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Accounting adjustment and financial statement

Authored by Aida Nadzri

Business

University

Used 13+ times

Accounting adjustment and financial statement
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following statements is NOT true about accruals?

Accruals involve the recognition of revenues or expenses that have been earned or incurred, but not yet received or paid

Accruals are recorded at the time of payment or receipt

Accruals are used to match revenues and expenses to the period in which they are earned or incurred

Accruals are used to smooth out fluctuations in cash flows

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT an example of an accrual?

Recognizing revenue that has been earned but not yet received

Recognizing expenses that have been incurred but not yet paid

Recognizing a liability for a product that has been shipped but not yet invoiced

Paying for a product or service before it has been received or consumed

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When should a prepayment be recognized as an expense?

When the prepayment is made

When the product or service is received or consumed

When the product or service is invoiced

When the prepayment is refunded

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a common type of prepayment?

Rent payments

Insurance premiums

Taxes

Employee salaries

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a key component of the statement of profit or loss?

Revenues

Expenses

Net income

Net asset

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is not a key component of the statement of financial position?

Asset

Liability

Income

Equity

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The statement of profit or loss is also known as the:

Income statement

Balance sheet

Cash flow statement

Statement of changes in equity

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