Exam 4: Accrual Accounting Concepts

Greese Company purchased office supplies costing $7000 and increase Supplies for the full amount.At the end of the accounting period a physical count of office supplies revealed $2500 still on hand.The appropriate adjustment to be made at the end of the period would be:

Adjustments for accrued revenues:

Merando Industries employs a five-day workweek and a September 30 year-end.Normal weekly wages amount to $35000.If September 30 ends on a Wednesday what is the appropriate transaction recorded on October 2 the next payday for Merando?

Prepaid expenses are:

From an accounting standpoint the acquisition of long-lived assets is essentially a(n):

Given the data below for a firm in its first year of operation determine net income under the cash basis of accounting. Revenue recognized Accounts receivable Expenses incurred Accounts payable (related to expenses) Supplies purchased with cash \ 19,000 3,000 7,250 750 1,800

Which statement is correct?

Given the data below for a firm in its first year of operation determine net income under the accrual basis of accounting. Cash received from customers \ 45,000 Accounts receivable 12,000 Cash paid for expenses 26,000 Accounts payable (related to expenses) 3,000 Prepaid rent for next period 7,000

The accounts of a business before an adjustment is made to record accrued revenue reflect an:

An adjustment can include a(n):

An architecture firm earned $2000 for architecture services provided with the fee to be paid in the future.Nothing was recorded at the time the service was provided.If the fee has not been paid by the end of the accounting period and no adjustment is made this would cause:

At the end of the fiscal year the usual adjustment for depreciation on equipment was omitted.Which of the following statements is true?

At March 1 I.Repo Inc.reported a balance in Supplies of $200.During March the company purchased supplies for $950 and consumed supplies of $800.If no adjustment is made for supplies:

Which of the following is not generally an accounting time period?

Merando Industries employs a five-day workweek and a September 30 year-end.Normal weekly wages amount to $36000.If September 30 ends on a Wednesday what is the appropriate adjustment at fiscal year-end?

The balance in the prepaid rent account before adjustment at the end of the year is $12000 and represents three months rent paid on December 1.The adjustment required on December 31 is:

Under the accrual basis of accounting:

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the:

One of the accounting concepts upon which adjustments for prepayments and accruals are based is:

Which of the following describes an accrued expense?