Question 1

Balance sheet accounts are called real accounts.

Accepted Answer

A) True 
 B)False  True

Question 2

What effect does "recognizing revenue at the end of the accounting period for rent previously received in advance" have on the accounting equation for an insurance company?

Accepted Answer

A)  Stockholders' equity increases and liabilities increase 
B)  Assets increase and stockholders' equity increases 
C)  Assets decrease and liabilities decrease 
D)  Liabilities decrease and stockholders' equity increases 
A)  Stockholders' equity increases and liabilities increase 
B)  Assets increase and stockholders' equity increases 
C)  Assets decrease and liabilities decrease 
D)  Liabilities decrease and stockholders' equity increases D

Question 3

A company that forgets to recognize depreciation for the year overstates its income and assets.

Accepted Answer

A) True 
 B)False  True

Question 4

Match the following choices to the listed situation.
-One year's premium on truck insurance was paid in advance

Accepted Answer

A) a deferred expense 
B) a deferred revenue 
C) an accrued liability 
D) an accrued asset 
A) a deferred expense 
B) a deferred revenue 
C) an accrued liability 
D) an accrued asset

Question 5

Select the correct revenue recognition principle for each of the following.
-Merchandise

Accepted Answer

A) Recognize revenue over the passage of time. 
B) Recognize revenue when the customer takes possession of the product. 
C) Recognize revenue when cash is collected. 
D) Recognize revenue when service is performed. 
A) Recognize revenue over the passage of time. 
B) Recognize revenue when the customer takes possession of the product. 
C) Recognize revenue when cash is collected. 
D) Recognize revenue when service is performed.

Question 6

As a general rule, revenue is recognized at the point of sale. Which one of the following situations illustrates this rule?

Accepted Answer

A)  Products are sold to customers on credit with payment due in 30 days 
B)  Employees are paid wages the week after the wages are earned 
C)  Products are purchased for resale purposes 
D)  Interest is collected from amounts loaned to employees 
A)  Products are sold to customers on credit with payment due in 30 days 
B)  Employees are paid wages the week after the wages are earned 
C)  Products are purchased for resale purposes 
D)  Interest is collected from amounts loaned to employees

Question 7

The names of the four major types of adjusting entries are---------,
_________________________, _________________________, and _________________________.

Accepted Answer

accrued liability; a

Question 8

From the list of accounts below, determine whether the account would be a nominal account or a real account.
-Utilities Expense

Accepted Answer

A) nominal account 
B) real account 
A) nominal account 
B) real account

Question 9

Some of the steps in the accounting cycle are listed below. Select the choice that places these steps in the correct order.
1) Close the accounts.
2) Post transactions to accounts in the ledger.
3) Journalize daily transactions.
4) Record and post adjustments.
5) Prepare financial statements.

Accepted Answer

A)  2, 3, 4, 5, 1 
B)  3, 2, 4, 5, 1 
C)  3, 2, 4, 1, 5 
D)  3, 2, 5, 4, 1 
A)  2, 3, 4, 5, 1 
B)  3, 2, 4, 5, 1 
C)  3, 2, 4, 1, 5 
D)  3, 2, 5, 4, 1

Question 10

Expired costs are called assets.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

Accepted Answer

A)  Business transactions are recorded 
B)  Adjustments are recorded 
C)  Transactions are journalized 
D)  Journal entries are posted to the ledger 
A)  Business transactions are recorded 
B)  Adjustments are recorded 
C)  Transactions are journalized 
D)  Journal entries are posted to the ledger

Question 12

Ramos Corporation employs 14 workers in its retail service center. Each employee is paid $10 per hour and works 6 hours per day, Monday through Friday. Employees are paid every Friday for the workweek just ending. The last payday was Friday, December 26, on which day the employees were paid through that date.
A Compute the dollar amount of the weekly payroll.
B Determine the effect on the accounting equation of the adjusting entry needed on
Wednesday, December 31, the last day of Ramos Corporation's fiscal period.

Accepted Answer

A 6 hours × $10 per

Question 13

A hospital corporation contracted with a private company to collect fees and maintain health facilities that adjoin their property. Users of the health facility can pay cash of $10 for a daily visit or they can purchase a pass. The pass has a magnetic strip that is swiped through the entrance device each time an individual enters the facility. This subtracts daily fee from the pass balance for each day used. The passes are issued for a fee of $365, which are good for 365 days. Refunds are not issued on the pass. Last year $18,650 was collected for daily visits, $438,000 of annual passes were issued, and $206,225 of pass usage was registered on the scanning equipment. How much should the company recognize as revenue for the year? Explain how the revenue recognition rule should be applied in this case.

Accepted Answer

@#IMG-DLM& Only the amount of passes that have bee

Question 14

A company forgot to record four adjustments during 2015. Which one of the following omissions of adjustments will understate net income?

