Answer: C Diff: 2 Objective: LO 2-2 2.2-21) Supplies expense on the Team Shirts' income statement represents only supplies that were used to earn revenue during the accounting period. The accounting rule that applies is the ________. A) going-concern assumption B) historical-cost principle C) revenue-recognition principle D) matching principle Answer: D Diff: 2 Objective: LO 2-2 2.2-22) On December 31, 2012, Twisted Pretzel was told by an appraiser that its land, which cost $100,000, was worth $120,000. How should Twisted Pretzel show this information on its financial statements prepared under U.S. GAAP? A) Report a gain of $20,000 on its income statement. B) Report land at $100,000 on its income statement. C) Report land at $120,000 on its income statement. D) Continue showing the land at its cost of $100,000. Answer: D Diff: 2 Skill: Analytic skills Objective: LO 2-2 2.2-23) On December 31, 2012, Twisted Pretzel was told by an appraiser that its land, which cost $100,000, was worth $120,000. Under IFRS, Twisted Pretzel would be allowed to: show the land on its financial statements as ________. A) an expense of $100,000 on the income statement B) an expense of $120,000 on the balance sheet C) an asset of $120,000 on the income statement D) an asset of $120,000 on the balance sheet Answer: D Diff: 3 Analytic skills, Dynamics of the global economy Objective: LO 2-2 2.2-24) For information to be useful, it must be relevant and reliable. Answer: TRUE Diff: 1 Objective: LO 2-2 2.2-25) The of a sole proprietorship should not include personal financial records as part of the financial records and statements of the business.
Answer: C Diff: 2 Objective: LO 2-2 2.2-21) Supplies expense on the Team Shirts' income statement represents only supplies that were used to earn revenue during the accounting period. The accounting rule that applies is the ________. A) going-concern assumption B) historical-cost principle C) revenue-recognition principle D) matching principle Answer: D Diff: 2 Objective: LO 2-2 2.2-22) On December 31, 2012, Twisted Pretzel was told by an appraiser that its land, which cost $100,000, was worth $120,000. How should Twisted Pretzel show this information on its financial statements prepared under U.S. GAAP? A) Report a gain of $20,000 on its income statement. B) Report land at $100,000 on its income statement. C) Report land at $120,000 on its income statement. D) Continue showing the land at its cost of $100,000. Answer: D Diff: 2 Skill: Analytic skills Objective: LO 2-2 2.2-23) On December 31, 2012, Twisted Pretzel was told by an appraiser that its land, which cost $100,000, was worth $120,000. Under IFRS, Twisted Pretzel would be allowed to: show the land on its financial statements as ________. A) an expense of $100,000 on the income statement B) an expense of $120,000 on the balance sheet C) an asset of $120,000 on the income statement D) an asset of $120,000 on the balance sheet Answer: D Diff: 3 Analytic skills, Dynamics of the global economy Objective: LO 2-2 2.2-24) For information to be useful, it must be relevant and reliable. Answer: TRUE Diff: 1 Objective: LO 2-2 2.2-25) The of a sole proprietorship should not include personal financial records as part of the financial records and statements of the business.
Test-Bank-for-Financial-Accounting-A-Business-Process-Approach-3E-3rd-Editon.docx