Question 1

Accrued revenues are revenues that have been recognized but cash has not been received before financial statements have been prepared.

Accepted Answer

A) True 
 B)False

Question 2

Accumulated Depreciation is a liability account.

Accepted Answer

A) True 
 B)False

Question 3

The adjustment for accrued salaries requires a decrease to Salaries and Wages Payable.

Accepted Answer

A) True 
 B)False

Question 4

The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is:

Accepted Answer

A) contra asset. 
B) prepayment. 
C) asset. 
D) accrued. 
A) contra asset. 
B) prepayment. 
C) asset. 
D) accrued.

Question 5

Under the cash basis of accounting:

Accepted Answer

A) revenue is recognized when services are performed. 
B) expenses are matched with the revenue that is produced. 
C) cash must be received before revenue is recognized. 
D) a promise to pay is sufficient to recognize revenue. 
A) revenue is recognized when services are performed. 
B) expenses are matched with the revenue that is produced. 
C) cash must be received before revenue is recognized. 
D) a promise to pay is sufficient to recognize revenue.

Question 6

A company usually determines the amount of supplies used during a period by:

Accepted Answer

A) adding the supplies on hand to the balance of the Supplies account. 
B) summing the amount of supplies purchased during the period. 
C) taking the difference between the supplies purchased and the supplies paid for during the period. 
D) taking the difference between the balance of the Supplies account and the cost of supplies on hand. 
A) adding the supplies on hand to the balance of the Supplies account. 
B) summing the amount of supplies purchased during the period. 
C) taking the difference between the supplies purchased and the supplies paid for during the period. 
D) taking the difference between the balance of the Supplies account and the cost of supplies on hand.

Question 7

Which of the following would not be an application of the revenue recognition or expense recognition principle?

Accepted Answer

A) Recording accrued salaries and wages expense. 
B) Recording accrued interest revenue. 
C) Recording the collection of an advance customer payment as revenue. 
D) Recording prepaid expense adjustments. 
A) Recording accrued salaries and wages expense. 
B) Recording accrued interest revenue. 
C) Recording the collection of an advance customer payment as revenue. 
D) Recording prepaid expense adjustments.

Question 8

Skypress Company collected $11200 in May of 2022 for 4 months of service which would take place from October of 2022 through January of 2023.The revenue reported from this transaction during 2022 would be:

Accepted Answer

A) $0. 
B) $8400. 
C) $11200. 
D) $2800. 
A) $0. 
B) $8400. 
C) $11200. 
D) $2800.

Question 9

Wang Company had the following transactions during 2022: F1F1F1S1F1F1F10Sales of $10800 on account
F1F1F1S1F1F1F10Collected $4800 for services to be performed in 2023
F1F1F1S1F1F1F10Paid $2600 cash in salaries for 2017
F1F1F1S1F1F1F10Purchased airline tickets for $600 in December for a trip to take place in 2023
What is Wang's 2022 net income using accrual accounting?

Accepted Answer

A) $8800 
B) $13600 
C) $13000 
D) $8200 
A) $8800 
B) $13600 
C) $13000 
D) $8200

Question 10

The accrued interest for a three month note payable of $10000 dated December 1 2017 at an interest rate of 6% is $150 on December 31 2017.

Accepted Answer

A) True 
 B)False

Question 11

The fiscal year opened for Noland Manufacturing with a $2700 balance in its prepaid insurance account.They purchased $9600 in insurance policies during the year.If $1725 of insurance has expired during the year what is the year-end balance in the prepaid insurance account?

