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Business Multiple choice questions

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Question;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 expendituresb. Delaying recognition of project expendituresc. Switching to completed-contract accountingd. Overestimating the total cost of the projectQUESTION:Revenue can be recognized at the time ofa. Productionb. Salec. Collectiond. All of the aboveQUESTION: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 iib. i and iii.c. ii and iiid. ii and iv

 

Paper#53162 | Written in 18-Jul-2015

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