Accounting Answers

7. Suppose Ms. Ellana has to owe you money for selling goods on May 12, 2021 and she

will be going to pay only on November 2, 2021, prove that your accounts receivable is

current in nature.

3. Define an Unearned Revenue and discuss why this account is not yet a revenue.

4. If the normal operating cycle is 8 months to August 30, 2023, and the 12 months after the reporting period will jump to the date of December 31, 2023, when is the threshold of

proving that the asset or liability is current? (Pick between August 30, 2023, and

December 31, 2023, only) Explain your position.

1. Which of the following attributes will classify an item which can be seen as a liability in

the Statement of Financial Position?

a. Expenses paid before the actual utilization

B. Expenses already utilized and paid for.

c. Expenses already utilized but have not yet paid for

D. All expenses cannot be classified as a liability component

2. What is the most correct definition of Cost of Goods Sold?

a. This is the cost associated with advertising the product we are selling

b. This is the cost associated with manufacturing the product we are selling

c. This is the cost associated with finances and other incurrences from interest

d. This is the cost associated with office expenses which are periodic in nature

A. Choose the letter that corresponds to the correct answer.

1. All of the following are segments of cash flow statement except:

a. Investing activities c. Operating activities

b. Financing activities d. Supplemental

(Note: for nos. 2-6, identify which part of SCF will be affected using the indirect method)

2. Withdrawals by the owner

a. Investing activities c. Financing activities

b. Operating activities d. None

3. Proceeds from the sale of equipment used in the business

a. Operating activities c. Other activities

b. Investing activities d. Financing activities

4. Depreciation expense

a. Other activities c. Investing activities

b. Operating activities d. Financing activities

5. Collection from customers' long term debt

a. Operating activities c. Other activities

b. Investing activities d. Financing activities

6. Additional cash investment by the owner

a. Other activities c. Investing activities

b. Operating activities d. Financing activities

A. Classify the transactions below if it is Operating, Financing, or Investing.

1. Cash payment to suppliers

2. Cash sales

3. Owner's withdrawal of cash from business' fund

4. Payment from cash customers

5. Payment to employees

6. Collection on long term claims from the customers

7. Proceeds from a bank loan

8. Settlement of rental fees of the leased space

9. Cash contribution of owner

10. Cash received from sale of furniture (company's main line of business is not related to furniture)

In a FULL sentence, mention the ONE group that ‘corporate citizenship’ benefits from a business should emphasise the MOST

9. Differentiate a service, merchandising, and manufacturing entity by providing 2 examples for each type of business.

8. What is the normal balance of Bonds Payable?