Which of the following statements is FALSE under accrual accounting? Net income = Revenues Expenses. Accrual accounting follows the revenue recognition principle. Revenue is equal to the cash received by a company during an accounting period. Accrual accounting is an application of the matching rule.

The recording of an expense could result in a corresponding increase in: an asset. a liability. stockholders' equity. revenue.

Failure to record an adjusting entry for supplies used up during the period will result in an: understatement of assets. understatement of stockholders' equity. overstatement of net income. overstatement of liabilities.

If a company fails to make an adjusting entry at the end of the period for income tax expense incurred but not yet paid during that period, this will result in: Total Liabilities being understated on the Balance Sheet. Total Assets being understated on the Balance Sheet. Total Assets being overstated on the Balance Sheet. Total Liabilities being overstated on the Balance Sheet.

Which of the following is an application of accrual accounting? Depreciating a building as quickly as allowed by income tax regulations. Expensing a machines cost in the period when the machine is purchased. Recording revenue at the time cash payment is received. Recording utilities expense in the accounting period covered by the monthly bill.

The adjusting entry for the expiration of prepaid advertising, originally recorded as an asset, is: Debit Prepaid Advertising; and Credit Cash Debit Advertising Expense; and Credit Prepaid Advertising Debit Advertising Expense; and Credit Cash Debit Prepaid Advertising; and Credit Advertising Expense

Use the following information about Slim Corporation to answer the next four questions.

On December 1, 2020, Slim Corporation received $30,000 cash from customers as two-year membership dues to its gym facility. The service period started December 1, 2020. Slim Corporation earns the revenue from the membership fees evenly each month. The company records adjusting entries only at year end.

What balance is shown for Service Revenue on Slim Corporations fiscal year 2020 Income Statement? $1,250 $13,750 $15,000 $28,750 $30,000

What balance is shown for Unearned Revenue on Slim Corporations December 31, 2020 Balance Sheet? $1,250 $13,750 $15,000 $28,750 $30,000

What balance is shown for Service Revenue on Slim Corporations fiscal year 2021 Income Statement? $1,250 $13,750 $15,000 $28,750 $30,000

What balance is shown for Unearned Revenue on Slim Corporations December 31, 2021 Balance Sheet? $1,250 $13,750 $15,000 $28,750 $30,000