Question

31) Common Stock is a separate account in the A) equity B) asset category of the accounting equation C) liability D) revenue 32) The time period concept states that A) expenses incurred during a period should be matched against the revenues of the period B) companies should record revenue when it has been eamed ©) all expenses should be recorded when they are incurred during the period D) financial statements can be prepared for specific periods 33) Adjusting entries are needed to correctly measure the A) net income (loss) on the income statement C) ending balance in the Cash account B) beginning balance in the Cash account D) net income (loss) on the balance sheet 34) Which of the following financial statements would be most useful if an analyst wants to know the profitability of a company? A) balance sheet B) income statement C) statement of cash flows D) statement of retained earnings

Answer 1

31.

Your required answer is option A i.e. Equity

Explanatoin:

Common stock is seperatley shown in accounting equation under Owner's Equity.

Assets = Liabilities + Owner's Equity

32.

Your required answer is option D i.e. Financial statements can be prepared for specific periods

Explanatoin:

Time period concept is an accounting principle which means that the financial statements can be prepared for a specific periods.

33.

Your required answer is option A i.e. net income (loss) on the income statement

Explanatoin:

Adjusting entries to prepared to measure correctly income (loss) on the income statement. Generally these adjusting entries are like Depreciation, prepaid or outstanding expense etc.

34.

Your required answer is option B i.e. Income Statement

Explanatoin:

Income Statement gives the detailed idea of company revenue and expenses therefore it would be most useful if an analyst wants to know the profitability of a company.

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