1) Allocating the cost of longminuslived tangible assets used in the operations

Question

1) Allocating the cost of longminuslived tangible assets used in the operations of a business is referred to as:

A. depreciation

B. using up the asset

C. an accrual

D. a deferral

2) What effect does an accrued revenue adjustment have on a company's net income?

A. The adjustment decreases net income for the period.

B. The adjustment increases net income for the period.

C. The effect of the adjustment cannot be determined with the information given.

D. The adjustment has no effect on net income

3) Prepaid expense accounts should appear on the balance sheet.

True

False

4)Net income appears on:

A.only the balance sheet

B.both the income statement and the statement of retained earnings

C.only the income statement

D.both the income statement and the balance sheet

5) If prepaid rent has expired during the current period and no adjustment has been made, net income for the current period will be overstated.
True
False

Explanation / Answer

1) Allocating the cost of longminuslived tangible assets used in the operations of a business is referred to as:

So answer is a) Depreciation

2) What effect does an accrued revenue adjustment have on a company's net income?

So answer is B. The adjustment increases net income for the period.

3) Prepaid expense accounts should appear on the balance sheet.

So answer is True

4)Net income appears on:

So answer is b) both the income statement and the statement of retained earnings

5) If prepaid rent has expired during the current period and no adjustment has been made, net income for the current period will be overstated.

So answer is True

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