Home » Accounting: Principles of Financial Accounting » Which of the following statements is correct? Which of the following statements is correct? 3. Question 3 Which of the following statements is correct? 1 / 1 point The official accounting period is called fiscal year, but financial statements (i.e. balance sheet and income statement) can be prepared for shorter periods. If revenue is recognized before the cash receipt, an asset (Accounts Receivable) decreases. The cost of the products sold is not an expense. Accounts Payable increase when the company purchases goods and pays them cash. Other Questions Of This Category Fibertech GmbH is a distributor of outdoors technical clothing. The company outsources the production of clothing to external manufacturers in Bangladesh and sells the clothing under its own brands.…Reviewing the Income Statement (questions 18 – 20) Vertikal SA imports and distributes climbing gear. Its profit and loss account for the year x5 has the following items (amounts in €000): · Debits:…For the commercial company XYZ in year x2 we know that: (1) gross profit = €50,000; (2) Change in inventories is €30,000; and (3) Purchases of inventory = €180,000. Which of the following statements…For the remaining questions, please consider the following transactions that happened in The Dorchester Company Ltd. in 2015 (amounts in £000): · Credit sales amounted to 5,000 (nothing was paid by…Understanding how accounts relate to each other (questions 10 – 13): The managers of Moreton, Inc. prepared the following summaries of their company's assets and liabilities (amounts are in €…The cash flow statement of Le Bernerhof SA showed, for year x2, CFO = €5,500 and CFI = -€10,200. The beginning and ending balances of the cash account in year x2’s balance sheet were €7,900 and…The following table shows the balance of certain accounts on the Holmes, Inc. balance sheet at the end of December 31 and the following three-day period. By December 31, the company had not yet…The following table shows the balance of certain accounts on the Holmes, Inc. balance sheet at the end of December 31 and the following three-day period. By December 31, the company had not yet…The following table shows the balance of certain accounts on the Holmes, Inc. balance sheet at the end of December 31 and the following three-day period. By December 31, the company had not yet…Understanding the difference between cash and profit (questions 4 – 5): The ABC Company recognizes credit sales of €100,000. The cost of the goods sold is €60,000. Answer the following two questions:…Which of the following statements is incorrect?Revenue from credit sales (assume all sales were on credit). Tip: you can get this number from the Accounts Receivable T account.Irwin Company obtained a five-year, €100,000 bank loan at the end of year x0. The principal had to be repaid in equal installments every December 31st starting in x1. The yearly interest rate is 4%…Which of the following statements regarding year x1 is correct?Understanding the Cash Flow Statement (questions 1 - 7): Which of the events described below for ZRH Companyis an operating activity?