Question 1

Failure to record accrued interest expense would result in which of the following?

Accepted Answer

A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated 
A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated

Question 2

When should a shipping company recognize revenue from its delivery service?

Accepted Answer

A) On the date the customer places a order. 
B) On the date the customer's packages are delivered. 
C) On the date the invoice is mailed to the customer. 
D) On the date the customer's payment is received. 
A) On the date the customer places a order. 
B) On the date the customer's packages are delivered. 
C) On the date the invoice is mailed to the customer. 
D) On the date the customer's payment is received.

Question 3

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Accepted Answer

A) True 
 B)False

Question 4

Some of the steps in the accounting cycle are listed below. Select the choice that places these steps in the correct order.

Accepted Answer

A) 2, 3, 4, 5, 1 
B) 3, 2, 4, 5, 1 
C) 3, 2, 4, 1, 5 
D) 3, 2, 5, 4, 1 
A) 2, 3, 4, 5, 1 
B) 3, 2, 4, 5, 1 
C) 3, 2, 4, 1, 5 
D) 3, 2, 5, 4, 1

Question 5

Carnegie Jewelers accepted a 9-month, 9% note for $100,000 from a customer on July 1, 2013. The note is due on March 31, 2014. Assuming the company's accounting period ends on December 31, 2013, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

Accepted Answer

A) $2,250 $4,500 
B) $4,500 $2,250 
C) $9,000 $ -0- 
D) $4,500 $4,500 
A) $2,250 $4,500 
B) $4,500 $2,250 
C) $9,000 $ -0- 
D) $4,500 $4,500

Question 6

The ____________________ principle attempts to associate the revenue of the period with all costs necessary to generate that revenue.

Accepted Answer

The answer of The ____________________ principle attempts to associate the...

Question 7

Accumulated Depreciation

Accepted Answer

A) increases with a debit. 
B) decreases with a credit. 
C) increases with a credit. 
D) is a adjunct account. 
A) increases with a debit. 
B) decreases with a credit. 
C) increases with a credit. 
D) is a adjunct account.

Question 8

When an expense is incurred prior to the payment of cash for that expense, an adjustment that increases an expense account and increases a liability is prepared.

Accepted Answer

A) True 
 B)False

Question 9

On the worksheet, the retained earnings balance that gets transferred from the retained earnings statement section of the worksheet to the balance sheet section is the beginning retained earnings balance.

Accepted Answer

A) True 
 B)False

Question 10

Adjusting entries are prepared using the accrual basis of accounting for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Why is the cash basis of accounting too limited for proper financial reporting?

Accepted Answer

The limitations of cash basis accounting

Question 12

Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2013. The note is due on April 30, 2014. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

Accepted Answer

A) $2,000 $1,000 
B) $1,000 $2,000 
C) $0 $6,000 
D) $1,000 $5,000 
A) $2,000 $1,000 
B) $1,000 $2,000 
C) $0 $6,000 
D) $1,000 $5,000

Question 13

During December, Camp David, Inc. purchased $5,000 of supplies for use in its business. At the end of December, 20% of the supplies were still on hand, but only 70% had been paid. What amounts will appear on the company's balance sheet on December 31? Supplies on Hand Accounts Payable

Accepted Answer

A) $5,000 $3,500 
B) $1,000 $1,500 
C) $4,000 $1,500 
D) $1,000 $5,000 
A) $5,000 $3,500 
B) $1,000 $1,500 
C) $4,000 $1,500 
D) $1,000 $5,000

Question 14

Accrued revenue is recognized when cash is received.

Accepted Answer

A) True 
 B)False

Question 15

Dividends, like expenses, are closed to the income summary account during the end-of-period closing process.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following places the steps in preparing a worksheet in the correct order: 1 - Adjusted trial balance 4 - Income statement
2 - Adjustments 5 - Retained earnings
3 - Balance sheet 6 - Unadjusted trial balance

Accepted Answer

A) 6 - 2 - 1 - 3 - 4 - 5 
B) 6 - 1 - 2 - 5 - 4 - 3 
C) 6 - 2 - 1 - 4 - 5 - 3 
D) 6 - 2 - 1 - 4 - 3 - 1 
A) 6 - 2 - 1 - 3 - 4 - 5 
B) 6 - 1 - 2 - 5 - 4 - 3 
C) 6 - 2 - 1 - 4 - 5 - 3 
D) 6 - 2 - 1 - 4 - 3 - 1

Question 17

Failure to record dividends paid would result in which of the following?

Accepted Answer

A) Net income being understated. 
B) An increase in total liabilities. 
C) Stockholders' equity being overstated. 
D) Net income being overstated. 
A) Net income being understated. 
B) An increase in total liabilities. 
C) Stockholders' equity being overstated. 
D) Net income being overstated.

