Question 1

Monthly and quarterly time periods are called

Accepted Answer

A) calendar periods. 
B) fiscal periods. 
C) interim periods. 
D) quarterly periods. 
A) calendar periods. 
B) fiscal periods. 
C) interim periods. 
D) quarterly periods.

Question 2

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

Accepted Answer

A) True 
 B)False

Question 3

Accounts often need to be adjusted because

Accepted Answer

A) there are never enough accounts to record all the transactions. 
B) many transactions affect more than one time period. 
C) there are always errors made in recording transactions. 
D) management can't decide what they want to report. 
A) there are never enough accounts to record all the transactions. 
B) many transactions affect more than one time period. 
C) there are always errors made in recording transactions. 
D) management can't decide what they want to report.

Question 4

An accumulated depreciation account

Accepted Answer

A) is a contra-liability account. 
B) increases on the debit side. 
C) is offset against total assets on the balance sheet. 
D) has a normal credit balance. 
A) is a contra-liability account. 
B) increases on the debit side. 
C) is offset against total assets on the balance sheet. 
D) has a normal credit balance.

Question 5

The expense recognition principle states that expenses should be matched with revenues. Another way of stating the principle is to say that

Accepted Answer

A) assets should be matched with liabilities. 
B) efforts should be matched with accomplishments. 
C) owner withdrawals should be matched with owner contributions. 
D) cash payments should be matched with cash receipts. 
A) assets should be matched with liabilities. 
B) efforts should be matched with accomplishments. 
C) owner withdrawals should be matched with owner contributions. 
D) cash payments should be matched with cash receipts.

Question 6

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

Accepted Answer

A) True 
 B)False

Question 7

The expense recognition principle requires that efforts be matched with accomplishments.

Accepted Answer

A) True 
 B)False

Question 8

As prepaid expenses expire with the passage of time, the correct adjusting entry will be a

Accepted Answer

A) debit to an asset account and a credit to an expense account. 
B) debit to an expense account and a credit to an asset account. 
C) debit to an asset account and a credit to an asset account. 
D) debit to an expense account and a credit to an expense account. 
A) debit to an asset account and a credit to an expense account. 
B) debit to an expense account and a credit to an asset account. 
C) debit to an asset account and a credit to an asset account. 
D) debit to an expense account and a credit to an expense account.

Question 9

The following is selected information from Motley Corporation for the fiscal year ending October 31, 2015.   Based on the accrual basis of accounting, what is Motley Corporation's net income for the year ending October 31, 2015?

Accepted Answer

A) $72,000. 
B) $104,000. 
C) $139,000. 
D) $155,000. 
A) $72,000. 
B) $104,000. 
C) $139,000. 
D) $155,000.

Question 10

If a company fails to make an adjusting entry to record supplies expense, then

Accepted Answer

A) stockholders' equity will be understated. 
B) expense will be understated. 
C) assets will be understated. 
D) net income will be understated. 
A) stockholders' equity will be understated. 
B) expense will be understated. 
C) assets will be understated. 
D) net income will be understated.

Question 11

An asset-expense relationship exists with

Accepted Answer

A) liability accounts. 
B) revenue accounts. 
C) prepaid expense adjusting entries. 
D) accrued expense adjusting entries. 
A) liability accounts. 
B) revenue accounts. 
C) prepaid expense adjusting entries. 
D) accrued expense adjusting entries.

Question 12

Which of the following statements is not true?

Accepted Answer

A) Comparability means using the same accounting principles from year to year within a company. 
B) Faithful representation is the quality of information that gives assurance that it is free from error. 
C) Relevant accounting information must be capable of making a difference in the decision. 
D) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decision. 
A) Comparability means using the same accounting principles from year to year within a company. 
B) Faithful representation is the quality of information that gives assurance that it is free from error. 
C) Relevant accounting information must be capable of making a difference in the decision. 
D) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decision.

Question 13

Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the time period?

Accepted Answer

A) Due from Employees. 
B) Due to Employer. 
C) Salaries and Wages Payable. 
D) Salaries and Wages Expense. 
A) Due from Employees. 
B) Due to Employer. 
C) Salaries and Wages Payable. 
D) Salaries and Wages Expense.

Question 14

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the

Accepted Answer

A) market value of the asset. 
B) blue book value of the asset. 
C) book value of the asset. 
D) depreciated difference of the asset. 
A) market value of the asset. 
B) blue book value of the asset. 
C) book value of the asset. 
D) depreciated difference of the asset.

