McNally industries has a condensed income statement as shown. Using horizontal a

Question

McNally industries has a condensed income statement as shown. Using horizontal analysis, calculate the amount and percent change for sales. Round to one decimal place. a. $32,500,19,6% b. $18,000. 10.9% c. $35,000.17.7% d. $17,000, 9.4% 20. The matching concept a. addresses the relationship between the journal and the balance sheet b. determines whether the normal balance of an account is a debit or credit c. requires that the dollar amount of debits equal the dollar amount of credits on a trial balance d. states that the revenues and related expenses should be reported in the same period 21. Using accrual accounting, expenses are recorded and reported only a. when they are incurred, whether or not cash is paid b. when they are incurred and paid at the same time c. if they are paid before they are incurred d. if they are paid after they are incurred 22. The accounting concept upon which deferrals and accruals are based is a. matching b. cost c. price-level adjustment d. conservatism 23. If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry? a. increases the balance of a contra asset account b. increases the balance of an asset account c. decreases the balance of an stockholders' equity account d. increases the balance of an expense account

Explanation / Answer

19

20

States that the revenue and related expenses should be reported in the same period

21

a When they are Incurred whether or not cash is paid

22

Conservatism ie Conservatism policy of accounting

23

increases the balance of an expense account

Year 2 Year 1 Change in sales Percentage of change 198000 165500 198000-165500 32500 19.64%

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