Accepted Answer

A) $10575 
B) $12300 
C) $7875 
D) $5175 
A) $10575 
B) $12300 
C) $7875 
D) $5175

Question 12

George-Bellingham Company borrowed $6000 from Jackson County Community Bank on November 1 by issuing a 12% 3-month note.Use the following tabular analysis to determine what amounts would be reported in the December 31 financial statements: $\begin{array}{llcc}
  \underline{\text { Assets } } &=   & \underline{\text { Liabilities }} &+
\underline{ \text {  Stockholders' Equity} }
\end{array}$

$\begin{array}{c}
\begin{array}{l}
\
\underline{\text { cash }}=\
 \
\end{array}
\begin{array}{c}
\text { Interest }\
\underline{\text { Payable }}+\

\end{array}
\begin{array}{l}
\text { Notes } \
\underline{\text { Payable }} -\

\end{array} 
\begin{array}{c}
\text {common}\ 
\underline{\text {Stock}} +\

\end{array}

\begin{array}{l}
\
\underline{\text {Revenue }} -\

\end{array}

\begin{array}{lll}
\text { Supplies }\
\underline{\text {Expense}}  \

\end{array} 
\end{array}$

Accepted Answer

A) Interest Expense $180 
B) Interest Payable $120 
C) Notes Payable $6180 
D) Interest Expense $720 
A) Interest Expense $180 
B) Interest Payable $120 
C) Notes Payable $6180 
D) Interest Expense $720

Question 13

The Harris Company purchased equipment for $15000 on December 1.It is estimated that annual depreciation on the computer will be $3000.If financial statements are to be prepared on December 31 the company should make the following adjustment:

Accepted Answer

A) increase Depreciation Expense $3000; increase Accumulated Depreciation $3000. 
B) increase Depreciation Expense $250; increase Accumulated Depreciation $250. 
C) increase Depreciation Expense $12000; increase Accumulated Depreciation $12000. 
D) increase Equipment $15000; increase Accumulated Depreciation $15000. 
A) increase Depreciation Expense $3000; increase Accumulated Depreciation $3000. 
B) increase Depreciation Expense $250; increase Accumulated Depreciation $250. 
C) increase Depreciation Expense $12000; increase Accumulated Depreciation $12000. 
D) increase Equipment $15000; increase Accumulated Depreciation $15000.

Question 14

Adjustments affect at least:

Accepted Answer

A) one revenue and one expense account. 
B) one asset and one liability account. 
C) one revenue and one balance sheet account. 
D) one income statement account and one balance sheet account. 
A) one revenue and one expense account. 
B) one asset and one liability account. 
C) one revenue and one balance sheet account. 
D) one income statement account and one balance sheet account.

Question 15

The revenue recognition principle and the expense recognition principle are helpful guides used in determining net income or net loss for a period.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

If a company fails to adjust a Prepaid Rent account for rent that has expired what effect will this have on that month's financial statements?

Accepted Answer

A) Failure to make an adjustment does not affect the financial statements. 
B) Expenses will be overstated and net income and stockholders' equity will be under- staed. 
C) Assets will be overstated and net income and stockholders' equity will be understated. 
D) Assets will be overstated and net income and stockholders' equity will be overstated. 
A) Failure to make an adjustment does not affect the financial statements. 
B) Expenses will be overstated and net income and stockholders' equity will be under- staed. 
C) Assets will be overstated and net income and stockholders' equity will be understated. 
D) Assets will be overstated and net income and stockholders' equity will be overstated.

Question 18

Boyce Company purchased office supplies costing $7000 and increased Supplies for the full amount.At the end of the accounting period a physical count of office supplies revealed $1800 still on hand.The appropriate adjustment to be made at the end of the period would be:

Accepted Answer

A) increase Supplies Expense $5200; decrease Supplies $5200. 
B) increase Supplies $1800; decrease Supplies Expense $1800. 
C) increase Supplies Expense $1800; decrease Supplies $1800. 
D) increase Supplies $5200; decrease Supplies Expense $5200. 
A) increase Supplies Expense $5200; decrease Supplies $5200. 
B) increase Supplies $1800; decrease Supplies Expense $1800. 
C) increase Supplies Expense $1800; decrease Supplies $1800. 
D) increase Supplies $5200; decrease Supplies Expense $5200.

Question 19

Which of the following items describe the two classifications of adjustments?

Accepted Answer

A) Postponements and advances. 
B) Accruals and advances. 
C) Deferrals and postponements. 
D) Accruals and deferrals. 
A) Postponements and advances. 
B) Accruals and advances. 
C) Deferrals and postponements. 
D) Accruals and deferrals.

