Question

1.

The Charleston Company pre-pays annual rent. If the adjusting entry to record the current period’s prepaid rent expired is not recorded:

Select one:

a. Current assets will be understated

b. Net income will be overstated

c. Current liabilities will be overstated

d. Current liabilities will be understated

e. Gross Profit will be overstated

2.

Which organization is attempting to establish one set of accounting standards to be used in every country in the world?

Select one:

a. PCAOB

b. AICPA

c. IASB

d. FASB

e. APB

3.

Which is a typical result of a declaration of a cash dividend but not a declaration of a stock dividend?

Select one:

a. Retained Earnings decreases

b. Common Stock account increases

c. Net Income decreases

d. Liabilities increase

e. Liabilities decrease

4.

The disclosure of income tax effects based on the item causing the tax effect is named:

Select one:

a. Cost Principle

b. Matching Principle

c. Intra-period tax allocation

d. Inter-period tax allocation

e. Full Disclosure Principle

Answer 1

As per HOMEWORKLIB RULES we answer one question per post. But I have answered multiple questions. Kindly post remaining questions in next post

Q1 b. Net income will be overstated

Since adjusting entry to record the current period’s prepaid rent expired is

Rent Expense Dr

To Prepaid rent

Thus current asset would be overstated and net income would be overstated.

Q2 c. IASB

Q3 d. Liabilities increase

since entry would be

Dividend Dr

To Dividend payable

In case of stock dividend, there is no liability created