Question

In: Accounting

Which of these transactions requires a debit entry to Cash? sold merchandise on account purchased supplies...

Which of these transactions requires a debit entry to Cash?

sold merchandise on account

purchased supplies for cash

collected balance due from customers

paid balance due to suppliers

Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements?

full disclosure principle

expense recognition (matching) principle

cost principle

revenue recognition principle

In capital budgeting, what does the payback method measure?

How quickly investment dollars may be recovered.

The economic life of an investment.

The profitability of an investment.

The cash flow from an investment.

Which of the following operating budgets is prepared first?

cash payments budget

production budget

cash received budget

sales budget

Preference decisions compare potential capital budgeting projects that meet screening decision criteria and will be ranked in their preference order to differentiate between alternatives with respect to all of the following characteristics except ---

political prominence

feasibility

importance

desirability

Capital budgeting investment decisions often involve all of the following except

qualitative factors or considerations

short periods of time

large amounts of money

risk

Solutions

Expert Solution

1. "Collected balance due from customers" requires a debit entry to cash.

Following entry is passed for the same:

*Date*	*General Journal*	*Debit ($)*	*Credit ($)*
XX	Cash	XX
	Accounts Receivable		XX
	(Being cash collected from customers)

2. The answer is "Full disclosure principle"

As per full disclosure principle, a business is required to report any business activities that could affect what is reported in the financial statements.

3. Payback method refers "how quickly investment dollars may be recovered". It calculates how soon is the initial investment made in a project recovered based on the expected cash inflows over the years.

4. "Sales budget" is prepared first as it serves as a basis for the other budgets.

5. "Political prominence" is not a characterstic which is used to differentiate between alternatives of capital budgeting decisions.

6. "Short periods of time" is not a factor which is considered for capital budgeting investment decisions. These decisions are usually taken for long-term projects.

ekkarill92 answered 1 year ago

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