When a company pays cash, does it always have to record or recognize an expense?
When a company pays cash, does it always have to record or recognize an expense?
Homework Answers
Payment of cash may not always be for expenses. Cash can be paid to creditors for amount borrowed, purchase of equipment for cash. When expense becomes due and whether it is paid or not, expense is recognised or recorded under accrual basis of accounting.
No, when a company pays cash, it does not always have to record or recognize an expense.
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When a company pays cash, does it always have to record or
recognize an expense?
A deferral Multiple Choice exists when a company pays cash after recognizing the associated expense. exists...
A deferral Multiple Choice exists when a company pays cash after recognizing the associated expense. exists when a company pays cash at the time the associated expense is recognized. exists when a company pays cash before recognizing the associated expense.
1. What generic journal entry does the issuer make to record the interest it pays semiannually?...
1. What generic journal entry does the issuer make to record the interest it pays semiannually? a. debits bond interest expense and credits cash b. debits bonds payable and credits cash c. debits cash and credits bond interest expense d. debits cash and credits bonds payable. 2. a company issues $1,000, 8%, 2-year bonds at par values. Interest is payable semiannually. What journal entry does the issuer makes to record the maturity of these bonds? a. debits bonds payable for...
When do we recognize (record) expenses related to warranties? Select One: a. When the company sells...
When do we recognize (record) expenses related to warranties? Select One: a. When the company sells the item under warranty. b. When the claim for the warranty is made by the customer. c. Half is recognized when the company sells the item under warranty, and the remaining half is recognized when the claim for the warranty is made by the customer. d. All of the above are allowed under GAAP.
How does a company account for the difference between interest expense and the cash payment of interest when bond...
How does a company account for the difference between interest expense and the cash payment of interest when bonds are issued at less than their face value? O A. The difference is accounted for using Bonds Payable OB. The difference is accounted for using Amortization of Bond Discount OC. The difference is accounted for using Amortization of Bond Premium. O D. In this situation the cash payment of interest will exceed interest expense The carrying amount of bonds issued at...
Deferred Income Tax arises when a company pays their corporate taxes late. when a company doesn't have the cash to...
Deferred Income Tax arises when a company pays their corporate taxes late. when a company doesn't have the cash to pay their tax bill. when taxable income under IRS rules is higher than taxable income under GAAP. when taxable income under IRS rules is lower than taxable income under GAAP.
When an expense account is increased: A. cash must always be credited. O B. an amount...
When an expense account is increased: A. cash must always be credited. O B. an amount is entered on the debit side of the expense account. O c. stockholders' equity is not affected. O D. an amount is entered on the credit side of the expense account.
When should a company record earnings - when the sale is made or when the customer...
When should a company record earnings - when the sale is made or when the customer actually pays for it? What about expenses; should they be recorded when the expense is incurred or when it is paid?
When does Carnival Cruise Lines recognize revenues and expenses for its cruises? Carnival Cruise Lines had...
When does Carnival Cruise Lines recognize revenues and expenses for its cruises? Carnival Cruise Lines had a record-breaking month in January 2019 in terms of number of net bookings (new bookings less cancellations.) During January 2019, Carnival booked more than 565,000 (net) guests for cruises to be taken over the next two years. Part of the reason that Carnival may be seeing increased bookings is its new LIVE concert series which features performances by many top artists, including Jennifer Hudson,...
Smith Company pays $3,000 cash for Rent Expense. What is the effect on the accounting equation?...
Smith Company pays $3,000 cash for Rent Expense. What is the effect on the accounting equation? O A. Cash decreases by $3,000 and Equity decreases by $3,000. O B. Cash decreases by $3,000 and Accounts Payable decreases by $3,000. O c. Cash decreases by $3,000 and Service Revenue decreases by $3,000. O D. The amount of total assets remains the same. Click to select your answer.
1. How does a business recognize when to create an invoice and when to create a...
1. How does a business recognize when to create an invoice and when to create a sales receipt? What are the significant differences between sales receipts and invoices? What industries will most likely use invoices over sales receipts? 2. QuickBooks Desktop records revenue when an invoice is generated even though cash has not been received. Is this an acceptable practice? Why or why not?
A deferral Multiple Choice exists when a company pays cash after recognizing the associated expense. exists when a company pays cash at the time the associated expense is recognized. exists when a company pays cash before recognizing the associated expense.
How does a company account for the difference between interest expense and the cash payment of interest when bonds are issued at less than their face value? O A. The difference is accounted for using Bonds Payable OB. The difference is accounted for using Amortization of Bond Discount OC. The difference is accounted for using Amortization of Bond Premium. O D. In this situation the cash payment of interest will exceed interest expense The carrying amount of bonds issued at...
Deferred Income Tax arises when a company pays their corporate taxes late. when a company doesn't have the cash to pay their tax bill. when taxable income under IRS rules is higher than taxable income under GAAP. when taxable income under IRS rules is lower than taxable income under GAAP.
When an expense account is increased: A. cash must always be credited. O B. an amount is entered on the debit side of the expense account. O c. stockholders' equity is not affected. O D. an amount is entered on the credit side of the expense account.
When does Carnival Cruise Lines recognize revenues and expenses for its cruises? Carnival Cruise Lines had a record-breaking month in January 2019 in terms of number of net bookings (new bookings less cancellations.) During January 2019, Carnival booked more than 565,000 (net) guests for cruises to be taken over the next two years. Part of the reason that Carnival may be seeing increased bookings is its new LIVE concert series which features performances by many top artists, including Jennifer Hudson,...
Smith Company pays $3,000 cash for Rent Expense. What is the effect on the accounting equation? O A. Cash decreases by $3,000 and Equity decreases by $3,000. O B. Cash decreases by $3,000 and Accounts Payable decreases by $3,000. O c. Cash decreases by $3,000 and Service Revenue decreases by $3,000. O D. The amount of total assets remains the same. Click to select your answer.
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