Question 1

A company usually determines the amount of supplies used during a period by

Accepted Answer

A) adding the supplies on hand to the balance of the Supplies account. 
B) summing the amount of supplies purchased during the period. 
C) taking the difference between the supplies purchased and the supplies paid for during the period. 
D) taking the difference between the balance of the Supplies account and the cost of supplies on hand. 
A) adding the supplies on hand to the balance of the Supplies account. 
B) summing the amount of supplies purchased during the period. 
C) taking the difference between the supplies purchased and the supplies paid for during the period. 
D) taking the difference between the balance of the Supplies account and the cost of supplies on hand.

Question 2

175. Valuing assets at their fair value rather than at their cost is inconsistent with the:

Accepted Answer

A) economic entity assumption. 
B) historical cost principle. 
C) periodicity assumption. 
D) full disclosure principles. 
A) economic entity assumption. 
B) historical cost principle. 
C) periodicity assumption. 
D) full disclosure principles.

Question 3

In general, the shorter the time period, the difficulty of making the proper adjustments to accounts

Accepted Answer

A) is increased. 
B) is decreased. 
C) is unaffected. 
D) depends on if there is a profit or loss. 
A) is increased. 
B) is decreased. 
C) is unaffected. 
D) depends on if there is a profit or loss.

Question 4

Which of the following statements related to the adjusted trial balance is incorrect?

Accepted Answer

A) It shows the balances of all accounts at the end of the accounting period. 
B) It is prepared before adjusting entries have been made. 
C) It proves the equality of the total debit balances and the total credit balances in the ledger. 
D) Financial statements can be prepared directly from the adjusted trial balance. 
A) It shows the balances of all accounts at the end of the accounting period. 
B) It is prepared before adjusting entries have been made. 
C) It proves the equality of the total debit balances and the total credit balances in the ledger. 
D) Financial statements can be prepared directly from the adjusted trial balance.

Question 5

The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to

Accepted Answer

A) debit Rent Expense, $7,000; credit Prepaid Rent, $7,000. 
B) debit Rent Expense, $14,000; credit Prepaid Rent $14,000. 
C) debit Prepaid Rent, $7,000; credit Rent Expense, $7,000. 
D) debit Prepaid Rent, $14,000; credit Rent Expense, $14,000. 
A) debit Rent Expense, $7,000; credit Prepaid Rent, $7,000. 
B) debit Rent Expense, $14,000; credit Prepaid Rent $14,000. 
C) debit Prepaid Rent, $7,000; credit Rent Expense, $7,000. 
D) debit Prepaid Rent, $14,000; credit Rent Expense, $14,000.

Question 6

Under IFRS, income is defined as

Accepted Answer

A) revenue less expenses. 
B) revenues and gains, less expenses and losses. 
C) revenues and gains. 
D) revenues, gains, and contributions by owners. 
A) revenue less expenses. 
B) revenues and gains, less expenses and losses. 
C) revenues and gains. 
D) revenues, gains, and contributions by owners.

Question 7

Unearned revenue is a prepayment that requires an adjusting entry when services are performed.

Accepted Answer

A) True 
 B)False

Question 8

Adjusting entries are not necessary if the trial balance debit and credit column balances are equal.

Accepted Answer

A) True 
 B)False

Question 9

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

Accepted Answer

A) $0. 
B) $60,000. 
C) $90,000. 
D) $150,000. 
A) $0. 
B) $60,000. 
C) $90,000. 
D) $150,000.

Question 10

If an adjusting entry is not made for an accrued expense,

Accepted Answer

A) expenses will be overstated. 
B) liabilities will be understated. 
C) net income will be understated. 
D) stockholders' equity will be understated. 
A) expenses will be overstated. 
B) liabilities will be understated. 
C) net income will be understated. 
D) stockholders' equity will be understated.

Question 11

Alternative adjusting entries do not apply to

Accepted Answer

A) accrued revenues and accrued expenses. 
B) prepaid expenses. 
C) unearned revenues. 
D) prepaid expenses and unearned revenues. 
A) accrued revenues and accrued expenses. 
B) prepaid expenses. 
C) unearned revenues. 
D) prepaid expenses and unearned revenues.

Question 12

All of the following are characteristics of accounting information except

Accepted Answer

A) faithful representation. 
B) comparability. 
C) relevance. 
D) flexibility. 
A) faithful representation. 
B) comparability. 
C) relevance. 
D) flexibility.

Question 13

Financial statements are prepared directly from the

Accepted Answer

A) general journal. 
B) ledger. 
C) trial balance. 
D) adjusted trial balance. 
A) general journal. 
B) ledger. 
C) trial balance. 
D) adjusted trial balance.

