Exam 6: Presentation of Financial Performance and the Worksheet

Revenue is recognised under the historical cost accounting model when it has substantially been earned and the entity has the cash or a substantial claim to cash.

The Boaters News magazine sold five-year subscriptions during the year totalling $75 000. Assume that all subscriptions were effective from 1 January and that the calendar year is the accounting period. At 31 December, in addition to the cash which of the following should be reported on Boaters News' financial statements?

Which one of the following statements is true?

A statement of changes in equity reports on:

Drawings by owners are an expense.

Describe the nature and impact of factors that may play a role in influencing the format and content of the income statement/statement of comprehensive income?

Which of the following transactions is not an expense?

The statement of comprehensive income reflects the financial position of the business for the accounting period.

During May, the Friendly Resort had income of $10 000 and expenses of $4000. The owner withdrew $800 cash from the business during the month. If Owners' Equity on 31 May was $18 000, Owners' Equity on 1 May must have been:

Unexpired costs are found on the statement of comprehensive income.

Using the equation Income - Expenses = Profit, what could cause an increase in profit?

Leslie started a computer software firm by investing $16 000 of her own money. She spent three-quarters of it on furniture, fixtures and operating supplies for the business. After borrowing $12 000 from First National Bank, she spent one-third of the funds on computer hardware. At that point in time what balances should be recorded in her accounting system for total assets and total expenses? Total Assets Total Expenses

If the accounting period were the year ending 31 December, which of the following costs would not be reported as an expense for the year ending 31 December this year?

During the first month of operations, Kelly's Tax Service provided services and billed customers in the amount of $6000. By the end of the first month, $3600 had been collected and it was expected that the other $2400 would be collected during the following month. On Kelly's statement of comprehensive income for the first month, what amount of revenue should be reported?

Which of the following accounts would not be affected by a credit sale?

Cisco Company has the following account balances in its accounting system at year end: The net profit (or loss) for the period is:

Which of the following can Tim not recognise as an expense assuming all relate to his business?

Charging an interest cost as an expense when it should be capitalised as an asset will result in:

Income and expenses are reported on a(n):

Gross profit is the sales revenue received, less the cost of the goods sold (i.e. cost of sales) from ordinary operating activities.