Contra revenue - Study guides, Class notes & Summaries

CFA Level 1 Financial Statement Analysis 44 Questions with Answers Income statement - CORRECT ANSWER A financial statement that provides information about a company's profitability over a stated period of time. Also called statement of operations or profit and loss statement. Revenue - Expenses = Net income or loss Liquidity - CORRECT ANSWER The ability to purchase or sell an asset quickly and easily at a price close to fair market value. The ability to meet short-term obligations u...

Test Bank For Financial Accounting 3rd Edition By Christopher Burnley. ACCOUNT CLASSIFICATION AND PRESENTATION Normal Account Title Classifi cation Financial Statement Balance A Accounts Payable Current Liability Statement of Financial Position Credit Accounts Receivable Current Asset Statement of Financial Position Debit Accumulated Depreciation— Plant Asset—Contra Statement of Financial Position Credit Buildings Accumulated Depreciation— Plant Asset—Contra Statement of Financi...

(T/F) Declaration of cash dividends increases total liabilities. - Answer-true (T/F) Payment of cash dividends decreases total assets and total equity. - Answer-false (T/F) The cumulative effect of the declaration and payment of a cash dividend will decrease total assets and shareholders' equity on a company's financial statements. - Answer-true (T/F) The issue/selling price of a bond is calculated as the sum of future cash flows. - Answer-false (T/F) Short term debt which is expec...

Credit sales are recorded as A. Debit Cash, credit Deferred Revenue B. Debit Service Revenue, credit Accounts Receivable C. Debit Cash, credit Service Revenue D. Debit Accounts Receivable, credit Service Revenue correct answers D. Debit Accounts Receivable, credit Service Revenue Identify the condition(s) that must exist for a sale and the related receivable to be recognized. A. Collection of cash is probable B. The company must have collected cash from at least one previous sale to...

CFA Level 1 - 101 Must Knows 368 Questions with Verified Answers Addition Rule of Probability - CORRECT ANSWER ADDITION: P(A or B) = P(A) + P(B) - P(AB) Roy's Safety First Criterion - CORRECT ANSWER Safety First Ratio = (E(R) - Rₜ) / σ Larger ratio is better If (Rₜ) is risk free rate, then it becomes Sharpe Ratio Sharpe Ratio - CORRECT ANSWER Sharpe Ratio = (E(R) - RFR) / σ Larger ratio is better If (Rt) is higher than RFR, then it becomes Safety First Ratio Centra...

An adjusting entries for unearned revenue affects correct answers Revenue and Liabilities How will it affect total Assets in the balance sheet if tangible fixed assets are not depreciated at the end of the period? correct answers Total Assets are overstated How will it affect Income Statement if an accrued expense of $450 is forgotten to record at the end of the period? correct answers Net Income in the Income Statement will be overstated for $450 What accounting principle requires cred...

Inventory - Answer Merchandise that the company intends to sell to its customers Merchandising Companies - Answer Companies that sell, but not manufacture, merchandise to customers; wholesale and retail companies such as Wal-Mart, Nieman Marcus Manufacturing Companies - Answer Create merchandise from underlying raw materials; Exxon and Boeing Service Companies - Answer Provide services to customers; law firms, consulting companies True - Answer Accounting for inventories is...

4 accounting assumptions - going-concern assumption, monetary unit assumption, time period assumption, business entity assumption 4 basic cost flow assumptions - specific identification, first-in first-out (FIFO), last-in first-out (LIFO), weighted average 4 general accounting principles - measurement principle, revenue recognition principle, expense recognition principle, full disclosure principle 4 general purposes of financial statements - income statements, statement of retained earnin...

Credit sales are recorded as: correct answers Debit Accounts Receivable, credit Service Revenue Identify the likely disadvantage(s) of extending credit to customers: correct answers Delay or failure to collect cash Identify the condition(s) that must exist for a sale and the related receivable to be recognized: correct answers Collection of cash is probable & Goods or services have been provided to the customer The Sales Returns account is an expense account: correct answers False (S...

In 2017, $2 million in wages were earned and no cash wages were paid. In 2018, $8 million in wages were earned and $7 million in cash wages were paid. Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages earned in 2018. Any earned but unpaid wages will be paid during the first quarter of 2019. Using only the information provided, which of the following statements is most accurate? Liabilities increased by $1.0 million in 2018 Liabilities increase...