MUHASEBE I - Deneme Sınavı - 21

Recording is a systematic way of keeping chronological diary of events measured in monetary unit.

Statement of cash flows is a financial statement that shows the change in cash position of the company over an accounting period. In other words, statement of cash flows summarizes information concerning the cash inflows (receipts) and outflows (payments) for a specific period of time.

Income statement reports the revenues and expenses and resulting net income or loss of a company for a specific period of time.

The correct answer is B.

Unearned revenue is a liability account.

The correct answer is an adjusted trial balance. Adjusted trial balance is the last step to prepare financial statements.

Accounting periods may be monthly, quarterly, semiannually or yearly

Adjusted trial balance is the last step to prepare financial statements. So, we can say that adjusted trial balance is the basis for the preparation of financial statements.

Residual value is the expected value of the plant asset at the end of its useful life. The correct answer is B.

The company has journalized and posted all adjusting entries. Next, it prepares another trial balance from the ledger accounts. This is called an adjusted trial balance. An adjusted trial balance is a list of all the accounts with their adjusted balances. The purpose is to ensure that total debit balances are equal to total credit balances in the ledger after all adjustments. Adjusted trial balance is the last step to prepare financial statements. So, we can say that adjusted trial balance is the basis for the preparation of financial statements. Financial statements are prepared from the adjusted trial balance. The correct answer is B.

The book value represents the cost invested in the asset that the business has not yet expensed or unexpired, in other words, reminder usefulness of plant asset. The correct answer is A.

In cash basis accounting, companies record revenues when they receive the cash and they record expenses when the cash is paid. Cash basis accounting records only cash transactions—cash receipts and cash payments.

Accrual basis accounting records the impact of a business transaction as it occurs. When the business performs a service, makes a sale, or incurs an expense, the transaction will be recorded even if the business did not receive or did not pay any cash. In accrual basis accounting, companies record revenues when they are earned and record expenses when they are incurred.

In cash basis accounting, companies record revenues when they receive the cash and they record expenses when the cash is paid. Cash basis accounting records only cash transactions—cash receipts and cash payments. Basically, it is a simple method. But it prevents businesses from being cautious. Companies adopting cash basis accounting focus only transactions involving cash. Those with no monetary input are not taken into consideration. It is possible to say that cash basis accounting is mostly used by small businesses.

In deferred revenue, revenue is recognized after the cash is received.

The correct answer is D.

Fiscal Year = Accounting time period that is one year in length.

Beginning of the period activities deal with the opening transactions of the company. After the closing entries done for the previous term, the accounts have to be opened for the new fiscal year. The opening of the accounts is based on the opening balance sheet.

Current liabilities are the liabilities that the company has to pay either with cash of by handling goods or services within one year or in an operating cycle.

Current liabilities are the liabilities that the company has to pay either with cash of by handling goods or services within one year or in an operating cycle.

Merchandising companies purchase the goods that are ready to be sold and sell them to generate revenue. Considering the type of their customers, merchandising companies are called either as retailer or whole seller.