Question

1. The field of accounting that focuses on providing information for external decision makers is:

A) managerial accounting. B) financial accounting.

C) cost accounting. D) nonmonetary accounting.

2. The matching principle states that:

A) financial statements can be prepared for specific periods.

B) a business's activities can be sliced into small time segments.

C) all expenses should be recorded when they are incurred during the period.

D) companies should record revenue when it has been earned.

3. ________ are the expenses that occur in an entity's major line of business.

A) Selling expenses B) Administrative expenses

C) Operating expenses D) Overhead expenses

4.A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold a total of 150 units for $45 each from March 1 through December 31. What is the amount of ending inventory on December 31, if the company uses the first-in, first-out (FIFO) inventory costing method?

A) $1,500 B) $1,250

C) $1,000 D) $2,250

Answer 1

Answer (B). Finagcial Accounting Answey → J. The field of accounting that focuses on providing infovmation for external decisjon mgkerr is finmocial Accounting Financial Accounting of reporing business ov entity provjder informptjon to extermal ysers like shoreho lders, Govevment, Employees of entity, Bunkers, Deben byre Holevs, reditors, etc. Such extevnal 4sers provjde information to othersof the society. Entiy will get infor- mat/on from bystness operqtions condycled by the entiby. BqJel on Such information, the mtity will prepere the financial stakments ( Tiqding, Profit and Losos Account, Bq l9nse Sheet , Statement of Equily, ctc) and puovjle such infovmption to the extevngl ysews, Comprny will prepare such fingnciq) statements by complying with Fingncial Reporting hame work and complignce with Iguws and regylatins. All expenves shoyldbe recorded when they ne nCumed dyning the periad. Answer The matching priociple states that qll expenses shoyH be Hcorded when they are incamel during the pevjod. Jn Matchigg Concept, the Compeny matches gll the expenues with the income of that accougting perjod shayld be tylkeg. It megns thyt whenever the company inarD the expense or Whenever the compant earns the income, the company shoyld immeligtely record the such accounting trans achjon. It is irebuant thyt compny paid such expense ov recejves sych income. only OcUNYence of sych trqnsqchjon is relevant of perjod. matching concept is similay qs of Accnal Concept, Myt ching Concept lequs to an aljustment of prepapid and oytstaniag expense 99! income. 1n qcaun tag

3. Answer Opergting Expense Operating Expenie ae the expenser that occyr in n entity's majov line of bysiness. Operatin Expnses ne the expenses thqt dre incymed by the Company to ryn the daily operation of the bysineso. They are the expenies from where the Company starts its opergtjogs 9nd ends with sych occyrrence of an expense. This shows how Sush massive parts of expense totg) of orggnizgton is shared by the organi-qtion s òpergting expenses. Opeating Exprnver inclue expenses like office gnd qlminisative expenses, qdveitisings brquelling expenses, salaries and wages, 9age ihogd ov accounting fees, electricity, powes qnd fyel ,etc. abong ho (A). $ 1500 Answer Caluulqtjon of Ending nventory Cost AS per FIfo (First in First ovt) Methol. Enlins znuegbry Pyrchases (t of Goody sold Prjce Amb Ten 3 Pyrchyses 10o 20 100 2000 20 2000 100 2000 Feb.2 Pnchase 30 3000 100 00 30 30 00 Mar. sales 00 2000 so 30 to 1500 30 0ec.3 The ending inventory qr FIFO (First in first out) method where, units purchared first will be sold first is: $ 30 $ 1500 50 ynits @ %3D