acc 201 test 2

Question Content Area Under accrual accounting when is revenue recognized? a.When earned, and expenses when incurred. b.When cash is received, and expenses when cash is paid. c.When cash is received, and expenses when the costs are incurred. d.When earned, and expenses when cash is paid.

a.When earned, and expenses when incurred.

Question Content Area If the end-of-year supplies on hand totaled $200, and purchases totaled $300, and supplies on hand at the beginning of the year amounted to $100, how much will be reported as supplies expense for the current year? a.$300 b.$600 c.$400 d.$200

200 $100 (Beginning Balance) + $300 (Purchases) − $200 (Ending Balance) = $200

Question Content Area A customer's check for $25 that had been deposited into the company's checking account the previous month was returned stamped "NSF" by the bank. Which of the following journal entries is required? a.Accounts Receivable25Cash 25 b.Cash25Accounts Receivable 25 c.Account Receivable25Petty Cash 25 d.Cash25Accounts Payable 25

a.Accounts Receivable25Cash 25

Question Content Area Which of the following items would be added to the company's cash balance on a bank reconciliation? a.interest earned on the bank account b.bank service charges c.deposits in transit d.outstanding checks

a.interest earned on the bank account

The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest.Refer to the information for Accent Flooring. What is the total amount of interest the company will receive when the note is collected? a.$300 b.$450 c.$1,800 d.$150

b.$450

Which of the following activities is part of the operating cycle of a business? a.Receiving cash from the owners of the business b.Collecting cash from customers c.Purchasing building and equipment for the business d.Repaying creditors the principal loaned to the business

b.Collecting cash from customers Correct. The operating cycle is the elapsed time between the purchase of goods for resale (or the purchase of materials to produce salable goods or services) and the collection of cash from customers (presumably a larger amount of cash than was invested in the goods sold). Receiving cash from owners and repaying loan principals to creditors are financing (not operating) activities. Purchasing building and equipment are investing (not operating) activities.

When a note receivable is issued because a customer cannot pay its accounts receivable, which of the following entries is made? a.Debit Notes Receivable, credit Cash b.Debit Notes Receivable, credit Accounts Receivable c.Debit Accounts Receivable, credit Sales Revenue d.Debit Cash, credit Notes Receivable

b.Debit Notes Receivable, credit Accounts Receivable Correct. The correct entry is debit Notes Receivable, credit Accounts Receivable.

Question Content Area Which of the following entries properly closes a temporary account? a.Dividends200Retained Earnings200 b.Income Summary400Salaries Expense400 c.Accumulated Depreciation1,600Income Summary1,600 d.Income Summary20,000Service Revenue20,000

b.Income Summary400Salaries Expense400Correct.

Question Content Area Each of the following items is considered a cash equivalent except a.a 30-day certificate of deposit. b.a 180-day note issued by a local government. c.60-day corporate commercial paper. d.a 75-day U.S. Treasury bill.

b.a 180-day note issued by a local government.

The principal of a note receivable refers to the amount a.loaned plus any interest that is due. b.of money that was loaned. c.of interest due at maturity. d.factored by Visa.

b.of money that was loaned. Correct. The principal of a note receivable is the same as the amount of money that the company has loaned to the borrower. It does not include any interest.

The underlying difference between the percentage of credit sales method and the aging method is a.the percent of credit sales method is primarily concerned with the net realizable value reported on the balance sheet. b.the percent of credit sales method is primarily concerned with appropriately estimating the bad debt expense on the income statement. c.the aging method is primarily concerned with appropriately estimating the bad debt expense on the income statement. d.the aging method is primarily concerned with the accounts under the direct write-off method.

b.the percent of credit sales method is primarily concerned with appropriately estimating the bad debt expense on the income statement. Correct. The percent of credit sales method is primarily concerned with appropriately estimating the bad debt expense on the income statement.

Question Content Area A company needs to record 6 months of accrued interest on a 4-year, 12%, $12,000 promissory note payable. How much interest expense should be accrued? a.$2,160 b.$1,080 c.$720 d.$1,440

c.$720 $12,000 (Principal) × .12 (Interest Rate) × 6/12 (Time Period) = $1,440 x 6/12 = $720

All of the following are true about nonbank credit cards EXCEPT a.they may charge a higher service charge to the seller. b.they also result in a receivable for the seller because they do not immediately pay cash to the seller. c.they are usually less expensive than bank credit cards. d.some businesses may not accept nonbank cards.

c.they are usually less expensive than bank credit cards. Correct. Nonbank credit cards can be more costly than bank cards.

A 5% note receivable dated January 31 and due on December 31 of the same year will have interest due for a.10 months. b.one month. c.12 months. d.11 months.

d.11 months. Correct. The loan period is 11 months (all of February through all of December).

Internal control procedures for sales returns must be established to identify the __________ and __________ required before a sales return or a sales allowance can be recorded. a.credit card; approval process b.sale; its associated receivable c.amount of time; shipping method d.conditions; documentation

d.conditions; documentation Correct. Internal control procedures for sales returns must be established to identify the conditions and documentation required before a sales return or a sales allowance can be recorded.

Question Content Area Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2019. The note is due on April 30, 2020. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2019 and 2020?2019 2020 a.$2,000 $1,000 b.$1,000 $2,000 c.$1,000 $5,000 d.$0 $6,000

$1,000 $2,000 2019: $50,000 (Principal) × 12% (Interest) × 2/12 (Time) = $1,0002020: $50,000 (Principal) × 12% (Interest) × 4/12 (Time) = $2,000

Sales revenue may be recognized for the sale of goods or the sale of services. Which of the following statements is NOT true? a.For most retail sales, the performance obligation is satisfied at the point of sale when the product is given to the customer. b.Sellers of goods recognize revenue in the period title passes to the customer. c.Service companies recognize revenue in the period they provide the service to the customer. d.Sales of product may be recognized when a contract is drawn up for a purchase in three months.

Sales of product may be recognized when a contract is drawn up for a purchase in three months. Correct. This statement is false. Sales revenue cannot be recognized until the performance obligation is settled in three months when the goods are purchased and ownership passes to the buyer.

Question Content Area While preparing the April 30th bank reconciliation, the accountant identified the following items:Company's balance according to the general ledger$15,000Outstanding checks2,500Bank service charge15A customer's NSF check returned by the bank100What is the company's adjusted cash balance at April 30th? a.$14,885 b.$17,385 c.$12,500 d.$12,385

a.$14,885 $15,000 book balance − 100 NSF check − 15 service charge = $14,885

Question Content Area Cozy Corporation purchased supplies at a cost of $15,000 during the year. At January 1, supplies on hand were $5,000. At December 31, supplies on hand are $2,000. Calculate supplies expense for the year. a.$18,000 b.$15,000 c.$2,000 d.$13,000

a.$18,000 $5,000 (Amount on hand at Jan. 1) + $15,000 (Purchases) − $2,000 (Amount on hand at Dec. 31) = $18,000

Liberty Corporation has credit sales of $2,000,000 for the year and estimates at the end of the year that 1.5% of the credit sales will default. The allowance for doubtful accounts at the end of the year before the adjusting entry is made is a credit balance of $10,000. If Liberty uses the percentage of credit sales method, what is the estimate of the bad debt expense for the period? a.$30,000 b.$20,000 c.$10,000 d.$40,000

a.$30,000 Correct. The estimate of bad debt expense under the percentage of credit sales method is $2,000,000 × 1.5%, or $30,000.

There are seven steps in the accounting cycle. Which of the following is the fifth step? a.Adjust the accounts b.Post the transactions to the ledger c.Journalize the transactions d.Prepare a trial balance

a.Adjust the accounts Correct. The fifth step in the accounting cycle is to adjust the accounts.

There are seven steps in the accounting cycle. Which of the following is the first step? a.Analyze the transactions b.Post the transactions to the ledger c.Journalize the transactions d.Prepare a trial balance

a.Analyze the transactions Correct. The first step in the accounting cycle is analyzing transactions to determine which activities are recognized in the accounting records.

There are three kinds of accounts that have their balances carried forward from the current accounting period to future accounting periods. These accounts are called permanent accounts. Which of the following account types is classified as permanent? a.Assets b.Expenses c.Revenues d.Dividends

a.Assets Correct. Balance sheet accounts are classified as permanent accounts. Income statement accounts and dividend accounts are classified as temporary accounts and are closed at the end of each period.

