Question 1

A journal entry to record a payment on account will include a

Accepted Answer

A) debit to accounts receivable. 
B) credit to accounts receivable. 
C) debit to accounts payable. 
D) credit to accounts payable. 
A) debit to accounts receivable. 
B) credit to accounts receivable. 
C) debit to accounts payable. 
D) credit to accounts payable.

Question 2

When a company uses a periodic inventory system, the year-end entry to adjust the inventory account will debit and credit inventory as follows: $\begin{array}{lll}& \text {Beginning inventory Amount }& \text {Ending Inventory Amount }\
\text { a. } & \text { Debited } & \text { Credited } \
\text { b. } & \text { Debited } & \text { Debited } \
\text { c. } & \text { Credited } & \text { Debited } \
\text { d. } & \text { Credited } & \text { Credited }
\end{array}$

Accepted Answer

The answer of When a company uses a periodic inventory...

Question 3

All liability and stockholders' equity accounts are increased on the credit side and decreased on the debit side.

Accepted Answer

A) True 
 B)False

Question 4

Tolan Corp.'s trademark was licensed to Eddy Co.for royalties of 15% of sales of the trademarked items.Royalties are payable semiannually on March 15 for sales in July through December of the prior year, and on September 15 for sales in January through June of the same year.Tolan received the following royalties from Eddy: $$\begin{array} { c c c } 
& \text { March } 15 & \text { September } 15 \
2006 & \$ 5,000 & \$ 7,500 \
2007 & 6,000 & 8,500
\end{array}$$ Eddy estimated that sales of the trademarked items would total $40,000 for July through December 2007.In Tolan's 2007 income statement, the royalty revenue should be

Accepted Answer

A) $14,500. 
B) $16,000. 
C) $20,500. 
D) $22,000. 
A) $14,500. 
B) $16,000. 
C) $20,500. 
D) $22,000.

Question 5

Debit always means

Accepted Answer

A) right side of an account. 
B) increase. 
C) decrease. 
D) none of these. 
A) right side of an account. 
B) increase. 
C) decrease. 
D) none of these.

Question 6

On June 1, 2007, Nott Corp.loaned Horn $400,000 on a 12% note, payable in five annual installments of $80,000 beginning January 2, 2008.In connection with this loan, Horn was required to deposit $5,000 in a noninterest-bearing escrow account.The amount held in escrow is to be returned to Horn after all principal and interest payments have been made.Interest on the note is payable on the first day of each month beginning July 1, 2007.Horn made timely payments through November 1, 2007.On January 2, 2008, Nott received payment of the first principal installment plus all interest due.At December 31, 2007, Nott's interest receivable on the loan to Horn should be

Accepted Answer

A) $0. 
B) $4,000. 
C) $8,000. 
D) $12,000. 
A) $0. 
B) $4,000. 
C) $8,000. 
D) $12,000.

Question 7

Which type of account is always debited during the closing process?

Accepted Answer

A) Dividends. 
B) Expense. 
C) Revenue. 
D) Retained earnings. 
A) Dividends. 
B) Expense. 
C) Revenue. 
D) Retained earnings.

Question 8

Colaw Co.pays all salaried employees on a biweekly basis.Overtime pay, however, is paid in the next biweekly period.Colaw accrues salaries expense only at its December 31 year end.Data relating to salaries earned in December 2007 are as follows: Last payroll was paid on 12/26/07, for the 2-week period ended 12/26/07.
Overtime pay earned in the 2-week period ended 12/26/07 was $10,000.
Remaining work days in 2007 were December 29, 30, 31, on which days there was no overtime.
The recurring biweekly salaries total $180,000.
Assuming a five-day work week, Colaw should record a liability at December 31, 2007 for accrued salaries of

Accepted Answer

A) $54,000. 
B) $64,000. 
C) $108,000. 
D) $118,000. 
A) $54,000. 
B) $64,000. 
C) $108,000. 
D) $118,000.

Question 9

Which of the following is not an internal event?

Accepted Answer

A) Depreciation 
B) Using raw materials in the production process 
C) Dividend declaration and subsequent payment 
D) All of these are internal transactions. 
A) Depreciation 
B) Using raw materials in the production process 
C) Dividend declaration and subsequent payment 
D) All of these are internal transactions.

Question 10

On September 1, 2006, Lowe Co.issued a note payable to National Bank in the amount of $600,000, bearing interest at 12%, and payable in three equal annual principal payments of $200,000.On this date, the bank's prime rate was 11%.The first payment for interest and principal was made on September 1, 2007.At December 31, 2007, Lowe should record accrued interest payable of

Accepted Answer

A) $24,000. 
B) $22,000. 
C) $16,000. 
D) $14,667. 
A) $24,000. 
B) $22,000. 
C) $16,000. 
D) $14,667.

Question 11

Eaton Co.sells major household appliance service contracts for cash.The service contracts are for a one-year, two-year, or three-year period.Cash receipts from contracts are credited to Unearned Service Revenues.This account had a balance of $1,800,000 at December 31, 2007 before year-end adjustment.Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $450,000 at December 31, 2007. Service contracts still outstanding at December 31, 2007 expire as follows: $$\begin{array} { l r } 
\text { During } 2008 & \$ 380,000 \
\text { During } 2009 & 570,000 \
\text { During } 2010 & 350,000
\end{array}$$ What amount should be reported as Unearned Service Revenues in Eaton's December 31, 2007 balance sheet?

