Exam 2: Accounting for Accruals and Deferrals

[The following information applies to the questions displayed below.] Nelson Company experienced the following transactions during Year 1, its first year in operation. Acquired $12,000 cash by issuing common stock Provided $4,600 of services on account Paid $3,200 cash for operating expenses Collected $3,800 of cash from customers in partial settlement of its accounts receivable Paid a $200 cash dividend to stockholders -What is the amount of net cash flows from operating activities that will be reported on the Year 1 statement of cash flows?

Which of the following financial statements is impacted most significantly by the matching concept?

What should an accountant do when there is no traceable connection between expenses and revenue?

Mize Company provided $45,500 of services on account,and collected $38,000 from customers during the year.The company also incurred $37,000 of expenses on account,and paid $32,400 against its payables.How do these events impact the elements of the financial statements model?

The following account balances were drawn from the Year 1 financial statements of Grayson Company: What is the balance of the Common Stock account?

Which of the following are "matched" under the matching concept?

Certified public accountants are obligated to act in a way that serves the public interest.

Addison Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Addison's statements?

Joseph Company purchased a delivery van on January 1,Year 1 for $35,000.The van is estimated to have a 5-year useful life and a $5,000 salvage value.How much expense should Joseph recognize in Year 1 related to the use of the van?

On December 1,Year 1,Jack's Snow Removal Company received $6,000 of cash in advance from a customer and promised to provide services for that customer during the months of December,January,and February.How will the Year 1 year-end adjustment to recognize the partial expiration of the contract impact the elements of the financial statements model?

Which of the following is frequently used to describe the expenses that are matched in the same accounting period in which they are incurred?

What do accountants commonly do when the connection between an expense and the corresponding revenue is vague?

Rushmore Company provided services for $45,000 cash during Year 1.Rushmore incurred $36,000 of operating expenses on account during Year 1,and by the end of the year,$9,000 of that amount had been paid with cash.If these are the only accounting events that affected Rushmore during Year 1,which of the following statements is true?

The collection of an account receivable is a claims exchange transaction.

The balances of the temporary accounts are transferred to Net Income,a permanent account,during the closing process.

Which of the following accounts would not appear on a balance sheet?

Bledsoe Company acquired $17,000 cash by issuing common stock on January 1,Year 1.During Year 1,Bledsoe earned $8,500 of revenue on account.The company collected $6,000 cash from customers in partial settlement of its accounts receivable and paid $5,400 cash for operating expenses.Based on this information alone,what was the impact on total assets during Year 1?

Asset use transactions always involve the payment of cash.

Providing services to customers on account is an asset exchange transaction.

The matching concept leads accountants to select the recognition alternative that produces the lowest amount of net income.