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Business Multiple choice questions

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QUESTION;In preparing its Year 9 adjusting entries, the Singapore Company neglected to adjust rental fees received in advance for the amount of rental fees earned during Year 9. What is the effect of this error?;a. Net income is understated, retained earnings are understated, and liabilities are overstated.;b. Net income is overstated, retained earnings are overstated, and liabilities are unaffected.;c. Net income, retained earnings, and liabilities all are understated.;QUESTION;Using the percentage-of-completion method in accounting for long-term projects, a company can reported earnings by;a. Accelerating recognition of project expenditures;b. Delaying recognition of project expenditures;c. Switching to completed-contract accounting;d. Overestimating the total cost of the project;QUESTION;Revenue can be recognized at the time of;a. Production;b. Sale;c. Collection;d. All of the above;QUESTION;In October, a company shipped a new product to retailers. Which one of the following conditions immediate recognition of revenue?;a. Terms of the sale require the company to provide extensive promotional materials to retailers December 1.;b. Retailers are not obligated to pay the purchase price until February, after their holiday sales are collected.;c. On the basis of past performance, reliable estimates are that 20% of the product is returned.;d. The company is unable to enforce agreements concerning discounting of the retail sales of the product.;QUESTION;In accounting for long-term contracts, how does the percentage-of-completion method of revenue recognition differ from the completed contract method? (Choose one answer from a, b, c, or d below.);i) Present value of income tax payments is minimized.;ii) Revenue for each period reflects more closely the results of construction activity during the period.;iii) Current status of uncompleted contracts is reported more accurately.;iv) Percentage-of-completion method relies less on estimates for both the degree of completion and the extent of future costs to be incurred.;a. i and ii;b. i and iii.;c. ii and iii;d. ii and iv

 

Paper#20189 | Written in 18-Jul-2015

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