Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A furniture factory's employees work overtime to finish an order that is sold on January 31.The office sends a statement to the customer in early February and payment is received by mid-February.The overtime wages should be expensed in:

Accepted Answer

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

Question 3

Failure to prepare an adjustment at the end of a period to record an accrued revenue would cause:

Accepted Answer

A) net income to be overstated. 
B) an understatement of assets and an understatement of revenues. 
C) an understatement of revenues and an understatement of liabilities. 
D) an understatement of revenues and an overstatement of liabilities. 
A) net income to be overstated. 
B) an understatement of assets and an understatement of revenues. 
C) an understatement of revenues and an understatement of liabilities. 
D) an understatement of revenues and an overstatement of liabilities.

Question 4

DeNova Real Estate signed a four-month note payable in the amount of $40000 on September 1.The note requires interest at an annual rate of 6%.The amount of interest to be accrued at the end of September is:

Accepted Answer

A) $2400. 
B) $600. 
C) $200. 
D) $450. 
A) $2400. 
B) $600. 
C) $200. 
D) $450.

Question 5

Revenue received before it is recognized and expenses paid before being used or consumed are both initially recorded as liabilities.

Accepted Answer

A) True 
 B)False

Question 6

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

Accepted Answer

A) True 
 B)False

Question 7

Expense recognition is tied to revenue recognition.

Accepted Answer

A) True 
 B)False

Question 8

Accrued revenues are revenues that have been received but not yet recognized.

Accepted Answer

A) True 
 B)False

Question 9

An accounting time period that is one year in length is called:

Accepted Answer

A) a fiscal year. 
B) an interim period. 
C) the time period assumption. 
D) a reporting period. 
A) a fiscal year. 
B) an interim period. 
C) the time period assumption. 
D) a reporting period.

Question 10

Masterfalls Corporation purchased a one-year insurance policy in January 2022 for $36000.The insurance policy is in effect from March 2022 through February 2023.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 $30000. 
B) net income and assets will be overstated by $30000. 
C) net income and assets will be understated by $6000. 
D) net income and assets will be overstated by $6000. 
A) net income and assets will be understated by $30000. 
B) net income and assets will be overstated by $30000. 
C) net income and assets will be understated by $6000. 
D) net income and assets will be overstated by $6000.

Question 11

Hoosher Enterprises purchased an 18-month insurance policy on May 31 2022 for $10800.The December 31 2022 balance sheet would report Prepaid Insurance of:

Accepted Answer

A) $0 because Prepaid Insurance is reported on the Income Statement. 
B) $4200. 
C) $6600. 
D) $10800. 
A) $0 because Prepaid Insurance is reported on the Income Statement. 
B) $4200. 
C) $6600. 
D) $10800.

Question 12

Accrued revenues are:

Accepted Answer

A) received and recorded as liabilities before they are recognized. 
B) recognized and recorded as liabilities before they are received. 
C) recognized but not yet received or recorded. 
D) recognized and already received and recorded. 
A) received and recorded as liabilities before they are recognized. 
B) recognized and recorded as liabilities before they are received. 
C) recognized but not yet received or recorded. 
D) recognized and already received and recorded.

Question 13

Financial statements can be prepared from the information provided by an adjusted tabular summary of transactions.

Accepted Answer

A) True 
 B)False

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

A furniture factory's employees work overtime to finish an order that is sold on January 31.The office sends a statement to the customer in early February and payment is received by mid-February.The overtime wages should be expensed in:

Failure to prepare an adjustment at the end of a period to record an accrued revenue would cause:

DeNova Real Estate signed a four-month note payable in the amount of $40000 on September 1.The note requires interest at an annual rate of 6%.The amount of interest to be accrued at the end of September is:

Revenue received before it is recognized and expenses paid before being used or consumed are both initially recorded as liabilities.

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

Expense recognition is tied to revenue recognition.

Accrued revenues are revenues that have been received but not yet recognized.

An accounting time period that is one year in length is called:

Masterfalls Corporation purchased a one-year insurance policy in January 2022 for $36000.The insurance policy is in effect from March 2022 through February 2023.If the company neglects to make the proper year-end adjustment for the expired insurance:

Hoosher Enterprises purchased an 18-month insurance policy on May 31 2022 for $10800.The December 31 2022 balance sheet would report Prepaid Insurance of:

Accrued revenues are:

Financial statements can be prepared from the information provided by an adjusted tabular summary of transactions.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 4: Accrual Accounting Concepts

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

A furniture factory's employees work overtime to finish an order that is sold on January 31.The office sends a statement to the customer in early February and payment is received by mid-February.The overtime wages should be expensed in:

Failure to prepare an adjustment at the end of a period to record an accrued revenue would cause:

DeNova Real Estate signed a four-month note payable in the amount of $40000 on September 1.The note requires interest at an annual rate of 6%.The amount of interest to be accrued at the end of September is:

Revenue received before it is recognized and expenses paid before being used or consumed are both initially recorded as liabilities.

The book value of a depreciable asset is always equal to its market value because depreciation is a valuation technique.

Expense recognition is tied to revenue recognition.

Accrued revenues are revenues that have been received but not yet recognized.

An accounting time period that is one year in length is called:

Masterfalls Corporation purchased a one-year insurance policy in January 2022 for $36000.The insurance policy is in effect from March 2022 through February 2023.If the company neglects to make the proper year-end adjustment for the expired insurance:

Hoosher Enterprises purchased an 18-month insurance policy on May 31 2022 for $10800.The December 31 2022 balance sheet would report Prepaid Insurance of:

Accrued revenues are:

Financial statements can be prepared from the information provided by an adjusted tabular summary of transactions.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters