Question 1

The IFRS standard dealing specifically with revenue recognition is based on

Accepted Answer

A) whether the revenue is realized or realizable. 
B) whether the revenue is earned. 
C) whether the revenue is realized or realizable, and earned. 
D) the probability that economic benefits will flow to the company, and reliability of measurement. 
A) whether the revenue is realized or realizable. 
B) whether the revenue is earned. 
C) whether the revenue is realized or realizable, and earned. 
D) the probability that economic benefits will flow to the company, and reliability of measurement.

Question 2

Characteristics associated with faithfully representative accounting information are

Accepted Answer

A) verifiable and timely. 
B) neutral and verifiable. 
C) complete and neutral. 
D) relevance and verifiable. 
A) verifiable and timely. 
B) neutral and verifiable. 
C) complete and neutral. 
D) relevance and verifiable.

Question 3

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

Accepted Answer

A) an expense should be recorded when the bill is received. 
B) an expense should be recorded when the cash is paid out. 
C) an adjusting entry should be made recognizing the expense. 
D) it is optional whether to record the expense before the bill is received. 
A) an expense should be recorded when the bill is received. 
B) an expense should be recorded when the cash is paid out. 
C) an adjusting entry should be made recognizing the expense. 
D) it is optional whether to record the expense before the bill is received.

Question 4

On January 1, 2015, Superfuzz Company purchased equipment for $40,000. The company is depreciating the equipment at the rate of $800 per month. The book value of the equipment at December 31, 2015 is

Accepted Answer

A) $0. 
B) $9,600. 
C) $30,400. 
D) $40,000. 
A) $0. 
B) $9,600. 
C) $30,400. 
D) $40,000.

Question 5

The procedures of the closing process are applicable to all companies when they are using

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 6

Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

Accepted Answer

A) Failure to make the adjustment does not affect the February financial statements. 
B) Expenses will be overstated by $4,500 and net income and stockholders' equity will be understated by $4,500. 
C) Assets will be overstated by $9,000 and net income and stockholders' equity will be understated by $9,000. 
D) Assets will be overstated by $4,500 and net income and stockholders' equity will be overstated by $4,500. 
A) Failure to make the adjustment does not affect the February financial statements. 
B) Expenses will be overstated by $4,500 and net income and stockholders' equity will be understated by $4,500. 
C) Assets will be overstated by $9,000 and net income and stockholders' equity will be understated by $9,000. 
D) Assets will be overstated by $4,500 and net income and stockholders' equity will be overstated by $4,500.

Question 7

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

Accepted Answer

A) True 
 B)False

Question 8

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

Accepted Answer

A) True 
 B)False

Question 9

Book value is also referred to as

Accepted Answer

A) accumulated depreciation. 
B) carrying value. 
C) fair value. 
D) original cost. 
A) accumulated depreciation. 
B) carrying value. 
C) fair value. 
D) original cost.

Question 10

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

Accepted Answer

A) Cash. 
B) Prepaid Rent. 
C) Unearned Rent Revenue. 
D) Rent Revenue. 
A) Cash. 
B) Prepaid Rent. 
C) Unearned Rent Revenue. 
D) Rent Revenue.

Question 11

Accumulated Depreciation is a liability account and has a normal credit account balance.

Accepted Answer

A) True 
 B)False

Question 12

A company spends $15 million dollars for an office building. Over what period should the cost be written off?

Accepted Answer

A) When the $15 million is expended in cash. 
B) All in the first year. 
C) Over the useful life of the building. 
D) After $15 million in revenue is recognized. 
A) When the $15 million is expended in cash. 
B) All in the first year. 
C) Over the useful life of the building. 
D) After $15 million in revenue is recognized.

Question 13

Mary Chain Investments purchased an 18-month insurance policy on May 31, 2015 for $3,600. The December 31, 2015 balance sheet would report Prepaid Insurance of

Accepted Answer

A) $0 because Prepaid Insurance is reported on the Income Statement. 
B) $1,400. 
C) $2,200. 
D) $3,600. 
A) $0 because Prepaid Insurance is reported on the Income Statement. 
B) $1,400. 
C) $2,200. 
D) $3,600.

