A) You purchased $40,000 in goods from a vendor. Thirty days later, you paid the vendor $40,000. Why is this payment not recorded as an expense?

Select an answer:

There is no expense to record because the purchase was fully paid off.

An expense is only created through business operations, such as selling inventory.

Expenses are only created when there is a future amount of money to pay, such as unpaid wages.

What does accrual accounting measure?

Select an answer:

B) he stock market reaction to a company's financial performance for the year

a company's economic performance for the year

the amount of money borrowed and invested during the year

a company's cash inflows and outflows for the year

c) Which bookkeeping record is a collection of all accounts, with a separate page for each account, and details the postings of all transactions that occur during a year?

Select an answer:

a journal

a trial balance

a ledger

d) How are real and nominal accounts different in terms of the financial statements they are recorded on?

Select an answer:

Real accounts are recorded on the Balance Sheet, while nominal accounts are recorded on the Income Statement.

Real accounts are recorded on the Income Statement, while nominal accounts are recorded on the Balance Sheet.

Real accounts are recorded on the Statement of Cash Flows, while nominal accounts are recorded in the ledger.

E) Although many errors from a previous year can be corrected, which error are you unable to correct?

Select an answer:

an incorrect amount posted to Retained Earnings

an incorrect amount shown as Depreciation

an incorrect amount on an Income Statement