Question 1

The balance in the account, Rent Collected in Advance, is reported as an asset on the balance sheet of the landlord.

Accepted Answer

A) True 
 B)False

Question 2

A cost can be an asset or expense depending on whether the future economic benefits have expired or not.

Accepted Answer

A) True 
 B)False

Question 3

For each transaction select the letter of the type of adjustment that would be required
-Revenue is earned during the current period, although customers had paid in a previous period

Accepted Answer

A) Deferred expense 
B) Deferred revenue 
C) Accrued liability 
D) Accrued asset 
A) Deferred expense 
B) Deferred revenue 
C) Accrued liability 
D) Accrued asset

Question 4

Which one of the following steps in the accounting cycle is optional rather than required?

Accepted Answer

A)  Business transactions are recorded 
B)  Adjustments are recorded 
C)  The accounts are closed 
D)  Work sheets are prepared 
A)  Business transactions are recorded 
B)  Adjustments are recorded 
C)  The accounts are closed 
D)  Work sheets are prepared

Question 5

Measurement in accounting requires choosing an attribute and a unit of measure._________________________ is the attribute used for many of the assets included in the financial statements.

Accepted Answer

The answer of Measurement in accounting requires choosing an attribute...

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 amount of cash that could be received by selling an asset currently is called historical cost.

Accepted Answer

A) True 
 B)False

Question 8

The recognition of revenue may result from the settlement of a liability rather than from the acquisition of an asset.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true concerning the matching principle?

Accepted Answer

A)  All costs can be directly matched with revenue. 
B)  All costs can be indirectly matched with periods in which they provide a benefit. 
C)  The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle. 
D)  Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle. 
A)  All costs can be directly matched with revenue. 
B)  All costs can be indirectly matched with periods in which they provide a benefit. 
C)  The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle. 
D)  Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle.

Question 10

For each transaction select the letter of the type of adjustment that would be required
-Depreciation on a delivery truck is recorded

Accepted Answer

A) Deferred expense 
B) Deferred revenue 
C) Accrued liability 
D) Accrued asset 
A) Deferred expense 
B) Deferred revenue 
C) Accrued liability 
D) Accrued asset

Question 11

The one asset account that never requires adjustment at the end of the period is ____________________.

Accepted Answer

The answer of The one asset account that never requires...

Question 12

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

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 13

The difference between accrual-based revenue and accrual-based expenses is called _________________________.

Accepted Answer

The answer of The difference between accrual-based revenue and accrual-based...

Question 14

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

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 15

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 16

Jenning Co. adjusts its books each month but closes its books at the end of the year. The trial balance at July 31 before adjustments is as follows:
$\begin{array} { l r r } & \text { Debit } & \text { Credit } \ \text { Cash } & \$ 12,920 & \ \text { Accounts Receivable } & 9,620 & \ \text { Supplies } & 1,400 & \ \text { Prepaid Insurance } & 3,120 & \ \text { Equipment } & 26,000 & \  
\text { Accumulated Depreciation-Equipment } && \$ 10,400 \
\text { Unearned Service Revenue } && 6,500 \
\text { Capital Stock } && 7,190 \
\text { Retained Earnings } && 23,500\
\text { Dividends } & 1,560 & \
\text { Service Revenue } & & 16,510 \
\text { Wages and Salaries Expense } & 7,800 & \
\text { Utilities Expense } & 380 & \
\text { Rent Expense } & 1,300 \
&\$ 64.100& \$ 64.100\
\end{array}$
-Refer to the trial balance of Jenning Co.(Round calculations to the nearest dollar.)If the equipment had an estimated useful life of five years and no salvage value, what is its book value at July 31, after the proper monthly July adjustment is recorded?

Accepted Answer

A)  $10,400 
B)  $25,567 
C)  $15,167 
D)  $10,833 
A)  $10,400 
B)  $25,567 
C)  $15,167 
D)  $10,833

Question 17

During December, Horn Inc.purchased $800 of supplies for use in its business.At the end of December, 20% of the supplies were still on hand, but only 75% had been paid.What amounts will appear on the company's balance sheet on December 31? ​ $$\begin{array}{l}
&\text {Supplies on Hand }&\text { Accounts Payable}\
\hline a.&(\$800)&(\$600)\
b.&(\$160)&(\$200)\
c.&(\$640)&(\$200)\
d.&(\$160)&(\$800)\
\end{array}$$

Accepted Answer

The answer of During December, Horn Inc.purchased $800 of supplies...

Question 18

Mitchell Company prepares monthly financial statements and will record.a prepaid account for each of the following except:

Accepted Answer

A)  Mitchell paid for three months of window washing services in advance. 
B)  Mitchell purchases a four-year casualty insurance policy. 
C)  A tenant that pays Mitchell for six months of rent in advance. 
D)  Mitchell purchases office supplies to last for several months. 
A)  Mitchell paid for three months of window washing services in advance. 
B)  Mitchell purchases a four-year casualty insurance policy. 
C)  A tenant that pays Mitchell for six months of rent in advance. 
D)  Mitchell purchases office supplies to last for several months.

Question 19

Expense accounts are debited in the closing process.

Accepted Answer

A) True 
 B)False

Question 20

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

The balance in the account, Rent Collected in Advance, is reported as an asset on the balance sheet of the landlord.

A cost can be an asset or expense depending on whether the future economic benefits have expired or not.

For each transaction select the letter of the type of adjustment that would be required -Revenue is earned during the current period, although customers had paid in a previous period

Which one of the following steps in the accounting cycle is optional rather than required?

Measurement in accounting requires choosing an attribute and a unit of measure._________________________ is the attribute used for many of the assets included in the financial statements.

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

The amount of cash that could be received by selling an asset currently is called historical cost.

The recognition of revenue may result from the settlement of a liability rather than from the acquisition of an asset.

Which of the following statements is true concerning the matching principle?

For each transaction select the letter of the type of adjustment that would be required -Depreciation on a delivery truck is recorded

The one asset account that never requires adjustment at the end of the period is ____________________.

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

The difference between accrual-based revenue and accrual-based expenses is called _________________________.

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

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

Mitchell Company prepares monthly financial statements and will record.a prepaid account for each of the following except:

Expense accounts are debited in the closing process.

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

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

The balance in the account, Rent Collected in Advance, is reported as an asset on the balance sheet of the landlord.

A cost can be an asset or expense depending on whether the future economic benefits have expired or not.

For each transaction select the letter of the type of adjustment that would be required -Revenue is earned during the current period, although customers had paid in a previous period

Which one of the following steps in the accounting cycle is optional rather than required?

Measurement in accounting requires choosing an attribute and a unit of measure._________________________ is the attribute used for many of the assets included in the financial statements.

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

The amount of cash that could be received by selling an asset currently is called historical cost.

The recognition of revenue may result from the settlement of a liability rather than from the acquisition of an asset.

Which of the following statements is true concerning the matching principle?

For each transaction select the letter of the type of adjustment that would be required -Depreciation on a delivery truck is recorded

The one asset account that never requires adjustment at the end of the period is ____________________.

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

The difference between accrual-based revenue and accrual-based expenses is called _________________________.

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

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

Mitchell Company prepares monthly financial statements and will record.a prepaid account for each of the following except:

Expense accounts are debited in the closing process.

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

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