Question 14

Which of the following is in accordance with generally accepted accounting principles?

Accepted Answer

A) Accrual-basis accounting 
B) Cash-basis accounting 
C) Both accrual-basis and cash-basis accounting 
D) Neither accrual-basis nor cash-basis accounting 
A) Accrual-basis accounting 
B) Cash-basis accounting 
C) Both accrual-basis and cash-basis accounting 
D) Neither accrual-basis nor cash-basis accounting

Question 15

The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset.

Accepted Answer

A) True 
 B)False

Question 16

Every adjusting entry affects one balance sheet account and one income statement account.

Accepted Answer

A) True 
 B)False

Question 17

Financial statements can be prepared from the information provided by an adjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 18

The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

Accepted Answer

A) True 
 B)False

Question 19

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, three games were played. The adjusting journal entry at September 30

Accepted Answer

A) is not required.No adjusting entries will be made until the end of the season in November. 
B) will include a debit to Cash and a credit to Ticket Revenue for $60,000. 
C) will include a debit to Unearned Ticket Revenue and a credit to Ticket Revenue for $90,000. 
D) will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for $80,000. 
A) is not required.No adjusting entries will be made until the end of the season in November. 
B) will include a debit to Cash and a credit to Ticket Revenue for $60,000. 
C) will include a debit to Unearned Ticket Revenue and a credit to Ticket Revenue for $90,000. 
D) will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for $80,000.

Question 20

If accounting information has relevance, it is useful in making predictions about

Accepted Answer

A) future tax audits. 
B) new accounting principles. 
C) foreign currency exchange rates. 
D) the future events of a company. 
A) future tax audits. 
B) new accounting principles. 
C) foreign currency exchange rates. 
D) the future events of a company.

The IFRS standard dealing specifically with revenue recognition is based on

Characteristics associated with faithfully representative accounting information are

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

On January 1, 2015, Superfuzz Company purchased equipment for $40,000. The company is depreciating the equipment at the rate of $800 per month. The book value of the equipment at December 31, 2015 is

The procedures of the closing process are applicable to all companies when they are using

Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

Book value is also referred to as

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

Accumulated Depreciation is a liability account and has a normal credit account balance.

A company spends $15 million dollars for an office building. Over what period should the cost be written off?

Mary Chain Investments purchased an 18-month insurance policy on May 31, 2015 for $3,600. The December 31, 2015 balance sheet would report Prepaid Insurance of

Which of the following is in accordance with generally accepted accounting principles?

The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset.

Every adjusting entry affects one balance sheet account and one income statement account.

Financial statements can be prepared from the information provided by an adjusted trial balance.

The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

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, three games were played. The adjusting journal entry at September 30

If accounting information has relevance, it is useful in making predictions about

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

The IFRS standard dealing specifically with revenue recognition is based on

Characteristics associated with faithfully representative accounting information are

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

On January 1, 2015, Superfuzz Company purchased equipment for $40,000. The company is depreciating the equipment at the rate of $800 per month. The book value of the equipment at December 31, 2015 is

The procedures of the closing process are applicable to all companies when they are using

Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

Book value is also referred to as

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

Accumulated Depreciation is a liability account and has a normal credit account balance.

A company spends $15 million dollars for an office building. Over what period should the cost be written off?

Mary Chain Investments purchased an 18-month insurance policy on May 31, 2015 for $3,600. The December 31, 2015 balance sheet would report Prepaid Insurance of

Which of the following is in accordance with generally accepted accounting principles?

The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset.

Every adjusting entry affects one balance sheet account and one income statement account.

Financial statements can be prepared from the information provided by an adjusted trial balance.

The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

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, three games were played. The adjusting journal entry at September 30

If accounting information has relevance, it is useful in making predictions about

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