Question 18

Match each statement to the item listed below
a.Accrual basis accounting
f.Depreciation
b.Adjusted trial balance
g.Matching principle
c.Adjusting entries
h.Revenue recognition principle
d.Cash basis accounting
i.Time period assumption
e.Contra accounts
j.Worksheet
-Without these, some of the account balances will not be up-to-date at the time financial statements are prepared

Accepted Answer

The answer of Match each statement to the item listed...

Question 19

A company that sells merchandise to customers should normally recognize

Accepted Answer

A) revenue only after the cash is collected. 
B) revenue and the related expenses in the period the revenue earned, whether payment is received or not. 
C) both Revenue and expenses in the period following sale. 
D) expenses in the period the merchandise is sold and revenue in the following period. 
A) revenue only after the cash is collected. 
B) revenue and the related expenses in the period the revenue earned, whether payment is received or not. 
C) both Revenue and expenses in the period following sale. 
D) expenses in the period the merchandise is sold and revenue in the following period.

Question 20

A company borrowed $500,000 on a one-year, 10% note on October 1, 2013, with interest and principal to be paid at maturity. How much interest should be reported on the income statement for the year ending December 31, 2014?

Accepted Answer

A) $50,000 
B) $75,000 
C) $150,000 
D) $37,500 
A) $50,000 
B) $75,000 
C) $150,000 
D) $37,500

Failure to record accrued interest expense would result in which of the following?

When should a shipping company recognize revenue from its delivery service?

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Some of the steps in the accounting cycle are listed below. Select the choice that places these steps in the correct order.

Carnegie Jewelers accepted a 9-month, 9% note for $100,000 from a customer on July 1, 2013. The note is due on March 31, 2014. Assuming the company's accounting period ends on December 31, 2013, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

The ____________________ principle attempts to associate the revenue of the period with all costs necessary to generate that revenue.

Accumulated Depreciation

When an expense is incurred prior to the payment of cash for that expense, an adjustment that increases an expense account and increases a liability is prepared.

On the worksheet, the retained earnings balance that gets transferred from the retained earnings statement section of the worksheet to the balance sheet section is the beginning retained earnings balance.

Adjusting entries are prepared using the accrual basis of accounting for preparing financial statements.

Why is the cash basis of accounting too limited for proper financial reporting?

Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2013. The note is due on April 30, 2014. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

During December, Camp David, Inc. purchased $5,000 of supplies for use in its business. At the end of December, 20% of the supplies were still on hand, but only 70% had been paid. What amounts will appear on the company's balance sheet on December 31? Supplies on Hand Accounts Payable

Accrued revenue is recognized when cash is received.

Dividends, like expenses, are closed to the income summary account during the end-of-period closing process.

Which of the following places the steps in preparing a worksheet in the correct order: 1 - Adjusted trial balance 4 - Income statement 2 - Adjustments 5 - Retained earnings 3 - Balance sheet 6 - Unadjusted trial balance

Failure to record dividends paid would result in which of the following?

A company that sells merchandise to customers should normally recognize

A company borrowed $500,000 on a one-year, 10% note on October 1, 2013, with interest and principal to be paid at maturity. How much interest should be reported on the income statement for the year ending December 31, 2014?

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

Exam 3: Accrual Accounting

Failure to record accrued interest expense would result in which of the following?

When should a shipping company recognize revenue from its delivery service?

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Some of the steps in the accounting cycle are listed below. Select the choice that places these steps in the correct order.

Carnegie Jewelers accepted a 9-month, 9% note for $100,000 from a customer on July 1, 2013. The note is due on March 31, 2014. Assuming the company's accounting period ends on December 31, 2013, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

The ____________________ principle attempts to associate the revenue of the period with all costs necessary to generate that revenue.

Accumulated Depreciation

When an expense is incurred prior to the payment of cash for that expense, an adjustment that increases an expense account and increases a liability is prepared.

On the worksheet, the retained earnings balance that gets transferred from the retained earnings statement section of the worksheet to the balance sheet section is the beginning retained earnings balance.

Adjusting entries are prepared using the accrual basis of accounting for preparing financial statements.

Why is the cash basis of accounting too limited for proper financial reporting?

Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2013. The note is due on April 30, 2014. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

During December, Camp David, Inc. purchased $5,000 of supplies for use in its business. At the end of December, 20% of the supplies were still on hand, but only 70% had been paid. What amounts will appear on the company's balance sheet on December 31? Supplies on Hand Accounts Payable

Accrued revenue is recognized when cash is received.

Dividends, like expenses, are closed to the income summary account during the end-of-period closing process.

Which of the following places the steps in preparing a worksheet in the correct order: 1 - Adjusted trial balance 4 - Income statement 2 - Adjustments 5 - Retained earnings 3 - Balance sheet 6 - Unadjusted trial balance

Failure to record dividends paid would result in which of the following?

A company that sells merchandise to customers should normally recognize

A company borrowed $500,000 on a one-year, 10% note on October 1, 2013, with interest and principal to be paid at maturity. How much interest should be reported on the income statement for the year ending December 31, 2014?

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