Current Attempt in Progress A business will divide the life of its business into specific accounting periods because O it will provide useful information to the business's users. O adjustments to the enterprise's accounts can only be made in the time period when the business terminates its operations. the number of transactions will be more evenly divided between periods. O a transaction can only affect one period of time. Current Attempt in Progress The revenue recognition criteria states that revenue of a business is recognized O when the service is provided or the goods delivered. O when cash is received. O at the end of the year. O in the period that the expenses are incurred. A dress shop makes a large sale for $1100 on November 30. The customer is sent a statement on December 5 and payment from the customer is received on December 10. The dress shop follows GAAP. When should the $1100 of revenue be recognized? O December 10 O November 30 O December 5 O December 1 A furniture factory's employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. According to the expense recognition criteria the overtime wages should be expensed in O February. O either in February or March depending on when the pay period ends. O March the period when the workers receive their cheques. Adjusting entries are needed O every time financial statements are prepared. O every time expenses are incurred or revenue is performed. O never if you are reporting on an annual basis. O every time cash is received. What is the "maximum" time frame for preparing adjusting entries under both ASPE and IFRS? O IFRS prepares adjusting entries quarterly, ASPE prepares adjusting entries quarterly. O ASPE prepares adjusting entries annually, IFRS prepares adjusting entries quarterly. ASPE prepares adjusting entries monthly, IFRS prepares adjusting entries monthly. O IFRS prepares adjusting entries annually, ASPE prepares adjusting entries quarterly. Ayayai Marina has a September 30 year end. On August 1, 2021, it purchased a new marine crane to assist it with the autumn pull out of the boats in the marina. The physical life of the crane is expected to be 15 years, but Ayayai plans to keep the crane for only 10 years as this represents the asset's useful life to the company and at which point they will trade it in for a newer model. The original cost of the crane is $49200. The amount of depreciation that Ayayai should show in its financial statements for the year ended September 30, 2021 is O $4920. O $820. O $3280. O $547. If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements? O Failure to make an adjustment does not affect the financial statements. Assets will be overstated and profit and owner's equity will be understated. O Expenses will be overstated and profit and owner's equity will be understated. Assets will be overstated and profit and owner's equity will be overstated. Depreciation of a long-lived asset is the process of O valuing a long-lived asset at its fair value. O allocating the cost of a long-lived asset to an expense over the periods the asset provides a benefit to the entity. O increasing the cost of a long-lived asset over the periods the asset benefits. writing down a long-lived asset to its real value each accounting period. Depreciation of a long-lived asset is the process of O valuing a long-lived asset at its fair value. O allocating the cost of a long-lived asset to an expense over the periods the asset provides a benefit to the entity. O increasing the cost of a long-lived asset over the periods the asset benefits. writing down a long-lived asset to its real value each accounting period. Which of the following would NOT result in unearned revenue? sale of two-year magazine subscriptions O services performed on account O rent collected in advance from tenants O sale of season tickets to hockey games Closing entries are made O in order to terminate the business as an operating entity. O so that all assets, liabilities, and owner's capital accounts will have zero balances when the next accounting period starts. O so that financial statements can be prepared. O in order to transfer profit (or loss) and owner's drawings to the owner's capital account. The owner's capital account is O closed to the Income Summary account at the end of the accounting period. O a temporary account. O closed to the owner's drawings account at the end of the accounting period. a permanent account. O After closing entries are posted, the balance in the Owner's Capital account in the ledger will be equal to O the profit (or loss) for the period. O zero. the amount of the Owner's Capital reported on the balance sheet. the beginning Owner's Capital reported on the statement of owner's equity. Under IFRS which terms are used as a heading to the balance sheet? O Classified Balance Sheet or Statement of Financial Position O Balance Sheet or Classified Balance Sheet O Statement of Financial Position or Balance Sheet O Balance of Assets and Liabilities or Statement of Assets and Liabilities An intangible asset O cannot be classified on the balance sheet because it lacks physical substance. O is a liability because it has no physical substance. O is never amortized because it has an indefinite life. O derives its value from the rights and privileges it provides the owner. The relationship between current assets and current liabilities is important in evaluating a company's O market value. O turnover. O liquidity. O profitability. Which of the following would NOT affect the acid-test ratio? increasing cash from a cash sale O increasing supplies from a purchase on account O increasing prepaid insurance from a cash payment decreasing accounts receivable from a collection on account Sunland Industries has the following current assets and liabilities on the company's balance sheet: Cash $16000; Accounts Receivable $5000; Inventory $55000; Prepaid Rent $2500; Accounts Payable $19000; Long-Term Notes Payable $20000; and Unearned Revenue $6000. The company's acid-test ratio would be 1.74:1 O 0.41:1 O 0.84:1 O 1.22:1