Question 1

If a company receives rent for January 2013 from a tenant in December 2012, that rent would be

Accepted Answer

A)  A revenue in 2012 
B)  An asset in 2012 
C)  An expense in 2012 
D)  A liability in 2012 
A)  A revenue in 2012 
B)  An asset in 2012 
C)  An expense in 2012 
D)  A liability in 2012

Question 2

Nominal accounts are temporary subcategories of which account?

Accepted Answer

A)  Sales revenue 
B)  Inventory 
C)  Retained earnings 
D)  Capital stock 
A)  Sales revenue 
B)  Inventory 
C)  Retained earnings 
D)  Capital stock

Question 3

The closing entry involving a net loss will include a

Accepted Answer

A)  Credit to sales revenue 
B)  Debit to retained earnings 
C)  Credit to dividends 
D)  Debit to salaries expense 
A)  Credit to sales revenue 
B)  Debit to retained earnings 
C)  Credit to dividends 
D)  Debit to salaries expense

Question 4

On September 1, 2012, Carter's Construction Company received a $5,400 deposit towards the construction of a new house. The house will not be finished until February 28, 2013. The deposit was originally recorded as Unearned construction revenue. What adjusting entry is required at December 31, 2012?

Accepted Answer

A)  
$\begin{array}{cc}
\text { Unearned Construction Revenue } & 1,800 \
\text { Construction Revenue } & 1,800
\end{array}$ 
B)  
$\begin{array}{lrl}
\text { Construction Revenue } & 3,600 & \
\text { Unearned Construction Revenue } && 3,600
\end{array}$ 
C)  
$\begin{array}{lr}
\text {Cash  }&1,800\
\text {Construction Revenue  }&&1,800\
\end{array}$ 
D) 
$\begin{array}{cc}
\text { Unearned Construction Revenue } & 3,600 \
\text { Construction Revenue } & 3,600
\end{array}$ 
A)  
$\begin{array}{cc}
\text { Unearned Construction Revenue } & 1,800 \
\text { Construction Revenue } & 1,800
\end{array}$ 
B)  
$\begin{array}{lrl}
\text { Construction Revenue } & 3,600 & \
\text { Unearned Construction Revenue } && 3,600
\end{array}$ 
C)  
$\begin{array}{lr}
\text {Cash  }&1,800\
\text {Construction Revenue  }&&1,800\
\end{array}$ 
D) 
$\begin{array}{cc}
\text { Unearned Construction Revenue } & 3,600 \
\text { Construction Revenue } & 3,600
\end{array}$

Question 5

An adjusting entry to record the expired portion of a prepaid expense that was originally debited to a prepaid expense account always includes

Accepted Answer

A)  A debit to an asset 
B)  A credit to cash 
C)  A debit to an expense 
D)  A credit to an expense 
A)  A debit to an asset 
B)  A credit to cash 
C)  A debit to an expense 
D)  A credit to an expense

Question 6

An unearned revenue account is usually considered to be a(n)

Accepted Answer

A)  Liability 
B)  Asset 
C)  Revenue 
D)  Expense 
A)  Liability 
B)  Asset 
C)  Revenue 
D)  Expense

Question 7

Which of the following accounts is NOT a real account?

Accepted Answer

A)  Dividends 
B)  Cash 
C)  Accounts Payable 
D)  Retained Earnings 
A)  Dividends 
B)  Cash 
C)  Accounts Payable 
D)  Retained Earnings

Question 8

Lincoln Company's adjusted trial balance as of August 31, 2012, is shown below:
  
Prepare a balance sheet for the year ended August 31, 2012.

Accepted Answer

Prepare a balance sh

Question 9

Kim Company purchased a two-year insurance policy on October 1, 2012, for $6,000. The policy covers its buildings for the next two years. If Kim debited Prepaid Insurance to record the purchase of the policy, the adjusting entry on December 31, 2012 (year-end) would include a credit to

Accepted Answer

A)  Insurance Expense of $750 
B)  Insurance Expense of $3,000 
C)  Prepaid Insurance of $750 
D)  Prepaid Insurance of $3,000 
A)  Insurance Expense of $750 
B)  Insurance Expense of $3,000 
C)  Prepaid Insurance of $750 
D)  Prepaid Insurance of $3,000

Question 10

On June 30, 2012, Sinise Co. purchased a three-year fire insurance policy at a cost of $27,000 and debited Prepaid Insurance for the entire amount. The policy covers the period July 1, 2012, to June 30, 2015. The adjusting entry needed on December 31, 2012, includes a credit to

Accepted Answer

A)  Insurance Expense for $9,000 
B)  Insurance Expense for $4,500 
C)  Prepaid Insurance for $4,500 
D)  Prepaid Insurance for $9,000 
A)  Insurance Expense for $9,000 
B)  Insurance Expense for $4,500 
C)  Prepaid Insurance for $4,500 
D)  Prepaid Insurance for $9,000

Question 11

The 2013 accrual-basis income statement for Razorri Corporation reports sales revenue of $81,000. The related balance sheet accounts for the beginning and end of the year were   Based on this information, the amount of cash collected during 2013 from Razorri's customers was

Accepted Answer

A)  $81,000 
B)  $119,250 
C)  $114,750 
D)  $99,000 
A)  $81,000 
B)  $119,250 
C)  $114,750 
D)  $99,000

Question 12

A twelve-month accounting period ending on December 31 is known as a

Accepted Answer

A)  Calendar year 
B)  Reporting period 
C)  Fiscal year 
D)  All of these are correct 
A)  Calendar year 
B)  Reporting period 
C)  Fiscal year 
D)  All of these are correct

Question 13

What is the effect on account balances when an adjusting entry to record an unrecorded receivable is made?