Question 20

The adjustment for unearned revenue results in an increase to an asset account and an increase to a revenue account.

Accepted Answer

A) True 
 B)False

Accrued revenues are revenues that have been recognized but cash has not been received before financial statements have been prepared.

Accumulated Depreciation is a liability account.

The adjustment for accrued salaries requires a decrease to Salaries and Wages Payable.

The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is:

Under the cash basis of accounting:

A company usually determines the amount of supplies used during a period by:

Which of the following would not be an application of the revenue recognition or expense recognition principle?

Skypress Company collected $11200 in May of 2022 for 4 months of service which would take place from October of 2022 through January of 2023.The revenue reported from this transaction during 2022 would be:

The accrued interest for a three month note payable of $10000 dated December 1 2017 at an interest rate of 6% is $150 on December 31 2017.

The fiscal year opened for Noland Manufacturing with a $2700 balance in its prepaid insurance account.They purchased $9600 in insurance policies during the year.If $1725 of insurance has expired during the year what is the year-end balance in the prepaid insurance account?

George-Bellingham Company borrowed $6000 from Jackson County Community Bank on November 1 by issuing a 12% 3-month note.Use the following tabular analysis to determine what amounts would be reported in the December 31 financial statements: = + = Interest + Notes - common + - Supplies

The Harris Company purchased equipment for $15000 on December 1.It is estimated that annual depreciation on the computer will be $3000.If financial statements are to be prepared on December 31 the company should make the following adjustment:

Adjustments affect at least:

The revenue recognition principle and the expense recognition principle are helpful guides used in determining net income or net loss for a period.

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

If a company fails to adjust a Prepaid Rent account for rent that has expired what effect will this have on that month's financial statements?

Boyce Company purchased office supplies costing $7000 and increased Supplies for the full amount.At the end of the accounting period a physical count of office supplies revealed $1800 still on hand.The appropriate adjustment to be made at the end of the period would be:

Which of the following items describe the two classifications of adjustments?

The adjustment for unearned revenue results in an increase to an asset account and an increase to a revenue account.

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

Accrued revenues are revenues that have been recognized but cash has not been received before financial statements have been prepared.

Accumulated Depreciation is a liability account.

The adjustment for accrued salaries requires a decrease to Salaries and Wages Payable.

The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is:

Under the cash basis of accounting:

A company usually determines the amount of supplies used during a period by:

Which of the following would not be an application of the revenue recognition or expense recognition principle?

Skypress Company collected $11200 in May of 2022 for 4 months of service which would take place from October of 2022 through January of 2023.The revenue reported from this transaction during 2022 would be:

The accrued interest for a three month note payable of $10000 dated December 1 2017 at an interest rate of 6% is $150 on December 31 2017.

The fiscal year opened for Noland Manufacturing with a $2700 balance in its prepaid insurance account.They purchased $9600 in insurance policies during the year.If $1725 of insurance has expired during the year what is the year-end balance in the prepaid insurance account?

George-Bellingham Company borrowed $6000 from Jackson County Community Bank on November 1 by issuing a 12% 3-month note.Use the following tabular analysis to determine what amounts would be reported in the December 31 financial statements: = + = Interest + Notes - common + - Supplies

The Harris Company purchased equipment for $15000 on December 1.It is estimated that annual depreciation on the computer will be $3000.If financial statements are to be prepared on December 31 the company should make the following adjustment:

Adjustments affect at least:

The revenue recognition principle and the expense recognition principle are helpful guides used in determining net income or net loss for a period.

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

If a company fails to adjust a Prepaid Rent account for rent that has expired what effect will this have on that month's financial statements?

Boyce Company purchased office supplies costing $7000 and increased Supplies for the full amount.At the end of the accounting period a physical count of office supplies revealed $1800 still on hand.The appropriate adjustment to be made at the end of the period would be:

Which of the following items describe the two classifications of adjustments?

The adjustment for unearned revenue results in an increase to an asset account and an increase to a revenue account.

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

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