How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask RD Your Own Question
RD
RD , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 8784
Experience:  MBA, CPA
510454
Type Your Finance Question Here...
RD is online now
A new question is answered every 9 seconds

2 Multiple Choice Questions

Resolved Question:

The purpose of recording depreciation on productive assets is to
a.reflect the decline in the market value of the assets each period.
b.reduce income when the company has an exceptionally profitable year.
c.be in conformity with the revenue recognition principle.
d.allocate the original cost of a productive asset to expense over its useful life.

Newell Company debited Prepaid Insurance for $600 on July 1, 2003 for a one-
year fire insurance policy. If he company prepares monthly financial statements,
failure to make an adjusting entry on July 31, for the amount of insurance that has
expired would cause
a. assets to be overstated by $600 and expenses to be understated by $600.
b. expenses to be overstated by $50 and assets to be understated by $50.
c. assets to be overstated by $50 and expenses to be understated by $50.
d. expenses to be overstated by $600 and assets to be understated by $600.
Submitted: 9 years ago.
Category: Finance
Expert:  RD replied 9 years ago.
The purpose of recording depreciation on productive assets is to
a.reflect the decline in the market value of the assets each period.
b.reduce income when the company has an exceptionally profitable year.
c.be in conformity with the revenue recognition principle.
d.allocate the original cost of a productive asset to expense over its useful life.

Newell Company debited Prepaid Insurance for $600 on July 1, 2003 for a one-
year fire insurance policy. If he company prepares monthly financial statements,
failure to make an adjusting entry on July 31, for the amount of insurance that has
expired would cause
a. assets to be overstated by $600 and expenses to be understated by $600.
b. expenses to be overstated by $50 and assets to be understated by $50.
c. assets to be overstated by $50 and expenses to be understated by $50.
d. expenses to be overstated by $600 and assets to be understated by $600.
RD and other Finance Specialists are ready to help you