Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Most companies use the accrual basis of accounting because it is required under generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 3

The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $2,000. What adjusting entry is necessary at January 31?

Accepted Answer

A) Supplies Expense 22,000 Supplies 20,000
Accounts Payable 2,000 
B) Supplies Expense 24,000 Supplies 24,000 
C) Supplies Expense 30,000 Supplies 30,000 
D) Supplies 22,000 Accounts Payable 22,000 
A) Supplies Expense 22,000 Supplies 20,000
Accounts Payable 2,000 
B) Supplies Expense 24,000 Supplies 24,000 
C) Supplies Expense 30,000 Supplies 30,000 
D) Supplies 22,000 Accounts Payable 22,000

Question 4

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 5

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.)
a.temporary account
b.permanent account
-Cash

Accepted Answer

The answer of From the list of accounts, determine whether...

Question 6

Select the correct revenue recognition principle for each of the following. (Choices may be used more than once.)
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.
-Rent

Accepted Answer

The answer of Select the correct revenue recognition principle for...

Question 7

A company borrowed $100,000 on a one-year, 10% note on September 1, 2013, with interest and principal to be paid at maturity. How much interest payable will be reported on the balance sheet at November 30, 2013?

Accepted Answer

A) $ 2,500 
B) $ 7,500 
C) $10,000 
D) $ 3,333 
A) $ 2,500 
B) $ 7,500 
C) $10,000 
D) $ 3,333

Question 8

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.)
a.temporary account
b.permanent account
-Supplies Expense

Accepted Answer

The answer of From the list of accounts, determine whether...

Question 9

Why does the accrual basis of accounting require adjustments, while the cash basis does not?

Accepted Answer

Adjustments are necessary under the accr

Question 10

When is revenue from the sale of merchandise normally recognized?

Accepted Answer

A) On the date the sale is made. 
B) On the date the customer pays for the merchandise. 
C) Either on the date on which the sale occurs, or the date on which the customer pays. 
D) When the merchandise is sold, if sold for cash, or when payment is received, if sold on credit. 
A) On the date the sale is made. 
B) On the date the customer pays for the merchandise. 
C) Either on the date on which the sale occurs, or the date on which the customer pays. 
D) When the merchandise is sold, if sold for cash, or when payment is received, if sold on credit.

Question 11

Under accrual accounting when is revenue recognized?

Accepted Answer

A) When cash is received, and expenses when cash is paid 
B) When cash is received, and expenses when the costs are incurred. 
C) When earned, and expenses when incurred. 
D) When earned, and expenses when cash is paid. 
A) When cash is received, and expenses when cash is paid 
B) When cash is received, and expenses when the costs are incurred. 
C) When earned, and expenses when incurred. 
D) When earned, and expenses when cash is paid.

Question 12

Measurement of the economic effects on an entity involves each of the following except

Accepted Answer

A) quantification of effects. 
B) identification of the attribute to be measured. 
C) selection of an appropriate unit of measure. 
D) recording the economic effects in the financial statements. 
A) quantification of effects. 
B) identification of the attribute to be measured. 
C) selection of an appropriate unit of measure. 
D) recording the economic effects in the financial statements.

Question 13

Match the most probable matching method to the costs listed. (Choices may be used more than once.)
a.Directly match a specific revenue
b.Indirectly match with the period during which it will provide revenue
c.Not recognized in this period
-Storage facility used for storing inventory goods

Accepted Answer

The answer of Match the most probable matching method to...

Question 14

Failure to record the supplies used during the year would result in which of the following?

Accepted Answer

A) Net income being understated. 
B) An overstatement of liabilities. 
C) Assets and Stockholders' equity being overstated. 
D) Total assets being understated. 
A) Net income being understated. 
B) An overstatement of liabilities. 
C) Assets and Stockholders' equity being overstated. 
D) Total assets being understated.

Question 15

-Refer to Cabana Club. Identify three specific accounts in which the company might need to accrue additional expenses as a result of adjustments. Indicate the effects of these adjustments on the fundamental accounting equation. Ignore amounts.

Accepted Answer

The accounts are: Payroll and other empl

Question 16

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

Accepted Answer

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

Question 17

Match the following types of adjusting entries to the listed situation. (Choices may be used more than once.)
a.a deferred (prepaid)expense
b.a deferred (unearned)revenue
c.an accrued expense
d.an accrued revenue
-An office building was acquired for cash

Accepted Answer

The answer of Match the following types of adjusting entries...

Question 18

Describe why the accrual basis of accounting is preferred for financial reporting over the cash basis.