Accepted Answer

A)  Both revenues and assets will be increased. 
B)  Both revenues and assets will be decreased. 
C)  Revenues will be increased, but assets will be decreased. 
D)  Assets will be increased, but revenues will be decreased. 
A)  Both revenues and assets will be increased. 
B)  Both revenues and assets will be decreased. 
C)  Revenues will be increased, but assets will be decreased. 
D)  Assets will be increased, but revenues will be decreased.

Question 14

Amounts received before they are earned are called

Accepted Answer

A)  Unrecorded receivables 
B)  Unrecorded liabilities 
C)  Prepaid expenses 
D)  Unearned revenues 
A)  Unrecorded receivables 
B)  Unrecorded liabilities 
C)  Prepaid expenses 
D)  Unearned revenues

Question 15

A system of accounting in which revenues and expenses are recorded only when cash is received or paid, is called

Accepted Answer

A)  Revenue recognition accounting 
B)  Accrual-basis accounting 
C)  Realization accounting 
D)  Cash-basis accounting 
A)  Revenue recognition accounting 
B)  Accrual-basis accounting 
C)  Realization accounting 
D)  Cash-basis accounting

Question 16

The failure to adjust a prepaid expense that has partially expired and was originally recorded by debiting a prepaid expense for the entire amount will usually result in an

Accepted Answer

A)  Understatement of assets and an understatement of expenses 
B)  Overstatement of assets and an overstatement of expenses 
C)  Understatement of assets and an overstatement of expenses 
D)  Overstatement of assets and an understatement of expenses 
A)  Understatement of assets and an understatement of expenses 
B)  Overstatement of assets and an overstatement of expenses 
C)  Understatement of assets and an overstatement of expenses 
D)  Overstatement of assets and an understatement of expenses

Question 17

A system of accounting in which revenues and expenses are recorded as they are earned and incurred, is called

Accepted Answer

A)  Revenue recognition accounting 
B)  Accrual-basis accounting 
C)  Realization accounting 
D)  Cash-basis accounting 
A)  Revenue recognition accounting 
B)  Accrual-basis accounting 
C)  Realization accounting 
D)  Cash-basis accounting

Question 18

Revenue items that are earned but have NOT been collected or recognized are called

Accepted Answer

A)  Unearned receivables 
B)  Deferred revenues 
C)  Unrecorded receivables 
D)  Prepaid revenues 
A)  Unearned receivables 
B)  Deferred revenues 
C)  Unrecorded receivables 
D)  Prepaid revenues

Question 19

A post-closing trial balance does NOT include the

Accepted Answer

A)  Real accounts 
B)  Balance sheet accounts 
C)  Permanent accounts 
D)  Income statement accounts 
A)  Real accounts 
B)  Balance sheet accounts 
C)  Permanent accounts 
D)  Income statement accounts

Question 20

The following are a selection of account balances taken from the Adjusted Trial Balance of Cajon Corporation for December 31, 2012:
 
- Refer to Exhibit 4-1. Given the information above, what is the amount of total liabilities and owner's equity on Cajon Corporation's balance sheet in 2012?

Accepted Answer

A)  $100 
B)  $300 
C)  $250 
D)  $450 
A)  $100 
B)  $300 
C)  $250 
D)  $450

Exam 4: Completing the Accounting Cycle

If a company receives rent for January 2013 from a tenant in December 2012, that rent would be

Nominal accounts are temporary subcategories of which account?

The closing entry involving a net loss will include a

On September 1, 2012, Carter's Construction Company received a $5,400 deposit towards the construction of a new house. The house will not be finished until February 28, 2013. The deposit was originally recorded as Unearned construction revenue. What adjusting entry is required at December 31, 2012?

An adjusting entry to record the expired portion of a prepaid expense that was originally debited to a prepaid expense account always includes

An unearned revenue account is usually considered to be a(n)

Which of the following accounts is NOT a real account?

Lincoln Company's adjusted trial balance as of August 31, 2012, is shown below: Prepare a balance sheet for the year ended August 31, 2012.

Kim Company purchased a two-year insurance policy on October 1, 2012, for $6,000. The policy covers its buildings for the next two years. If Kim debited Prepaid Insurance to record the purchase of the policy, the adjusting entry on December 31, 2012 (year-end) would include a credit to

On June 30, 2012, Sinise Co. purchased a three-year fire insurance policy at a cost of $27,000 and debited Prepaid Insurance for the entire amount. The policy covers the period July 1, 2012, to June 30, 2015. The adjusting entry needed on December 31, 2012, includes a credit to

The 2013 accrual-basis income statement for Razorri Corporation reports sales revenue of $81,000. The related balance sheet accounts for the beginning and end of the year were Based on this information, the amount of cash collected during 2013 from Razorri's customers was

A twelve-month accounting period ending on December 31 is known as a

What is the effect on account balances when an adjusting entry to record an unrecorded receivable is made?

Amounts received before they are earned are called

A system of accounting in which revenues and expenses are recorded only when cash is received or paid, is called

The failure to adjust a prepaid expense that has partially expired and was originally recorded by debiting a prepaid expense for the entire amount will usually result in an

A system of accounting in which revenues and expenses are recorded as they are earned and incurred, is called

Revenue items that are earned but have NOT been collected or recognized are called

A post-closing trial balance does NOT include the

The following are a selection of account balances taken from the Adjusted Trial Balance of Cajon Corporation for December 31, 2012: - Refer to Exhibit 4-1. Given the information above, what is the amount of total liabilities and owner's equity on Cajon Corporation's balance sheet in 2012?

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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