Question 15

Unearned revenue is classified as

Accepted Answer

A) an asset account. 
B) a revenue account. 
C) a contra-revenue account. 
D) a liability account. 
A) an asset account. 
B) a revenue account. 
C) a contra-revenue account. 
D) a liability account.

Question 16

The revenue recognition principle dictates that revenue should be recognized in the accounting records

Accepted Answer

A) when cash is received. 
B) when the performance obligation is satisfied. 
C) at the end of the month. 
D) in the period that income taxes are paid. 
A) when cash is received. 
B) when the performance obligation is satisfied. 
C) at the end of the month. 
D) in the period that income taxes are paid.

Question 17

Unearned revenues are

Accepted Answer

A) cash received and a liability recorded before services are performed. 
B) revenue for services performed and recorded as liabilities before they are received. 
C) revenue for services performed but not yet received in cash or recorded. 
D) revenue for services performed and already received in cash and recorded. 
A) cash received and a liability recorded before services are performed. 
B) revenue for services performed and recorded as liabilities before they are received. 
C) revenue for services performed but not yet received in cash or recorded. 
D) revenue for services performed and already received in cash and recorded.

Question 18

Double Nickels Company purchased equipment for $9,000 on January 1, 2015. The company expects to use the equipment for 3 years. It has no salvage value. Monthly depreciation expense on the asset is

Accepted Answer

A) $0. 
B) $250. 
C) $3,000. 
D) $9,000. 
A) $0. 
B) $250. 
C) $3,000. 
D) $9,000.

Question 19

A small company may be able to justify using a cash basis of accounting if they have

Accepted Answer

A) sales under $1,000,000. 
B) no accountants on staff. 
C) few receivables and payables. 
D) all sales and purchases on account. 
A) sales under $1,000,000. 
B) no accountants on staff. 
C) few receivables and payables. 
D) all sales and purchases on account.

Question 20

The revenue recognition principle dictates that revenue be recognized in the accounting period

Accepted Answer

A) before it is earned. 
B) after it is earned. 
C) in which the performance obligation is satisfied. 
D) in which it is collected. 
A) before it is earned. 
B) after it is earned. 
C) in which the performance obligation is satisfied. 
D) in which it is collected.

Monthly and quarterly time periods are called

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

Accounts often need to be adjusted because

An accumulated depreciation account

The expense recognition principle states that expenses should be matched with revenues. Another way of stating the principle is to say that

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

The expense recognition principle requires that efforts be matched with accomplishments.

As prepaid expenses expire with the passage of time, the correct adjusting entry will be a

The following is selected information from Motley Corporation for the fiscal year ending October 31, 2015. Based on the accrual basis of accounting, what is Motley Corporation's net income for the year ending October 31, 2015?

If a company fails to make an adjusting entry to record supplies expense, then

An asset-expense relationship exists with

Which of the following statements is not true?

Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the time period?

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the

Unearned revenue is classified as

The revenue recognition principle dictates that revenue should be recognized in the accounting records

Unearned revenues are

Double Nickels Company purchased equipment for $9,000 on January 1, 2015. The company expects to use the equipment for 3 years. It has no salvage value. Monthly depreciation expense on the asset is

A small company may be able to justify using a cash basis of accounting if they have

The revenue recognition principle dictates that revenue be recognized in the accounting period

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: Adjusting the Accounts

Monthly and quarterly time periods are called

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

Accounts often need to be adjusted because

An accumulated depreciation account

The expense recognition principle states that expenses should be matched with revenues. Another way of stating the principle is to say that

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

The expense recognition principle requires that efforts be matched with accomplishments.

As prepaid expenses expire with the passage of time, the correct adjusting entry will be a

The following is selected information from Motley Corporation for the fiscal year ending October 31, 2015. Based on the accrual basis of accounting, what is Motley Corporation's net income for the year ending October 31, 2015?

If a company fails to make an adjusting entry to record supplies expense, then

An asset-expense relationship exists with

Which of the following statements is not true?

Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the time period?

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the

Unearned revenue is classified as

The revenue recognition principle dictates that revenue should be recognized in the accounting records

Unearned revenues are

Double Nickels Company purchased equipment for $9,000 on January 1, 2015. The company expects to use the equipment for 3 years. It has no salvage value. Monthly depreciation expense on the asset is

A small company may be able to justify using a cash basis of accounting if they have

The revenue recognition principle dictates that revenue be recognized in the accounting period

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters