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Wheaton Co

Question 57

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Wheaton Co.performed services for a customer on account.Indicate whether each of the following statements about this transaction is true or false.

Premises:

Responses:

Assets and equity both increase when the revenue is recognized.

True

This transaction did not affect cash flows.

False

The Company recorded an increase in revenue and a decrease in accounts receivable.

This transaction is an example of an asset exchange transaction.

Recognition of revenue would be delayed until cash was collected.

Premises:

Assets and equity both increase when the revenue is recognized.

This transaction did not affect cash flows.

The Company recorded an increase in revenue and a decrease in accounts receivable.

This transaction is an example of an asset exchange transaction.

Recognition of revenue would be delayed until cash was collected.

Responses:

True

False

Correct Answer:

Premises:

Responses:

Assets and equity both increase when the revenue is recognized.

This transaction did not affect cash flows.

The Company recorded an increase in revenue and a decrease in accounts receivable.

This transaction is an example of an asset exchange transaction.

Recognition of revenue would be delayed until cash was collected.

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