For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! B. I. They often replace the tests of controls that are performed to assess control risk.b. The cost of the products sold is not an expense. The sales budget is constructed by multiplying the expected sales in units by the sales price. What is a possible danger if politics plays too big a role in accounting standard setting? Answer: D A cash basis of accounting would be appropriate for an accountant working on their own. Accounting distortions are those things that cause deviations in accounting information from the underlying economics. (a) Basic assumptions are the same as accounting principles. A) Changes in accounting principle are always handled in the current or prospective period. Which of the following statements is correct about Depreciation? 1. Try to assess your performance based on the given scores and their descriptive, International Financial Reporting Standards. asked Jun 6, 2016 in Business by Kiwi_Kurisu. 2. Accounting Accounting Information Systems Which of the following statements is correct? C) The statement of cash flows identifies both the sources and the uses of cash. Which of the following statements is correct? Accounting Mcqs These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. The lessor depreciates the leased asset under a finance lease. Which one of the following is correct? c. Financial accounting focuses primarily on qualitative company data. A. FIFO's cost of goods sold will be the largest among the inventory costing methods. Which of the following statements is correct? Cumulative-effect adjustments should be reported as separate items on the financial statements pertaining to … B) The real risk-free rate should increase if people expect inflation to increase. Which of the following statements is correct regarding internal control? Which of the following statements is/are correct for a responsibility accounting system? Get step-by-step explanations, verified by experts. Which of the following statements is correct? B. C)A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate. B) Prior statements should be restated for changes in accounting estimates. II. a. b. Deadweight loss is the net loss of both consumer and producer surplus. d. Financial accounting exists to serve the competitive needs of an organization. b. An accrual basis of accounting would be appropriate for a person operating a grocery store. Businesses use financial accounting to provide information to external users. Which of the following is not a current liability? B. C) The amount reported to stockholders at the end of the period for this account is $3,300. An accrual basis of accounting would be appropriate for a solicitor with one part-time secretary. A) ... A change in method of accounting for depreciation should cause an adjustment to current year's depreciation expense and a cumulative effect for the effect of the change on prior year's earnings. Accounts payable. A. a) Cash + Other assets = Capital - Liabilities b) Capital + Liabilities = Assets + Income c) Assets - Liabilities = Capital d) Assets + Capital = Liabilities A Each job is distinguishable from the other jobs B Identical units are... A debt instrument with no ready market is exchanged for property whose fair market value is currently indeterminable. The net income is equal to zero at the accounting break-even point. III. The term single-step income statement is sometimes used to describe a classified income statement. C. The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period. Which of the following statements is correct? c. An item is material if its inclusion or omission would … 1). b. Decreases to accounts payable are shown on the right side of the account. Which one of the following statements concerning accounting reports is correct? An accrual basis of accounting would be appropriate for a solicitor with one part-time secretary. Which one of the following statements concerning accounting reports is correct? whether or not to extend a loan to the business. A) The income statement reflects the position of a firm as of a single point in time. Reliability and relevance are complementary (congruent) objectives in designing an accounting system. d. Financial accounting exists to serve the competitive needs of an organization. A)The primary difference between EVA and accounting net income is that when net income is calculated, a deduction is made to account for the cost of common equity, whereas EVA represents net income before deducting the cost of the equity capital the firm uses. Which of the following cost flow assumptions is used for inventory when an entity builds townhouses? A. FIFO B. 1. 3. III. Course Hero is not sponsored or endorsed by any college or university. (b) The economic entity assumption states that there should be a particular unit of accountability. The Which of the following statements is correct a Changes in accounting principle from ACCOUNTING MISC at Bicol University Daraga Campus, Daraga, Albay A. FIFO B. 3. The internal users of accounting information include management, owners and creditors. b. Which of the following statements is correct? b. Materiality is affected by an item’s relative size and/or importance. Which of the following cost flow assumptions is used for inventory when an entity builds townhouses? The term single-step income statement is sometimes used to describe a classified income statement. Which of the following statements is correct regarding accounting changes that result in financial statements that are, in effect, the statements of a different reporting entity? (LO 2) Which of the following statements about basic assumptions is correct? If a business is to earn a net income, the gross profit on sales must be greater than operating expenses. Which of the following statements is(are) correct regarding the deterrence of fraud? C. Accrued interest payab... Credit terms of 1/10, n/30 mean  A. only that payment in full is due 10 days after date of the invoice B. only that payment in full i... Accounting for costs of incentive programs for frequent customer purchases involves:  A. In a cost center, managers are responsible for controlling costs but not revenue. 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