Hide or show questions Question Content Area Failure to record the earned portion of unearned revenue would result in which of the following? a.Net income being understated. b.Stockholders' equity being overstated. c.No effect on total liabilities. d.Total assets being understated.

a.Net income being understated.

Question Content Area The College Store accepts MasterCard for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. MasterCard charges a 1.55% collection fee. Credit card drafts totaling $10,000 are deposited during August. Recording the sales and deposits will result in an increase in a.Service Charge Expense for $155 b.Accounts Receivable for $9,854 c.Cash for $10,000 d.Sales for $ 9,854

a.Service Charge Expense for $155

Sales revenue should be recorded when a.a purchase order is received, a shipment is sent to the customer, and an invoice is prepared. b.a purchase order is received and a shipment to the customer occurs. c.a purchase order is received. d.a product is returned by the customer.

a.a purchase order is received, a shipment is sent to the customer, and an invoice is prepared. Correct. Sales revenue should be recorded when these three internal controls are completed.

Quantity discounts are a.a reduction in the selling price granted by the seller because per-unit costs are less when larger amounts are ordered. b.an allowance made to induce the customer to keep the goods if the price is reduced. c.merchandise returned by the customer. d.a contra-revenue account.

a.a reduction in the selling price granted by the seller because per-unit costs are less when larger amounts are ordered. Correct. Quantity discounts are a reduction in the selling price granted by the seller because per-unit costs are less when larger amounts are ordered.

Accounts receivable are classified on the balance sheet as a.current assets. b.long-term liabilities. c.long-term assets. d.current liabilities.

a.current assets. Correct. Accounts receivable are classified on the balance sheet as current assets because they are expected to be collected within one year (often much sooner than that) or the current operating cycle, whichever is longer.

An order document is necessary for the buyer to be obligated to accept and pay for the ordered goods. a.This statement is true only for manufacturers. b.This statement is true only for wholesalers. c.This statement is true. d.This statement is false.

c.This statement is true. Correct. This is a true statement.

The company received a promissory note from a customer on March 1, 2019. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest.Refer to the information for Accent Flooring. At the maturity date, the customer pays the amount due for the note and interest. What entry is required on the books of Accent Flooring on the maturity date assuming that none of the interest had already been recognized? a.Increase Cash by $20,450, increase Notes Receivable by $20,000, and increase Interest Revenue by $450 b.Increase Cash by $20,450, increase Interest Revenue by $450, and decrease Notes Receivable by $20,000 c.Increase Cash and decrease Notes Receivable by $20,000 d.No entry is required; the customer pays the amount due to Accent Flooring.

b.Increase Cash by $20,450, increase Interest Revenue by $450, and decrease Notes Receivable by $20,000

A company uses accrual accounting in order to produce a month's financial statements that include the effects of activities for that month. Which of the following usually would NOT need adjusting entries for the month? a.Rent that is prepaid for the current and the next month b.Office supplies treated as a continuous business activity c.Wages that are earned by employees but not yet paid by the company d.Insurance that is prepaid for several months

b.Office supplies treated as a continuous business activity Correct. The use of office supplies is often treated as a continuous business activity because it is too costly to maintain a record of each time supplies are used. In that case, an adjusting entry is NOT needed.

Which of the following activities would be a good way for a company to manage its cash? a.Paying a late fee to suppliers in order to hold on to cash as long as possible b.Selling account receivables for less than face value c.Paying high dividends to investors to encourage potential investors to buy stock d.Stockpiling inventory to avoid shortages

b.Selling account receivables for less than face value Incorrect. Paying late fees and high dividends requires the use of cash. Good cash management suggests increasing the speed of receivable collections. Many companies sell their receivables for less than they will receive (which represents interest and return for the buyer) rather than wait for their customers to pay. This allows the company to receive the cash sooner and avoid hiring employees to service the receivables.

A receivable is money due from another business or individual. Receivables are typically categorized along three different dimensions. Which of the following is not one of these three dimensions? a.Current or noncurrent b.Tangible or intangible c.Accounts receivable or notes receivable d.Trade or nontrade

b.Tangible or intangible Correct. Receivables are classified as (1) accounts receivable or notes receivable, (2) current or noncurrent, and (3) trade or nontrade. Tangible or intangible are for other asset categories.

