Question 1

Which of the following journal entries is required to close the Income Summary account of a company with a net loss?

Accepted Answer

A)  Debit Income Summary, credit Capital Stock. 
B)  Debit Income Summary, credit Retained earnings. 
C)  Credit Income Summary, debit Retained earnings. 
D)  Credit Income Summary, debit Dividends. 
A)  Debit Income Summary, credit Capital Stock. 
B)  Debit Income Summary, credit Retained earnings. 
C)  Credit Income Summary, debit Retained earnings. 
D)  Credit Income Summary, debit Dividends.

Question 2

Accumulated Depreciation

Accepted Answer

A)  increases assets. 
B)  decreases assets. 
C)  increases liabilities. 
D)  decreases liabilities. 
A)  increases assets. 
B)  decreases assets. 
C)  increases liabilities. 
D)  decreases liabilities.

Question 3

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

Accepted Answer

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

Question 4

Camp Consulting Services started business on January 1, 2016.Camp performed services for customers totaling $100,000 of which 40% remain uncollected at the end of December.Under the accrual basis, what amounts would appear on Camp Consulting's financial statements for 2016? $$\begin{array}{l}
&\text {Income Statement }&\text { Statement of Cash Flows}\
\hline a.&(\$100,000)&(\$60,000)\
b.&(\$100,000)&(\$100,000)\
c.&(\$60,000)&(\$60,000)\
d.&(\$60,000)&(\$100,000)\
\end{array}$$
 ​

Accepted Answer

The answer of Camp Consulting Services started business on January...

Question 5

____________________ is the allocation of the cost of a tangible, long-term asset over its useful life.

Accepted Answer

The answer of ____________________ is the allocation of the cost...

Question 6

Roman Industries' plant operates five days per week with a daily payroll of $6,000.Employees are paid every Saturday for the workweek just completed (Monday through Friday).The last day of the month is Wednesday, March 31.What is the amount of Wages Expense recorded on the next payday, Saturday, April 3?

Accepted Answer

A)  $ -0- 
B)  $ 30,000 
C)  $ 12,000 
D)  $ 18,000 
A)  $ -0- 
B)  $ 30,000 
C)  $ 12,000 
D)  $ 18,000

Question 7

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

Accepted Answer

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

Question 8

Income statement accounts are also known as which of the following?

Accepted Answer

A)  Nominal accounts 
B)  Real accounts 
C)  Closing accounts 
D)  Both a and c 
A)  Nominal accounts 
B)  Real accounts 
C)  Closing accounts 
D)  Both a and c

Question 9

On January 1, 2016, ABC, Inc.purchased a copier for $9,000 cash and decided to depreciate it over 5 years.What amounts associated with the copier will appear on ABC's financial statements for the year ending December 31, 2016? $$\begin{array}{l}
\text {Income Statement }&\text {Statement of Cash Flows }\
\hline  a.(\$1,800)&(\$9,000)\
b.(\$1,800)&\$0\
c.(\$9,000)&\$0\
d.\text { None of these choices. }\
\end{array}$$

Accepted Answer

The answer of On January 1, 2016, ABC, Inc.purchased a...

Question 10

Under the accrual basis of accounting, at what point in time should a fast food restaurant recognize revenue? _________________________

Accepted Answer

At the poi

Question 11

Accountants often prepare work sheets at the end of an accounting period in place of financial statements.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following concepts is important to accrual accounting?

Accepted Answer

A)  Time period, because accrual accounting divides earnings into time periods 
B)  Monetary unit, because inflation is a big factor in the environment 
C)  Cash basis, because if cash is not received, revenue is not accrued 
D)  Entity concept, because personal transactions must be separated from business transactions 
A)  Time period, because accrual accounting divides earnings into time periods 
B)  Monetary unit, because inflation is a big factor in the environment 
C)  Cash basis, because if cash is not received, revenue is not accrued 
D)  Entity concept, because personal transactions must be separated from business transactions

Question 14

Match the most probable matching method to the costs listed below.
-Taxes owed on income earned during the current period

Accepted Answer

A) Directly match a specific revenue. 
B) Indirectly match with the period during which it will provide revenue. 
C) Immediately recognize because no future benefits are expected. 
A) Directly match a specific revenue. 
B) Indirectly match with the period during which it will provide revenue. 
C) Immediately recognize because no future benefits are expected.

Question 15

Match the following choices to the listed situation.
-Rent is owed by a tenant but not yet collected

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 16

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Every adjustment involves at least one income statement and one balance sheet account.

Accepted Answer

A) True 
 B)False

Question 18

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 19

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?

Accepted Answer

A)  Assets increase and liabilities increase. 
B)  Assets increase and stockholders' equity increases. 
C)  Assets decrease and liabilities decrease. 
D)  Stockholders' equity increases and decreases by the same amount. 
A)  Assets increase and liabilities increase. 
B)  Assets increase and stockholders' equity increases. 
C)  Assets decrease and liabilities decrease. 
D)  Stockholders' equity increases and decreases by the same amount.

Question 20

Sun Corp.sells merchandise to customers.Sun should normally recognize

Accepted Answer

A)  Cash revenue only and the related expenses in the same accounting period as earned whether payment is received or not 
B)  Revenue when the cash is collected and the expenses when Mendes pays its creditor for the merchandise 
C)  Revenue and expenses after all payments are collected 
D)  Cash and credit revenue and the related expenses in the same accounting period as earned whether payment is received or not 
A)  Cash revenue only and the related expenses in the same accounting period as earned whether payment is received or not 
B)  Revenue when the cash is collected and the expenses when Mendes pays its creditor for the merchandise 
C)  Revenue and expenses after all payments are collected 
D)  Cash and credit revenue and the related expenses in the same accounting period as earned whether payment is received or not

Which of the following journal entries is required to close the Income Summary account of a company with a net loss?

Accumulated Depreciation

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

____________________ is the allocation of the cost of a tangible, long-term asset over its useful life.

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

Income statement accounts are also known as which of the following?

Under the accrual basis of accounting, at what point in time should a fast food restaurant recognize revenue? _________________________

Accountants often prepare work sheets at the end of an accounting period in place of financial statements.

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

Which of the following concepts is important to accrual accounting?

Match the most probable matching method to the costs listed below. -Taxes owed on income earned during the current period

Match the following choices to the listed situation. -Rent is owed by a tenant but not yet collected

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet.

Every adjustment involves at least one income statement and one balance sheet account.

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

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?

Sun Corp.sells merchandise to customers.Sun should normally recognize

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Exam 4: Income Measurement and Accrual Accounting

Which of the following journal entries is required to close the Income Summary account of a company with a net loss?

Accumulated Depreciation

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

____________________ is the allocation of the cost of a tangible, long-term asset over its useful life.

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

Income statement accounts are also known as which of the following?

Under the accrual basis of accounting, at what point in time should a fast food restaurant recognize revenue? _________________________

Accountants often prepare work sheets at the end of an accounting period in place of financial statements.

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

Which of the following concepts is important to accrual accounting?

Match the most probable matching method to the costs listed below. -Taxes owed on income earned during the current period

Match the following choices to the listed situation. -Rent is owed by a tenant but not yet collected

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet.

Every adjustment involves at least one income statement and one balance sheet account.

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

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?

Sun Corp.sells merchandise to customers.Sun should normally recognize

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters