6) Contessa Company collected $42,000 cash on its accounts receivable. The effec
ID: 2339939 • Letter: 6
Question
6) Contessa Company collected $42,000 cash on its accounts receivable. The effects of 6) this transaction as reflected in the accounting equation are: A) Total assets increase and equity decreases. B) Total assets, total liabilities, and total equity are unchanged. C) Both total assets and equity are unchanged and liabilities increase. D) Total assets decrease and equity increases. E) Both total assets and total liabilities decrease. 7) Operating activities: 7) A) Involve using resources to research, develop, purchase, produce, distribute and market products and services. B) Are the means organizations use to pay for resources like land, buildings and equipment C) Are also called strategic management. D) Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. E) Are also called asset management. 8) The full disclosure principle: 8) A) Provides guidance on when a company must recognize revenue. B) Prescribes that accounting information is based on actual cost. C) Prescribes that a company report the details behind financial statements that would impact users' decisions. D) Prescribes that a company record the expenses it incurred to generate the revenue reported.Explanation / Answer
Answers :
6) B) Total assets, total Liabilities, and total equity are unchanged.
Cash Collected from the accounts receivables will increase the cash assets, but will reduce the same amount of accounts receivables in the assets category. the net effect of this transaction will not change assets balance and liabilities balance.
ANSWER:
7) A) Involves using resources to research, develop, Purchase, Produce, distribute and market products and Services.
Operating Activities of the firm involves all the activities which firm do the regular course of business, includes Purchasing, production, Marketing etc.
ANSWER:
8) c) Prescribes that a company report the details behind financial statement that would impact users' decisions.
Fully disclosures principle insists that the financial statement must disclose the all the necessary information to convey to all the stakeholders of the firm. This will help the stakeholders to take the appropriate decisions.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.