Category: Uncategorized

A bookkeeper has debited an asset account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction:

A company entered into a 2-month contract for $50,000 on April 1. It earned $25,000 of the contract services in April and billed the customer. The company should recognize the revenue when it receives the customer’s check.

Fantasma makes an $18,750, 120-day, 8% cash loan to Keebler Co. on November 1. Fantasma’s end-of-period adjusting entry on December 31 should be:

If equity is $300,000 and liabilities are $192,000, then assets equal:

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity, pressure, and rationalization.

The time period assumption assumes that an organization’s activities may be divided into specific reporting time periods including all of the following except:

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

The cost-benefit constraint prescribes that only information with benefits of disclosure less than the costs of providing it, need be disclosed.

A business’s source documents:

The going concern assumption: