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Author Question: Homer Services pays the monthly rent, 5,000 . The transaction would involve a a. debit to Prepaid ... (Read 110 times)

geoffrey

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on: Jul 6, 2018
Homer Services pays the monthly rent, 5,000 . The transaction would involve a
 a. debit to Prepaid Rent.
   b. debit to Rent Expense.
   c. credit to Rent Payable.
   d. debit to Cash.

Question 2

Which of the following does a discrepancy in cash flow reconciliation indicate?
 
  A) The cash outflow is greater than the cash inflow.
  B) The cash flow statement reflects entries for intercompany cash flows and transactions.
  C) Certain cash transactions are not accurately reflected in the income statement and balance sheet.
  D) There was an unexpected surge of cash flow during the period.


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parker125

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Reply #1 on: Jul 6, 2018
Answer to Question 1

b

Answer to Question 2

C
Explanation: C) The starting point for cash flow analysis is ensuring that the net cash flow for a given year matches the change in the reported cash balance from the beginning of the year to the end. A discrepancy in this regard indicates that either: (a) the cash flow statement has not been prepared correctly, or (b) all cash transactions are not accurately reflected in the income statement and balance sheet.


geoffrey

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Reply #2 on: Jul 6, 2018
Correct answers!


parker125

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Reply #3 on: Jul 6, 2018
Great! Please up vote :D


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