Question 8

A constraint on qualitative characteristics of accounting information is:

Timeliness.

Going concern.

Neutrality.

Cost-effectiveness.

Question 9

Top of Form

Which of the following Statements of Financial Accounting Concepts defines the 10 elements of financial statements?

SFAC 4.

SFAC 3.

SFAC 5.

SFAC 6.

Bottom of Form

Question

Top of Form

The full disclosure principle requires a balance between:

Comparability and consistency.

Relevance and cost-effectiveness.

Reliability and neutrality.

Timeliness and predictive value.

Bottom of Form

Question

Somerset Leasing received $33,600 for 24 months' rent in advance. How should Somerset record this transaction?
Prepaid rent	33,600
Rent expense		33,600

Cash	33,600
Deferred revenue		33,600

Interest expense	33,600
Interest payable		33,600

Salaries expense	33,600
Salaries payable		33,600

Question

Ace Bonding Company purchased merchandise inventory on account. The inventory costs $2,200 and is expected to sell for $3,400. How should Ace record the purchase?

Inventory	2,200
Accounts payable		2,200

Costs of goods sold	2,200
Deferred revenue	1,200
Sales in advance		3,400

Cost of goods sold	2,200
Inventory payable		2,200

Cost of goods sold	2,200
Profit	1,200
Sales payable		3,400

Question

On December 31, 2015, Coolwear, Inc. had a balance in its prepaid insurance account of $60,400. During 2016, $98,000 was paid for insurance. At the end of 2016, after adjusting entries were recorded, the balance in the prepaid insurance account was 48,000. Insurance expense for 2016 would be:

$110,400.

$12,400.

$158,400.

$98,000.