Question 1

Which of the following reflects the balances of prepayment accounts prior to adjustment?

Accepted Answer

A) Statement of financial position accounts are understated and statement of income accounts are understated. 
B) Statement of financial position accounts are overstated and statement of income accounts are overstated. 
C) Statement of financial position accounts are overstated and statement of income accounts are understated. 
D) Statement of financial position accounts are understated and statement of income accounts are overstated. 
A) Statement of financial position accounts are understated and statement of income accounts are understated. 
B) Statement of financial position accounts are overstated and statement of income accounts are overstated. 
C) Statement of financial position accounts are overstated and statement of income accounts are understated. 
D) Statement of financial position accounts are understated and statement of income accounts are overstated.

Question 2

A furniture factory's employees work overtime in February to finish an order that is sold on February 28.The office sends a statement to the customer in early March and payment is received by mid-March.The overtime salaries should be expensed in

Accepted Answer

A) February. 
B) March. 
C) the period when the workers receive their cheques. 
D) either February or March depending on when the pay period ends. 
A) February. 
B) March. 
C) the period when the workers receive their cheques. 
D) either February or March depending on when the pay period ends.

Question 3

On February 15, a local business receives an invoice for electricity used in the month of January and pays it on March 1.In which month should the business recognize the expense?

Accepted Answer

A) February 
B) January 
C) March 
D) No expense should be recorded. 
A) February 
B) January 
C) March 
D) No expense should be recorded.

Question 4

A post-closing trial balance will show

Accepted Answer

A) zero balances for all accounts. 
B) zero balances for statement of financial position accounts. 
C) only statement of financial position accounts. 
D) only statement of income accounts. 
A) zero balances for all accounts. 
B) zero balances for statement of financial position accounts. 
C) only statement of financial position accounts. 
D) only statement of income accounts.

Question 5

Best Value Trucks Inc.began the year with $1,200 of supplies on hand.During the year the company purchased $4,000 worth of supplies, debited to the Supplies account.At the end of the year, there was $1,000 worth of supplies left on hand.The adjusting entry for Supplies at the end of the year would be

Accepted Answer

The answer of Best Value Trucks Inc.began the year with...

Question 6

For a private company reporting under ASPE, adjusting entries must be prepared at least quarterly.

Accepted Answer

A) True 
 B)False

Question 7

An adjusted trial balance

Accepted Answer

A) is prepared after the financial statements are completed. 
B) proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made. 
C) is a required financial statement under generally accepted accounting principles. 
D) cannot be used to prepare financial statements. 
A) is prepared after the financial statements are completed. 
B) proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made. 
C) is a required financial statement under generally accepted accounting principles. 
D) cannot be used to prepare financial statements.

Question 8

At December 31, Witts Corp.reports Salaries Payable of $20,000 on its statement of financial position.The next payroll amounting to $50,000 is to be paid in January.What will be the journal entry to record the payment of salaries in January?

Accepted Answer

The answer of At December 31, Witts Corp.reports Salaries Payable...

Question 9

If equipment with a 5-year life was purchased on July 1, 2022 for $60,000, by December 31, 2023,

Accepted Answer

A) the accumulated depreciation would be $12,000 and the carrying amount would be $48,000. 
B) the accumulated depreciation would be $40,000 and the carrying amount would be $20,000. 
C) the accumulated depreciation would be $30,000 and the carrying amount would be $30,000. 
D) the accumulated depreciation would be $18,000 and the carrying amount would be $42,000. 
A) the accumulated depreciation would be $12,000 and the carrying amount would be $48,000. 
B) the accumulated depreciation would be $40,000 and the carrying amount would be $20,000. 
C) the accumulated depreciation would be $30,000 and the carrying amount would be $30,000. 
D) the accumulated depreciation would be $18,000 and the carrying amount would be $42,000.

Question 10

Financial statements should be prepared

Accepted Answer

A) from an adjusted trial balance. 
B) from a post-closing trial balance. 
C) using the Income Summary account. 
D) using permanent accounts only. 
A) from an adjusted trial balance. 
B) from a post-closing trial balance. 
C) using the Income Summary account. 
D) using permanent accounts only.

Question 11

The Dividends Declared account is closed to the Income Summary account at the end of each year.

Accepted Answer

A) True 
 B)False

Question 12

At December 31, 2022, before any year-end adjustments, Harvest Inc.'s Prepaid Insurance account had a balance of $2,000.It was determined that $800 of the Prepaid Insurance had expired.The adjusted balance for Prepaid Insurance at year end would be

Accepted Answer

A) $ 800. 
B) $1,200. 
C) $2,000. 
D) $2,800. 
A) $ 800. 
B) $1,200. 
C) $2,000. 
D) $2,800.

Question 13

On September 1, Piano Keys Corp.borrowed $30,000 from their bank, and signed a 5%, 3-month bank loan.Principal and interest are due on December 1.If Piano Keys prepares monthly financial statements, the adjusting entry that it should prepare for interest on September 30 would be

Accepted Answer

A) debit Interest Expense, $125; credit Interest Payable, $125. 
B) debit Interest Expense, $1,500; credit Interest Payable, $1,500. 
C) debit Bank Loan Payable, $375; credit Cash, $375. 
D) debit Cash, $30,000; credit Bank Loan Payable, $30,000. 
A) debit Interest Expense, $125; credit Interest Payable, $125. 
B) debit Interest Expense, $1,500; credit Interest Payable, $1,500. 
C) debit Bank Loan Payable, $375; credit Cash, $375. 
D) debit Cash, $30,000; credit Bank Loan Payable, $30,000.

Question 14

Net income calculated on a cash basis is the equivalent

Accepted Answer

A) to the net increase/(decrease)in cash reported on the statement of cash flows. 
B) of cash provided by operating activities reported on the statement of cash flows. 
C) of cash provided by financing activities reported on the statement of cash flows. 
D) of cash provided by investing activities reported on the statement of cash flows. 
A) to the net increase/(decrease)in cash reported on the statement of cash flows. 
B) of cash provided by operating activities reported on the statement of cash flows. 
C) of cash provided by financing activities reported on the statement of cash flows. 
D) of cash provided by investing activities reported on the statement of cash flows.

Which of the following reflects the balances of prepayment accounts prior to adjustment?

A furniture factory's employees work overtime in February to finish an order that is sold on February 28.The office sends a statement to the customer in early March and payment is received by mid-March.The overtime salaries should be expensed in

On February 15, a local business receives an invoice for electricity used in the month of January and pays it on March 1.In which month should the business recognize the expense?

A post-closing trial balance will show

For a private company reporting under ASPE, adjusting entries must be prepared at least quarterly.

An adjusted trial balance

At December 31, Witts Corp.reports Salaries Payable of $20,000 on its statement of financial position.The next payroll amounting to $50,000 is to be paid in January.What will be the journal entry to record the payment of salaries in January?

If equipment with a 5-year life was purchased on July 1, 2022 for $60,000, by December 31, 2023,

Financial statements should be prepared

The Dividends Declared account is closed to the Income Summary account at the end of each year.

At December 31, 2022, before any year-end adjustments, Harvest Inc.'s Prepaid Insurance account had a balance of $2,000.It was determined that $800 of the Prepaid Insurance had expired.The adjusted balance for Prepaid Insurance at year end would be

On September 1, Piano Keys Corp.borrowed $30,000 from their bank, and signed a 5%, 3-month bank loan.Principal and interest are due on December 1.If Piano Keys prepares monthly financial statements, the adjusting entry that it should prepare for interest on September 30 would be

Net income calculated on a cash basis is the equivalent

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

Which of the following reflects the balances of prepayment accounts prior to adjustment?

A furniture factory's employees work overtime in February to finish an order that is sold on February 28.The office sends a statement to the customer in early March and payment is received by mid-March.The overtime salaries should be expensed in

On February 15, a local business receives an invoice for electricity used in the month of January and pays it on March 1.In which month should the business recognize the expense?

A post-closing trial balance will show

For a private company reporting under ASPE, adjusting entries must be prepared at least quarterly.

An adjusted trial balance

At December 31, Witts Corp.reports Salaries Payable of $20,000 on its statement of financial position.The next payroll amounting to $50,000 is to be paid in January.What will be the journal entry to record the payment of salaries in January?

If equipment with a 5-year life was purchased on July 1, 2022 for $60,000, by December 31, 2023,

Financial statements should be prepared

The Dividends Declared account is closed to the Income Summary account at the end of each year.

At December 31, 2022, before any year-end adjustments, Harvest Inc.'s Prepaid Insurance account had a balance of $2,000.It was determined that $800 of the Prepaid Insurance had expired.The adjusted balance for Prepaid Insurance at year end would be

On September 1, Piano Keys Corp.borrowed $30,000 from their bank, and signed a 5%, 3-month bank loan.Principal and interest are due on December 1.If Piano Keys prepares monthly financial statements, the adjusting entry that it should prepare for interest on September 30 would be

Net income calculated on a cash basis is the equivalent

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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