Accepted Answer

A) $1,350,000. 
B) $1,300,000. 
C) $850,000. 
D) $500,000. 
A) $1,350,000. 
B) $1,300,000. 
C) $850,000. 
D) $500,000.

Question 12

An accounting record into which the essential facts and figures in connection with all transactions are initially recorded is called the

Accepted Answer

A) ledger. 
B) account. 
C) trial balance. 
D) none of these. 
A) ledger. 
B) account. 
C) trial balance. 
D) none of these.

Question 13

Adjusting entries for prepayments record the portion of the prepayment that represents the expense incurred or the revenue earned in the current accounting period.

Accepted Answer

A) True 
 B)False

Question 14

A journal entry to record the sale of inventory on account will include a

Accepted Answer

A) debit to inventory. 
B) debit to accounts receivable. 
C) debit to sales. 
D) credit to cost of goods sold. 
A) debit to inventory. 
B) debit to accounts receivable. 
C) debit to sales. 
D) credit to cost of goods sold.

Question 15

When an item of revenue is collected and recorded in advance, it is normally called a(n) ___________ revenue.

Accepted Answer

A) accrued 
B) prepaid 
C) unearned 
D) cash 
A) accrued 
B) prepaid 
C) unearned 
D) cash

Question 16

All revenues, expenses, and the dividends account are closed through the Income Summary account.

Accepted Answer

A) True 
 B)False

Question 17

An accrued revenue can best be described as an amount

Accepted Answer

A) collected and currently matched with expenses. 
B) collected and not currently matched with expenses. 
C) not collected and currently matched with expenses. 
D) not collected and not currently matched with expenses. 
A) collected and currently matched with expenses. 
B) collected and not currently matched with expenses. 
C) not collected and currently matched with expenses. 
D) not collected and not currently matched with expenses.

Question 18

When an item of revenue or expense has been earned or incurred but not yet collected or paid, it is normally called a(n) ____________ revenue or expense.

Accepted Answer

A) prepaid 
B) adjusted 
C) estimated 
D) none of these 
A) prepaid 
B) adjusted 
C) estimated 
D) none of these

Question 19

When a corporation pays a note payable and interest,

Accepted Answer

A) the account notes payable will be increased. 
B) the account interest expense will be decreased. 
C) they will debit notes payable and interest expense. 
D) they will debit cash. 
A) the account notes payable will be increased. 
B) the account interest expense will be decreased. 
C) they will debit notes payable and interest expense. 
D) they will debit cash.

Question 20

A general journal

Accepted Answer

A) chronologically lists transactions and other events, expressed in terms of debits and credits. 
B) contains one record for each of the asset, liability, stockholders' equity, revenue, and expense accounts. 
C) lists all the increases and decreases in each account in one place. 
D) contains only adjusting entries. 
A) chronologically lists transactions and other events, expressed in terms of debits and credits. 
B) contains one record for each of the asset, liability, stockholders' equity, revenue, and expense accounts. 
C) lists all the increases and decreases in each account in one place. 
D) contains only adjusting entries.

A journal entry to record a payment on account will include a

When a company uses a periodic inventory system, the year-end entry to adjust the inventory account will debit and credit inventory as follows: Beginning inventory Amount Ending Inventory Amount a. Debited Credited b. Debited Debited c. Credited Debited d. Credited Credited

All liability and stockholders' equity accounts are increased on the credit side and decreased on the debit side.

Debit always means

Which type of account is always debited during the closing process?

Which of the following is not an internal event?

An accounting record into which the essential facts and figures in connection with all transactions are initially recorded is called the

Adjusting entries for prepayments record the portion of the prepayment that represents the expense incurred or the revenue earned in the current accounting period.

A journal entry to record the sale of inventory on account will include a

When an item of revenue is collected and recorded in advance, it is normally called a(n) ___________ revenue.

All revenues, expenses, and the dividends account are closed through the Income Summary account.

An accrued revenue can best be described as an amount

When an item of revenue or expense has been earned or incurred but not yet collected or paid, it is normally called a(n) ____________ revenue or expense.

When a corporation pays a note payable and interest,

A general journal

Financial Accounting and Accounting Standards

Conceptual Framework Underlying Financial Accounting

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Filters

Exam 3: The Accounting Information System

A journal entry to record a payment on account will include a

When a company uses a periodic inventory system, the year-end entry to adjust the inventory account will debit and credit inventory as follows: Beginning inventory Amount Ending Inventory Amount a. Debited Credited b. Debited Debited c. Credited Debited d. Credited Credited

All liability and stockholders' equity accounts are increased on the credit side and decreased on the debit side.

Debit always means

Which type of account is always debited during the closing process?

Which of the following is not an internal event?

An accounting record into which the essential facts and figures in connection with all transactions are initially recorded is called the

Adjusting entries for prepayments record the portion of the prepayment that represents the expense incurred or the revenue earned in the current accounting period.

A journal entry to record the sale of inventory on account will include a

When an item of revenue is collected and recorded in advance, it is normally called a(n) ___________ revenue.

All revenues, expenses, and the dividends account are closed through the Income Summary account.

An accrued revenue can best be described as an amount

When an item of revenue or expense has been earned or incurred but not yet collected or paid, it is normally called a(n) ____________ revenue or expense.

When a corporation pays a note payable and interest,

A general journal

Financial Accounting and Accounting Standards

Conceptual Framework Underlying Financial Accounting

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Filters