Occasionally, accounts receivable that are written off are later partially or entirely collected. a.This statement is true only for companies that provide a service to their customers. b.This statement is true. c.This statement is false. d.This statement is true only for companies that manufacture a product for their customers.

b.This statement is true. Correct. This statement is true.

After a company has journalized and posted all of the adjusting entries, it updates the trial balance to reflect the adjustments that have been made. This trial balance is called the a.adjusted balance sheet. b.adjusted trial balance. c.updated trial balance. d.worksheet.

b.adjusted trial balance. Correct. The adjusted trial balance contains all account balances after the adjusting entries have been made.

The matching principle requires that expenses a.be delayed to another period if the company needs to meet or exceed Wall Street expectations. b.be recorded when they are incurred, regardless of when cash is paid. c.be recorded when they are paid in cash. d.for salaries are recorded when they are paid to the employees.

b.be recorded when they are incurred, regardless of when cash is paid. Correct. The matching principle requires that revenue be recognized when earned and expenses be recognized when incurred, regardless of when cash is paid.

The purpose of closing entries is to transfer the temporary accounts to the Income Summary account. The entry to close salaries expense of $50,000 is a.debit Salaries $50,000; credit Net Income $50,000. b.debit Income Summary $50,000; credit Salaries Expense $50,000. c.debit Cash $50,000; credit Salaries Expense $50,000. d.debit Income Summary $50,000; credit Stockholders' Equity $50,000.

b.debit Income Summary $50,000; credit Salaries Expense $50,000. Correct. Debit Income Summary $50,000; credit Salaries Expense $50,000.

Adjusting entries can have a significant impact on a company's a.prior period transactions. b.financial statements. c.cash balance. d.fully completed transactions.

b.financial statements. Correct. Adjusting entries can have a significant impact on a company's financial statements.

An order document is necessary for the buyer to be obligated to accept and pay for the ordered goods. a.This statement is true only for wholesalers. b.This statement is false. c.This statement is true. d.This statement is true only for manufacturers.

c.This statement is true. Incorrect. This is a true statement.

The operating cycle transforms cash into goods and services and then back, through sales, into cash. All of the following are part of good cash management EXCEPT a.speeding up the collection of cash from customers. b.making payments to suppliers as quickly as possible. c.keeping all excess cash invested. d.keeping inventory levels as low as possible.

b.making payments to suppliers as quickly as possible. Correct. As with all payments, a good cash management principle is to delay payments as long as possible while maintaining a good relationship with the payee. The longer a company keeps cash, the more interest it can collect from its short-term investments.

Hide or show questions Question Content Area The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $2,000. What adjusting entry is necessary at January 31? a.Supplies22,000Accounts Payable22,000 b.Supplies Expense22,000Supplies20,000Accounts Payable2,000 c.Supplies Expense30,000Supplies30,000 d.Supplies Expense24,000Supplies24,000

c. Supplies Expense30,000 Supplies30,000

The following information relates to the company's November bank reconciliation:Bank statement balance$10,700Unadjusted cash balance from the company's records?Deposit in transit2,100Outstanding checks1,200Bank service charges300Interest earned on the bank account100Customer's NSF check returned by the bank400Refer to Dreammaker Kitchens. As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books? a.$300 decrease b.$400 decrease c.$600 decrease d.$100 decrease

c.$600 decrease Adjustment = ($300) service charges + ($400) NSF checks + $100 interest earned = ($600)

A company has net sales of $1,000,000; gross profit of $700,000; operating income of $300,000; net income of $100,000; and average accounts receivable of $50,000. The gross profit margin is a.10%. b.30%. c.70%. d.5%.

c.70%. Correct. $700,000/$1,000,000 = 70%.

A business may collect payment for goods or services that it sells before it delivers those goods or services. These revenues are referred to as deferred revenues. Which of the following January transactions is NOT deferred revenue at the end of the month? a.An airline ticket sold in January for travel in June b.Season tickets for sporting events c.A movie theater selling a movie ticket for this evening's movie d.Subscriptions received in advance

c.A movie theater selling a movie ticket for this evening's movie Correct. Deferred revenue exists when cash is received in one period, but the revenue is not earned until one or more future periods. When a movie ticket is sold (cash received) and used (revenue earned) in the same period, there is no deferred revenue.

