· Question 20
An advantage of using the periodic inventory system is that it requires less record keeping than the perpetual inventory system.
· Question 21
The revenue recognition principle dictates that revenue be recognized in the accounting period in which the performance obligation is satisfied.
· Question 22
Lankston Company began the year by issuing $ 90,000 of common stock for cash. The company recorded revenues of $ 825,000, expenses of $ 720,000, and paid dividends of $ 45,000. What was Lankston‘ s net income for the year?
· Question 23
The multiple-step income statement is considered more useful than the single-step income statement because it highlights the components of net income.
· Question 24 Use the following data to calculate the current ratio. Carne Auto Supplies Balance Sheet December 31, 2014
Cash |
$ 35,000 |
Accounts payable |
$ 65,000 |
|
|
Accounts receivable 50,000 Salaries and wages payable 10,000