Question

Question 37 Under accrual accounting, the matching principle requires: Not yet answered Marked out of 1.00 Select one: a. that all invoices are paid in 30 days Flag question O b. the preparation of adjusting entries O c. that revenue be recognized when the cash is received O d. that reversing entries be prepared where is all the financial data needed to calculate the debt-rations found? Question 38 Not yet answered Marked out of 1.00 Select one: a. balance sheet, statement of cash flows, statement of shareholder's equity Flag question b. income statement, tax forms, shareholder's report O C. annual report, tax forms, bank statements O d. balance sheet, income statement, statement of owner's equity Question 39 When is interest paid on a zero coupon bond? Not yet answered Marked out of 1.00 Select one: a. quarterly Flag question O b. monthly c. at the end of the bond's term d. yearly O

Answer 1

Question: 37.

Solution: option b. is the correct choice.

Preparation of adjusting entries shows recording of accrual expenditure and revenues. Ex.: Recording of depreciation expenses, amortization of prepaid expense, recording accrued of interest income & expense.

Question 38.

Solution: option d. Is the correct choice.

Balance sheet, income statement, statement of shareholders equity are only required to compute debt ratios.

Ex.: Debt to equity ratio, debt to total assets, Interest coverage ratio etc. require the above statements.

Question.39

Solution: option c. is the correct choice.

since, actual payment of zero coupon bond is paid at the end of the maturity period of the bond. Here, payment of face value minus discounted value of bonds is called interest payment.

Question. 40

Solution: option b. is the correct choice.

Because, current market price has no relevance with book value of any asset or liability of balance sheet.

Rest other options are required to find the book value of assets. Like: Accumulated Depreciation is deducted from the cost of asset to get its book value, all acquisition costs are capitalised for recording the book value at the time of purchase etc.