Question 1

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted.Which of the following statements is true?

Accepted Answer

A) Salary Expense for the year is overstated. 
B) Liabilities at the end of the year are understated. 
C) Assets at the end of the year are understated. 
D) Shareholders' equity at the end of the year is understated. 
A) Salary Expense for the year is overstated. 
B) Liabilities at the end of the year are understated. 
C) Assets at the end of the year are understated. 
D) Shareholders' equity at the end of the year is understated.

Question 2

Griffin Inc.purchased supplies costing $4,250 and debited Supplies for the full amount.At the end of the accounting period, a physical count of supplies revealed $2,100 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be

Accepted Answer

A) debit Supplies Expense, $2,100; credit Supplies, $2,100. 
B) debit Supplies Expense, $2,150; credit Supplies, $2,150. 
C) debit Supplies, $4,250; credit Supplies Expense, $4,250. 
D) debit Supplies, $2,100; credit Supplies Expense, $2,100. 
A) debit Supplies Expense, $2,100; credit Supplies, $2,100. 
B) debit Supplies Expense, $2,150; credit Supplies, $2,150. 
C) debit Supplies, $4,250; credit Supplies Expense, $4,250. 
D) debit Supplies, $2,100; credit Supplies Expense, $2,100.

Question 3

If a tenant pays a landlord rent for 3 months in advance the rent paid would be:

Accepted Answer

A) a prepayment for the landlord and the tenant. 
B) a prepayment for the landlord and deferred revenue for the tenant. 
C) a prepayment for the tenant and the landlord. 
D) a prepayment for the tenant and deferred revenue for the landlord. 
A) a prepayment for the landlord and the tenant. 
B) a prepayment for the landlord and deferred revenue for the tenant. 
C) a prepayment for the tenant and the landlord. 
D) a prepayment for the tenant and deferred revenue for the landlord.

Question 4

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 5

The Jasmine Corporation purchased a notebook computer for $3,600 on December 1.The useful life of the notebook computer is estimated to be 3 years.If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

Accepted Answer

A) debit Depreciation Expense, $1,200; credit Accumulated Depreciation-Equipment, $1,200. 
B) debit Depreciation Expense, $100; credit Accumulated Depreciation-Equipment, $100. 
C) debit Accumulated Depreciation-Equipment, $1,200; credit Depreciation Expense, $1,200. 
D) debit Equipment, $100; credit Accumulated Depreciation-Equipment, $100. 
A) debit Depreciation Expense, $1,200; credit Accumulated Depreciation-Equipment, $1,200. 
B) debit Depreciation Expense, $100; credit Accumulated Depreciation-Equipment, $100. 
C) debit Accumulated Depreciation-Equipment, $1,200; credit Depreciation Expense, $1,200. 
D) debit Equipment, $100; credit Accumulated Depreciation-Equipment, $100.

Question 6

The adjusting entry to record accrued interest on a note receivable due next year consists of a

Accepted Answer

A) debit to Interest Expense and a credit to Interest Payable. 
B) debit to Interest Receivable and a credit to Interest Revenue. 
C) debit to Interest Expense and a credit to Interest Receivable. 
D) debit to Interest Receivable and a credit to Cash. 
A) debit to Interest Expense and a credit to Interest Payable. 
B) debit to Interest Receivable and a credit to Interest Revenue. 
C) debit to Interest Expense and a credit to Interest Receivable. 
D) debit to Interest Receivable and a credit to Cash.

Question 7

What is the order of preparation of financial statements?

Accepted Answer

A) statement of income, statement of changes in equity, statement of financial position. 
B) statement of changes in equity, statement of income, statement of financial position. 
C) statement of financial position, statement of income, statement of changes in equity. 
D) statement of changes in equity, statement of financial position, statement of income. 
A) statement of income, statement of changes in equity, statement of financial position. 
B) statement of changes in equity, statement of income, statement of financial position. 
C) statement of financial position, statement of income, statement of changes in equity. 
D) statement of changes in equity, statement of financial position, statement of income.