Which of the following is NOT a typical column found on an accounting worksheet? a.Adjusting entries credit column b.Adjusted trial balance debit column c.Assets debit column d.Income statement credit column

c.Assets debit column Correct. An accounting worksheet typically would not have a separate debit or credit column for assets.

On the accounting worksheet, which of the following account balances would be transferred from one of the adjusted trial balance columns to a retained earnings column? a.Common stock b.Net income for the period c.Beginning retained earnings d.Ending retained earnings

c.Beginning retained earnings Correct. The beginning retained earnings balance is transferred from the adjusted trial balance to a retained earnings column (usually the credit column). The net income balance, determined at the end of the income statement debit column, is carried over to the retained earnings credit column. Both common stock, which is transferred from the adjusted trial balance, and ending retained earnings, which is determined at the end of the retained earnings columns, appear in the balance sheet credit column.

There are three key elements of accrual accounting. Which of the following is NOT one of these key elements? a.Matching principle b.Time-period assumption c.Cash-basis assumption d.Revenue recognition principle

c.Cash-basis assumption Correct. Accrual accounting does NOT follow a cash-basis approach. Rather, it is based on the time-period assumption (financial information is reported in separate, defined time periods), the revenue recognition principle (revenue is recognized when earned and payment is assured), and the matching principle (revenue is recognized when earned and expenses are recognized when incurred).

If Duke Corporation bills Liberty Advisors $15,000 for product sold during the week with terms of 2/10, n30 under the net method, how much and what account will be credited in the entry to record the sale? a.Credit Accounts Receivable for $14,700 b.Credit Sales Revenue for $15,000 c.Credit Sales Revenue for $14,700 d.Credit Accounts Receivable for $15,000

c.Credit Sales Revenue for $14,700 Correct. Sales Revenue is credited for the net amount of the sale, or $15,000 - ($15,000 × 2%) = $14,700.

Many companies pay for something in cash in advance in the current accounting period but not recognize expenses until a later period. Which of the following is the correct adjusting entry to record the $2,000 supplies expense for the last week of November for Hall Manufacturing Company when the supplies were paid in advance? a.Debit Supplies Expense $2,000; credit Retained Earnings $2,000 b.Debit Supplies Expense $2,000; credit Cash $2,000 c.Debit Supplies Expense $2,000; credit Supplies $2,000 d.Debit Supplies Expense $2,000; credit Accounts Payable $2,000

c.Debit Supplies Expense $2,000; credit Supplies $2,000 Correct. A prepaid expense adjusting entry requires a debit to an expense account (an income statement account) and a credit to an asset account (a balance sheet account).

The accounts that are used to collect the activities of only one period are considered temporary accounts. Which of the following accounts is a temporary account? a.Accounts Receivable b.Cash c.Sales Revenue d.Inventory

c.Sales Revenue Correct. Income statement and dividend accounts are classified as temporary accounts. Balance sheet accounts are classified as permanent (also called real) accounts.

Securitization involves all of the following EXCEPT a.investor participating in the process. b.packaging factored receivables. c.aging the receivables. d.factoring receivables.

c.aging the receivables. Correct. Securitization is the process by which businesses and financial institutions package factored receivables as financial instruments or securities and sell them to investors. Aging the receivables is not part of the process.

Gross profit margin is calculated by a.subtracting operating income from net sales. b.dividing net sales by gross profit. c.dividing gross profit by net sales. d.dividing operating income by net sales.

c.dividing gross profit by net sales. Correct. Gross profit margin is calculated by dividing gross profit by net sales.

Net profit margin percentage is calculated by a.subtracting operating income from net sales. b.dividing gross profit by net sales. c.dividing net income by net sales. d.dividing operating income by net sales.

c.dividing net income by net sales. Correct. Net profit margin percentage is calculated by dividing net income by net sales.

The stage of the operating cycle and cash management that focuses on speeding up collection of receivables is a.buying inventory. b.paying for inventory. c.selling inventory. d.None of these choices are correct.

c.selling inventory. Correct. The third stage is selling the inventory, which often produces receivables. Good cash management suggests increasing the speed of receivable collections.