Question 14

A contra asset account is subtracted from a related account in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

Dreamtime Laundry purchased $7,000 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $1,000 on hand. The adjusting entry that should be made by the company on June 30 is

Accepted Answer

A) Debit Supplies Expense, $1,000; Credit Supplies, $1,000. 
B) Debit Supplies, $1,000; Credit Supplies Expense, $1,000. 
C) Debit Supplies, $6,000; Credit Supplies Expense, $6,000. 
D) Debit Supplies Expense, $6,000; Credit Supplies, $6,000. 
A) Debit Supplies Expense, $1,000; Credit Supplies, $1,000. 
B) Debit Supplies, $1,000; Credit Supplies Expense, $1,000. 
C) Debit Supplies, $6,000; Credit Supplies Expense, $6,000. 
D) Debit Supplies Expense, $6,000; Credit Supplies, $6,000.

Question 16

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Accepted Answer

A) True 
 B)False

Question 17

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2015 for $75,000. The insurance policy is in effect from May 2015 through April 2016. If the company neglects to make the proper year-end adjustment for the expired insurance

Accepted Answer

A) net income and assets will be understated by $50,000. 
B) net income and assets will be overstated by $50,000. 
C) net income and assets will be understated by $25,000. 
D) net income and assets will be overstated by $25,000. 
A) net income and assets will be understated by $50,000. 
B) net income and assets will be overstated by $50,000. 
C) net income and assets will be understated by $25,000. 
D) net income and assets will be overstated by $25,000.

Question 18

Which statement is correct?

Accepted Answer

A) As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use. 
B) The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles. 
C) The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received. 
D) As long as management is ethical, there are no problems with using the cash basis of accounting. 
A) As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use. 
B) The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles. 
C) The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received. 
D) As long as management is ethical, there are no problems with using the cash basis of accounting.

Question 19

Accrual-basis accounting is allowed under

Accepted Answer

A) GAAP but not IFRS. 
B) IFRS but not GAAP. 
C) both IFRS and GAAP. 
D) neither IFRS nor GAAP. 
A) GAAP but not IFRS. 
B) IFRS but not GAAP. 
C) both IFRS and GAAP. 
D) neither IFRS nor GAAP.

Question 20

Revenue recognition under IFRS is

Accepted Answer

A) substantially different from revenue recognition under GAAP. 
B) generally the same as revenue recognition under GAAP, but with more detailed guidance. 
C) generally the same as revenue recognition under GAAP, but with less detailed guidance. 
D) exactly the same as revenue recognition under GAAP. 
A) substantially different from revenue recognition under GAAP. 
B) generally the same as revenue recognition under GAAP, but with more detailed guidance. 
C) generally the same as revenue recognition under GAAP, but with less detailed guidance. 
D) exactly the same as revenue recognition under GAAP.

A company usually determines the amount of supplies used during a period by

175. Valuing assets at their fair value rather than at their cost is inconsistent with the:

In general, the shorter the time period, the difficulty of making the proper adjustments to accounts

Which of the following statements related to the adjusted trial balance is incorrect?

The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to

Under IFRS, income is defined as

Unearned revenue is a prepayment that requires an adjusting entry when services are performed.

Adjusting entries are not necessary if the trial balance debit and credit column balances are equal.

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

If an adjusting entry is not made for an accrued expense,

Alternative adjusting entries do not apply to

All of the following are characteristics of accounting information except

Financial statements are prepared directly from the

A contra asset account is subtracted from a related account in the balance sheet.

Dreamtime Laundry purchased $7,000 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $1,000 on hand. The adjusting entry that should be made by the company on June 30 is

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2015 for $75,000. The insurance policy is in effect from May 2015 through April 2016. If the company neglects to make the proper year-end adjustment for the expired insurance

Which statement is correct?

Accrual-basis accounting is allowed under

Revenue recognition under IFRS is

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

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Exam 3: Adjusting the Accounts

A company usually determines the amount of supplies used during a period by

175. Valuing assets at their fair value rather than at their cost is inconsistent with the:

In general, the shorter the time period, the difficulty of making the proper adjustments to accounts

Which of the following statements related to the adjusted trial balance is incorrect?

The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to

Under IFRS, income is defined as

Unearned revenue is a prepayment that requires an adjusting entry when services are performed.

Adjusting entries are not necessary if the trial balance debit and credit column balances are equal.

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

If an adjusting entry is not made for an accrued expense,

Alternative adjusting entries do not apply to

All of the following are characteristics of accounting information except

Financial statements are prepared directly from the

A contra asset account is subtracted from a related account in the balance sheet.

Dreamtime Laundry purchased $7,000 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $1,000 on hand. The adjusting entry that should be made by the company on June 30 is

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2015 for $75,000. The insurance policy is in effect from May 2015 through April 2016. If the company neglects to make the proper year-end adjustment for the expired insurance

Which statement is correct?

Accrual-basis accounting is allowed under

Revenue recognition under IFRS is

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