Accepted Answer

Cash basis accounting is not conducive t

Question 19

Which one of the following is not a proper method of recognizing assets as expenses in a particular accounting period?

Accepted Answer

A) Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays. 
B) Prepaid insurance is assigned to expense as the insurance expires. 
C) A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used. 
D) Merchandise inventory is assigned to cost of goods sold in the period the goods are sold. 
A) Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays. 
B) Prepaid insurance is assigned to expense as the insurance expires. 
C) A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used. 
D) Merchandise inventory is assigned to cost of goods sold in the period the goods are sold.

Question 20

Cozy Corporation purchased supplies at a cost of $15,000 during 2013. At January 1, 2013, supplies on hand were $5,000. At December 31, 2013, supplies on hand are $2,000. Calculate supplies expense for 2013.

Accepted Answer

A) $18,000 
B) $15,000 
C) $13,000 
D) $2,000 
A) $18,000 
B) $15,000 
C) $13,000 
D) $2,000

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

Most companies use the accrual basis of accounting because it is required under generally accepted accounting principles.

The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $2,000. What adjusting entry is necessary at January 31?

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

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.) a.temporary account b.permanent account -Cash

A company borrowed $100,000 on a one-year, 10% note on September 1, 2013, with interest and principal to be paid at maturity. How much interest payable will be reported on the balance sheet at November 30, 2013?

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.) a.temporary account b.permanent account -Supplies Expense

Why does the accrual basis of accounting require adjustments, while the cash basis does not?

When is revenue from the sale of merchandise normally recognized?

Under accrual accounting when is revenue recognized?

Measurement of the economic effects on an entity involves each of the following except

Match the most probable matching method to the costs listed. (Choices may be used more than once.) a.Directly match a specific revenue b.Indirectly match with the period during which it will provide revenue c.Not recognized in this period -Storage facility used for storing inventory goods

Failure to record the supplies used during the year would result in which of the following?

-Refer to Cabana Club. Identify three specific accounts in which the company might need to accrue additional expenses as a result of adjustments. Indicate the effects of these adjustments on the fundamental accounting equation. Ignore amounts.

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

Match the following types of adjusting entries to the listed situation. (Choices may be used more than once.) a.a deferred (prepaid)expense b.a deferred (unearned)revenue c.an accrued expense d.an accrued revenue -An office building was acquired for cash

Describe why the accrual basis of accounting is preferred for financial reporting over the cash basis.

Which one of the following is not a proper method of recognizing assets as expenses in a particular accounting period?

Cozy Corporation purchased supplies at a cost of $15,000 during 2013. At January 1, 2013, supplies on hand were $5,000. At December 31, 2013, supplies on hand are $2,000. Calculate supplies expense for 2013.

Accounting and the Financial Statements

The Accounting Information System

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

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Exam 3: Accrual Accounting

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

Most companies use the accrual basis of accounting because it is required under generally accepted accounting principles.

The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $2,000. What adjusting entry is necessary at January 31?

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

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.) a.temporary account b.permanent account -Cash

A company borrowed $100,000 on a one-year, 10% note on September 1, 2013, with interest and principal to be paid at maturity. How much interest payable will be reported on the balance sheet at November 30, 2013?

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.) a.temporary account b.permanent account -Supplies Expense

Why does the accrual basis of accounting require adjustments, while the cash basis does not?

When is revenue from the sale of merchandise normally recognized?

Under accrual accounting when is revenue recognized?

Measurement of the economic effects on an entity involves each of the following except

Match the most probable matching method to the costs listed. (Choices may be used more than once.) a.Directly match a specific revenue b.Indirectly match with the period during which it will provide revenue c.Not recognized in this period -Storage facility used for storing inventory goods

Failure to record the supplies used during the year would result in which of the following?

-Refer to Cabana Club. Identify three specific accounts in which the company might need to accrue additional expenses as a result of adjustments. Indicate the effects of these adjustments on the fundamental accounting equation. Ignore amounts.

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

Match the following types of adjusting entries to the listed situation. (Choices may be used more than once.) a.a deferred (prepaid)expense b.a deferred (unearned)revenue c.an accrued expense d.an accrued revenue -An office building was acquired for cash

Describe why the accrual basis of accounting is preferred for financial reporting over the cash basis.

Which one of the following is not a proper method of recognizing assets as expenses in a particular accounting period?

Cozy Corporation purchased supplies at a cost of $15,000 during 2013. At January 1, 2013, supplies on hand were $5,000. At December 31, 2013, supplies on hand are $2,000. Calculate supplies expense for 2013.

Accounting and the Financial Statements

The Accounting Information System

Internal Control and Cash

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters