Question

All of the following statements are correct, EXCEPT:

	a.	Temporary accounts are closed at the end of the accounting period to retained earnings.
	b.	Asset, liability, and stockholders' equity accounts are referred to as permanent accounts.
	c.	Adjusting entries are necessary when cash flow and the economic transaction occur in the same accounting period
	d.	Revenue, expense, and dividend accounts are described as temporary accounts.
	e.	Closing entries prepare accounting records for the next accounting period. At the end of the accounting period, an adjusting entry is made to reflect revenues earned (performance obligations have been satisfied), but cash is not yet collected. This is required due to which method of accounting? a. Accrual basis method of accounting b. Transaction approach c. Cash basis method of accounting d. Full disclosure e. Expense recognition All of the following items are reported within accumulated other comprehensive income, EXCEPT? a. All responses are included as an adjustment to accumulated other comprehensive income b. Foreign currency translation adjustments c. Post-retirement commitments on health plans d. Unrealized gains and losses from derivative instruments e. Changes to stockholders equity resulting from additional minimum pension liability adjustments All of the following statements are true, except: a. A qualified opinion indicates that one can rely on the auditor's report as an indication of the reliability of the financial statements, with no material exceptions. b. A disclaimer of opinion indicates that one should not look to the auditor's report as an indication of the reliability of the financial statements. c. A review is substantially less in scope than an examination in accordance with generally accepted auditing standards. d. An unqualified opinion indicates that one can rely on the auditor's report as an indication of the reliability of the financial statements, with no material exceptions. e. The Form 10-K will include Management’s report on internal controls. The accounting assumption that states all expenses incurred in providing a service must be recorded in the same period that the revenue from the service is recognized is the: a. Business entity b. Expense recognition c. Materiality d. Revenue recognition e. Time period You are managing your own consulting business. You planned to generate $15,000,000 in profits for the fiscal year ended January 31, 20X1. If you want to know the actual amount of profit for the fiscal year ended 01/31/20X1, which of the following is the best question to ask your accountant? a. What was the balance of retained earnings as of 01/31/20X1? b. What were sales for the accounting period ending 01/31/20X1? c. What was net income for the year ending 01/31/20X1? d. What was the cash balance as of 01/31/20X1? e. Was a dividend paid during the accounting period ending 01/31/20X1?

Answer 1

1.
Answer is c. Adjusting entries are necessary when cash flow and the economic transaction occur in the same accounting period
When Cash flow and economic transactions occur in same accounting period, there is no adjustment required

2.
Answer is a. Accrual basis of accounting
Revenues are recognized when earned not when cash collected

As per HOMEWORKLIB RULES we are supposed to answer 1 question, i have answered 2, so kindly post other questions separately