Significant changes in sales revenue and sales returns and allowances should be investigated by management. This statement is a.true for companies that sell either products or services. b.true for companies that sell services only. c.true for companies that sell products only. d.false for all companies.

c.true for companies that sell products only. Correct. Significant changes in sales revenue and sales returns and allowances should be investigated by management for companies that sell products. Companies that sell services do not have product returns or allowances.

An unethical practice by companies that are facing sales shortfalls for the period is a.estimating bad debts. b.sellers of goods recognizing revenue in the period title passes to the customer. c.making sales on account. d.channel stuffing.

channel stuffing. Correct. Channel stuffing is an unethical practice that businesses may resort to when they fear that they may not meet earnings projections for the month.

Data for the year ended December 31 are presented below:Sales (credit)$2,500,000Sales returns and allowances50,000Accounts Receivable (December 31)640,000Allowance for Doubtful Accounts (Before adjustment at December 31)20,000Estimated amount of uncollected accounts based on aging analysis45,000Refer to AT&U Company. If the company estimates its bad debts at 1% of net credit sales, what amount will be reported as bad debt expense? a.$44,500 b.$4,500 c.$25,000 d.$24,500

d.$24,500 [$2,500,000 (Sales) − $50,000 (Sales Returns) = $2,450,000] × (1%) = $24,500

Data for the year ended December 31 are presented below:Sales (credit)$2,500,000Sales returns and allowances50,000Accounts Receivable (December 31)640,000Allowance for Doubtful Accounts (Before adjustment at December 31)20,000Estimated amount of uncollected accounts based on aging analysis45,000Refer to AT&U Company. If the company estimates its bad debt to be 2% of net credit sales, what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts? a.$19,000 b.$20,000 c.$49,000 d.$69,000

d.$69,000 $20,000 (Allowance for Doubtful Accounts balance before adjustment) + $49,000 (Adjustment) = $69,000

Question Content Area A company receiving payment of a $20,000 accounts receivable within 10 days with terms of 2/10, n/30, would record a sales discount of: a.10% of $20,000 b.(100% - 2%) x $20,000 c.(100% - 10%) x $20,000 d.2% of $20,000

d.2% of $20,000

Which of the following statements is NOT correct under accrual-basis accounting? a.Revenue is recognized as it is earned, and expenses are recognized when they are incurred. b.Accrual-basis accounting ties income measurement to selling, which is the business activity tied to generating income. c.Accrual-basis accounting, which records both cash and noncash transactions, is a more complex system than cash-basis accounting. d.Accrual-basis accounting does not tie recognition of revenues and expenses to the actual business activity.

d.Accrual-basis accounting does not tie recognition of revenues and expenses to the actual business activity. Correct. Accrual-basis accounting follows the matching principle, which requires that revenues be recognized when earned and expenses be recognized when incurred. Thus, it ties recognition of revenues and expenses to the actual business activity.

Question Content Area Which of the following adjusting entries involves the cash account? a.Accrued Expenses b.Deferred Liabilities c.Deferred Revenues d.None of these choices are correct.

d.None of these choices are correct.

Adjusting entries are journal entries made at the end of an accounting period to record the completed portion of partially completed transactions. Adjusting entries are necessary to apply the revenue recognition and matching principles. Which of the following type(s) of accounts would NOT be included in an adjusting entry? a.Assets b.Liabilities c.Revenues and expenses d.Retained Earnings

d.Retained Earnings Correct. Adjusting entries always affect both balance sheet (assets or liabilities) and income statement (revenues or expenses) accounts. Retained earnings accounts do NOT appear in adjusting entries.

The financial statements are prepared using the balances obtained from the a.balance sheet. b.trial balance. c.general ledger. d.adjusted trial balance.

d.adjusted trial balance. Correct. The financial statements are created after the adjusting entries are recorded. Thus, the adjusted trial balance is used to prepare the statements.

Cash-basis financial statements may not reflect all of the __________ and __________ of a company. a.cash, liabilities b.assets, accounts receivable c.assets, cash d.assets, liabilities

d.assets, liabilities Correct. Cash-basis financial statements may not reflect all of the assets and liabilities of a company.