Question 8

The first required step in the accounting cycle is

Accepted Answer

A) preparing adjusting entries. 
B) journalizing transactions. 
C) analyzing transactions. 
D) posting transactions. 
A) preparing adjusting entries. 
B) journalizing transactions. 
C) analyzing transactions. 
D) posting transactions.

Question 9

Accumulated Depreciation is a(n)

Accepted Answer

A) expense account. 
B) shareholders' equity account. 
C) liability account. 
D) contra asset account. 
A) expense account. 
B) shareholders' equity account. 
C) liability account. 
D) contra asset account.

Question 10

When a company performs a service for which payment was received in advance, a journal entry is recorded that will

Accepted Answer

A) increase revenue and decrease deferred revenue. 
B) decrease revenue and increase deferred revenue. 
C) increase cash and increase revenue. 
D) increase cash and decrease deferred revenue. 
A) increase revenue and decrease deferred revenue. 
B) decrease revenue and increase deferred revenue. 
C) increase cash and increase revenue. 
D) increase cash and decrease deferred revenue.

Question 11

The Town Laundry Ltd.purchased $5,500 worth of laundry supplies on June 2 and recorded the purchase as an asset in the Supplies account.On June 30, a count of the laundry supplies indicated only $3,000 on hand.The adjusting entry that should be made by the company on June 30 is

Accepted Answer

A) debit Supplies Expense, $3,000; credit Supplies, $3,000. 
B) debit Supplies Expense, $2,500; credit Supplies, $2,500. 
C) debit Supplies, $2,500; credit Supplies Expense, $2,500. 
D) debit Supplies, $3,000; credit Supplies Expense, $3,000. 
A) debit Supplies Expense, $3,000; credit Supplies, $3,000. 
B) debit Supplies Expense, $2,500; credit Supplies, $2,500. 
C) debit Supplies, $2,500; credit Supplies Expense, $2,500. 
D) debit Supplies, $3,000; credit Supplies Expense, $3,000.

Question 12

Revenue must be recognized when (or as) the company satisfies the performance obligation, regardless of whether or not the transaction price has been determined.

Accepted Answer

A) True 
 B)False

Question 13

Revenue recognition follows expense recognition.

Accepted Answer

A) True 
 B)False

Question 14

The purpose of the post-closing trial balance is to

Accepted Answer

A) prove that no mistakes were made. 
B) prove the equality of the permanent account balances that are carried forward into the next accounting period. 
C) prove the equality of the temporary account balances that are carried forward into the next accounting period. 
D) list all the statement of financial position accounts in alphabetical order for easy reference. 
A) prove that no mistakes were made. 
B) prove the equality of the permanent account balances that are carried forward into the next accounting period. 
C) prove the equality of the temporary account balances that are carried forward into the next accounting period. 
D) list all the statement of financial position accounts in alphabetical order for easy reference.

Question 15

On February 1, Chopper Motorcycles Ltd.signed a 5%, twelve-month bank loan payable for $168,000 to help finance increases in inventory for the spring and summer season.Assuming no entries have been made previously for the interest on this loan, what is the required adjusting entry for the interest accrued to December 31?

Accepted Answer

The answer of On February 1, Chopper Motorcycles Ltd.signed a...

Question 16

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Accepted Answer

A) True 
 B)False

Question 17

Under IFRS, which of the following is generally not a guideline for recognizing revenue?

Accepted Answer

A) When (or as)the company satisfies the performance obligation. 
B) The contract is identified with the client. 
C) Collection is reasonably assured. 
D) The transaction price is determinable. 
A) When (or as)the company satisfies the performance obligation. 
B) The contract is identified with the client. 
C) Collection is reasonably assured. 
D) The transaction price is determinable.

Question 18

Using accrual accounting, expenses are recorded and reported only

Accepted Answer

A) when they are incurred for the purpose of generating revenue, whether or not cash is paid. 
B) when they are incurred and paid at the same time. 
C) if they are paid before they are incurred. 
D) if they are paid after they are incurred. 
A) when they are incurred for the purpose of generating revenue, whether or not cash is paid. 
B) when they are incurred and paid at the same time. 
C) if they are paid before they are incurred. 
D) if they are paid after they are incurred.

Question 19

When closing entries are posted, the result is a zero balance in each statement of income account.

Accepted Answer

A) True 
 B)False

Question 20

Adjusting entries are required

Accepted Answer

A) because some costs expire with the passage of time but have not yet been recorded. 
B) when the company's net income is below budget. 
C) when expenses are recorded in the period in which they are incurred. 
D) when revenues are recorded in the period in which they are earned. 
A) because some costs expire with the passage of time but have not yet been recorded. 
B) when the company's net income is below budget. 
C) when expenses are recorded in the period in which they are incurred. 
D) when revenues are recorded in the period in which they are earned.

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted.Which of the following statements is true?

Griffin Inc.purchased supplies costing $4,250 and debited Supplies for the full amount.At the end of the accounting period, a physical count of supplies revealed $2,100 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be

If a tenant pays a landlord rent for 3 months in advance the rent paid would be:

An asset-expense relationship exists with

The Jasmine Corporation purchased a notebook computer for $3,600 on December 1.The useful life of the notebook computer is estimated to be 3 years.If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

The adjusting entry to record accrued interest on a note receivable due next year consists of a

What is the order of preparation of financial statements?

The first required step in the accounting cycle is

Accumulated Depreciation is a(n)

When a company performs a service for which payment was received in advance, a journal entry is recorded that will

The Town Laundry Ltd.purchased $5,500 worth of laundry supplies on June 2 and recorded the purchase as an asset in the Supplies account.On June 30, a count of the laundry supplies indicated only $3,000 on hand.The adjusting entry that should be made by the company on June 30 is

Revenue must be recognized when (or as) the company satisfies the performance obligation, regardless of whether or not the transaction price has been determined.

Revenue recognition follows expense recognition.

The purpose of the post-closing trial balance is to

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Under IFRS, which of the following is generally not a guideline for recognizing revenue?

Using accrual accounting, expenses are recorded and reported only

When closing entries are posted, the result is a zero balance in each statement of income account.

Adjusting entries are required

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 4: Accrual Accounting Concepts

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted.Which of the following statements is true?

Griffin Inc.purchased supplies costing $4,250 and debited Supplies for the full amount.At the end of the accounting period, a physical count of supplies revealed $2,100 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be

If a tenant pays a landlord rent for 3 months in advance the rent paid would be:

An asset-expense relationship exists with

The Jasmine Corporation purchased a notebook computer for $3,600 on December 1.The useful life of the notebook computer is estimated to be 3 years.If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

The adjusting entry to record accrued interest on a note receivable due next year consists of a

What is the order of preparation of financial statements?

The first required step in the accounting cycle is

Accumulated Depreciation is a(n)

When a company performs a service for which payment was received in advance, a journal entry is recorded that will

The Town Laundry Ltd.purchased $5,500 worth of laundry supplies on June 2 and recorded the purchase as an asset in the Supplies account.On June 30, a count of the laundry supplies indicated only $3,000 on hand.The adjusting entry that should be made by the company on June 30 is

Revenue must be recognized when (or as) the company satisfies the performance obligation, regardless of whether or not the transaction price has been determined.

Revenue recognition follows expense recognition.

The purpose of the post-closing trial balance is to

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Under IFRS, which of the following is generally not a guideline for recognizing revenue?

Using accrual accounting, expenses are recorded and reported only

When closing entries are posted, the result is a zero balance in each statement of income account.

Adjusting entries are required

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters