Accounts Q&A for Quizzes and Assignments

Correct Answer: Revenue earned with the expenses incurred to produce the revenue Explanation The matching principle in accounting is one of the core concepts of accrual accounting, playing a vital role in ensuring the accuracy and reliability of financial statements.

Multiple Choice Options: Correct Option: 2. Accounting profit is the net income calculated as total revenue minus explicit costs such as wages, rent, and materials. Understanding Accounting Profit Accounting profit is defined as the net income earned by a company

Correct Answer: Is not generally accepted as a basis for estimating bad debts. Explanation: The direct write-off method is not in accordance with Generally Accepted Accounting Principles (GAAP) because it does not adhere to the matching principle. This method recognizes

Correct Option: The correct formula for the Accounting Rate of Return (ARR) is: ARR = (Average Accounting Profit) ÷ (Average Investment). This formula reflects the return expected from an investment in terms of accounting profit, considering the average amount invested.

Correct Answer: Add total fixed costs and total variable costs, then divide by the number of units produced. Formula: Cost per Unit = Total Fixed Costs + Total Variable Costs / Number of Units Produced What Is Cost Per Unit?

Correct Answer: Because accounting is used to communicate the financial health of a business. Accounting is referred to as the language of business because it provides a standardized way of recording, reporting, and interpreting financial transactions and information, allowing stakeholders

Options: Correct Answer:b. Assets = Liabilities + Owner’s Equity Explanation: The correct accounting equation is:Assets = Liabilities + Owner’s Equity This is the fundamental equation in accounting, representing the balance of a company’s financial situation. The error in the competitor’s

Accounting Rate of Return (ARR) Formula The formula to calculate the Accounting Rate of Return (ARR) is: ARR = (Average Annual Profit / Initial Investment) × 100 Where: Average Annual Profit is the net income generated by the investment per

The direct write-off method for accounting for bad debts is a method used to recognize and account for accounts receivable that are deemed uncollectible. Under this method, a company waits until a specific account is identified as uncollectible before writing

Answer: The correct category of accounting change from the provided options is D. Accounting principle. Explanation: In accounting, changes in how a company reports its financial data can happen for several reasons. These changes are classified into three broad categories:

Source Documents in Accounting: Source documents are the original records used to verify the occurrence of a transaction and provide evidence for accounting entries. These documents are vital for maintaining the accuracy and integrity of the financial statements. Both my

The purpose of accounting profit break-even analysis is to determine the level of sales at which a company’s total revenue equals its total costs, resulting in neither profit nor loss. This is crucial for businesses to understand the minimum sales

Correct Answer: In double-entry accounting, when money leaves your company to pay bills, it should be recorded in the credits column, not the debits column. Here’s why: Example: Why is this the correct method? In Summary:

The correct answer is: D. Revenue Why is Revenue the Correct Answer? In accrual basis accounting, revenue is recognized when it is earned, not when cash is received. This means that businesses need to account for revenue when a service

Preparing the final accounting for an estate involves a detailed and systematic process to ensure that all the estate’s assets, liabilities, and expenses are properly recorded and reported. This ensures that the estate is settled correctly before being distributed to