The accumulated amount by which a plant asset has been depreciated over its useful life is classified as
Answer(s): B
Accumulated Depreciation reports the total amount of depreciation expense recognized in all prior periods since the asset(s) were put into service.
Under accrual accounting, which of the following is/are Incorrect?
Answer(s): A
Under accrual accounting, revenues are recognized when the earnings process behind the revenues is complete and expenses are recognized in the period the goods and services are used for generating income.Therefore, revenues and expenses do not always involve actual cash flows, though revenues and costs that are related do get matched in the same period whenever such an identification is possible.
The Income Summary account is
Answer(s): C
The Income Summary account is a temporary account created especially for the closing process and is used only for flowing adjustments and closing entries through.
Use the following financial data on Enterprise:
Note that the loss on equipment is a non-cash event. Using the direct method, beginning cash balance + net cash inflow = ending cash balance Hence, beginning balance = 98,000 - (32,000 -12,500 -104,000 - 45,000 + 8,500 +1,200 - 3,700 + 14,200) = $207,300.
The following information is from the financial statements of Complex Capitalists for 1997 and 1998:Dec. 31, 1997 - 1 million common shares outstanding, capital structure all-equity March 31, 1998 - issued 200,000 common shares.May 31, 1998 - issued 800,000 warrants exercisable at a strike of 35. The average price during 1998 was 34 and the maximum price was 39. Given the above example, the Diluted EPS will use how many shares?
Answer(s): D
Options and warrants enter into the Diluted EPS calculations only if the average stock price during the period exceeds the exercise price. In this case, since the average price is less than the strike price, the warrants are anti-dilutive and ignored in the calculation of Diluted EPS. Hence, weighted number of shares used = 1 million + 9/12*200,000 = 1.15 million.
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