Accepted Answer

A)  Sales made during the last week of the period are not recorded 
B)  Interest on monies borrowed has not yet been recorded 
C)  Prepaid insurance is not reduced for the portion of the policy that has expired during the period 
D)  Income taxes owed but not yet paid are ignored 
A)  Sales made during the last week of the period are not recorded 
B)  Interest on monies borrowed has not yet been recorded 
C)  Prepaid insurance is not reduced for the portion of the policy that has expired during the period 
D)  Income taxes owed but not yet paid are ignored

Question 15

Innovate Company borrowed on a one-year, 10%, $150,000 note on May 1, 2014 with interest and principal to be paid at maturity. How much interest should Innovate Company report on its income statement for the year ending December 31, 2015?

Accepted Answer

A)  $10,000 
B)  $15,000 
C)  $30,000 
D)  $5,000 
A)  $10,000 
B)  $15,000 
C)  $30,000 
D)  $5,000

Question 16

The---------principle attempts to associate with the revenue of the period, all costs necessary to generate that revenue.

Accepted Answer

The answer of The---------principle attempts to associate with the revenue...

Question 17

Match the following choices to the listed situation.
-Income taxes are owed to the federal government at year end

Accepted Answer

A) a deferred expense 
B) a deferred revenue 
C) an accrued liability 
D) an accrued asset 
A) a deferred expense 
B) a deferred revenue 
C) an accrued liability 
D) an accrued asset

Question 18

An asset is always involved when revenue is recognized.

Accepted Answer

A) True 
 B)False

Question 19

Failure to record the supplies used during the year would result in which of the following?

Accepted Answer

A)  Net income being understated 
B)  An overstatement of liabilities 
C)  Stockholders' equity being overstated 
D)  Total assets being understated 
A)  Net income being understated 
B)  An overstatement of liabilities 
C)  Stockholders' equity being overstated 
D)  Total assets being understated

Question 20

An---------results when cash is received before the related amount is reported on the income statement.

Accepted Answer

The answer of An---------results when cash is received before the...

Balance sheet accounts are called real accounts.

What effect does "recognizing revenue at the end of the accounting period for rent previously received in advance" have on the accounting equation for an insurance company?

A company that forgets to recognize depreciation for the year overstates its income and assets.

Match the following choices to the listed situation. -One year's premium on truck insurance was paid in advance

Select the correct revenue recognition principle for each of the following. -Merchandise

As a general rule, revenue is recognized at the point of sale. Which one of the following situations illustrates this rule?

The names of the four major types of adjusting entries are---------, _____________, _, and _____________.

From the list of accounts below, determine whether the account would be a nominal account or a real account. -Utilities Expense

Some of the steps in the accounting cycle are listed below. Select the choice that places these steps in the correct order. 1) Close the accounts. 2) Post transactions to accounts in the ledger. 3) Journalize daily transactions. 4) Record and post adjustments. 5) Prepare financial statements.

Expired costs are called assets.

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

A company forgot to record four adjustments during 2015. Which one of the following omissions of adjustments will understate net income?

Innovate Company borrowed on a one-year, 10%, $150,000 note on May 1, 2014 with interest and principal to be paid at maturity. How much interest should Innovate Company report on its income statement for the year ending December 31, 2015?

The---------principle attempts to associate with the revenue of the period, all costs necessary to generate that revenue.

Match the following choices to the listed situation. -Income taxes are owed to the federal government at year end

An asset is always involved when revenue is recognized.

Failure to record the supplies used during the year would result in which of the following?

An---------results when cash is received before the related amount is reported on the income statement.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

Exam 4: Income Measurement and Accrual Accounting

Balance sheet accounts are called real accounts.

What effect does "recognizing revenue at the end of the accounting period for rent previously received in advance" have on the accounting equation for an insurance company?

A company that forgets to recognize depreciation for the year overstates its income and assets.

Match the following choices to the listed situation. -One year's premium on truck insurance was paid in advance

Select the correct revenue recognition principle for each of the following. -Merchandise

As a general rule, revenue is recognized at the point of sale. Which one of the following situations illustrates this rule?

The names of the four major types of adjusting entries are---------, _________________________, _________________________, and _________________________.

From the list of accounts below, determine whether the account would be a nominal account or a real account. -Utilities Expense

Some of the steps in the accounting cycle are listed below. Select the choice that places these steps in the correct order. 1) Close the accounts. 2) Post transactions to accounts in the ledger. 3) Journalize daily transactions. 4) Record and post adjustments. 5) Prepare financial statements.

Expired costs are called assets.

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

A company forgot to record four adjustments during 2015. Which one of the following omissions of adjustments will understate net income?

Innovate Company borrowed on a one-year, 10%, $150,000 note on May 1, 2014 with interest and principal to be paid at maturity. How much interest should Innovate Company report on its income statement for the year ending December 31, 2015?

The---------principle attempts to associate with the revenue of the period, all costs necessary to generate that revenue.

Match the following choices to the listed situation. -Income taxes are owed to the federal government at year end

An asset is always involved when revenue is recognized.

Failure to record the supplies used during the year would result in which of the following?

An---------results when cash is received before the related amount is reported on the income statement.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International-Financial-Reporting-Standards

Filters

The names of the four major types of adjusting entries are---------, _____________, _, and _____________.