend on it to represent the conditions or events that it purports to represent.

1 points

Question 9

1. Which of the following accounts may be thought of as stored costs that are carried forward to future periods rather than immediately charged against revenue?

   		Depreciation expense
   		Rent expense
   		Advertising expense
   		Prepaid rent
   		Cost of goods sold

1 points

Question 10

1. One year's worth of insurance is paid in advance. The accountant records the payment as an asset, Prepaid Insurance, and expenses 1/12 of the amount each month as Insurance Expense. This is an example of which of the following concepts?

   		Product costs
   		Realization
   		Matching
   		Neutrality
   		Recognition

Answer 1

Question No. (5)

Answer -

Net income is not applicable to not-for-profit entities.

Hence, Option - (C) is Correct.

.

Question No. (6)

Answer -

Revenues are increases in retained earnings resulting from delivering goods or services to customers.

Hence, Option - (A) is Correct.

.

Question No. (7)

Answer -

Net income is defined as revenues minus expenses.

Hence, Option - (B) is Correct.

.

Question No.(8)

Answer -

Reliability is defined as the quality of information that allows decision makers to depend on it to represent the conditions or events that it purports to represent.

Hence, Option - (E) is Correct.

.

Question No. (9)

Answer -

Option - (D) - Prepaid rent is Correct, because it is carried forward to future periods rather than immediately charged against revenue.

.

Question No. (10)

Answer -

The matching concept is an accounting practice whereby firms recognize revenues and their related expenses in the same accounting period.

Hence, Option - (C) - Matching, is Correct.