An asset created by prepayment of an insurance premium is:
A. Recorded as a debit to Prepaid Insurance.
B. Recorded as a debit to Unearned Revenue.
C. Not recorded in the accounting records until the insurance period expires.
D. Recorded as a credit to Prepaid Insurance.
E. Recorded as a credit to Unearned Revenue.
Answer: A
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Which of the following is most commonly associated with the treasury function?
a. recording of event data b. security of funds c. reporting of results of business events d. maintaining accounting records
The auditor of the revenue cycle of ABC Company computes an estimate of ABC's allowance for doubtful accounts and compares it to the estimate provided by ABC's management. The purpose for this procedure is to substantiate which assertion?
a. Existence of receivables. b. Cutoff of receivables. c. Valuation of receivables. d. Rights to receivables.
Well-run organizations are free of employee discontent.
Answer the following statement true (T) or false (F)
The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $34,000; Liabilities = ?; Common Stock = $6400; Revenue = $13,800; Dividends = $1450; Beginning Retained Earnings = $4450; Ending Retained Earnings = $8400.Based on this information, what was the amount of expenses reported on Calloway's income statement for the current year?
A. $9850. B. $3950. C. $8400. D. $16,800.