Question 1

Which one of the following adjustments decreases net income for the period?

Accepted Answer

A) Recognition of depreciation on plant assets 
B) Recognition of interest earned on a note receivable 
C) Recognition of services that had been provided to customers but the cash has not yet been received 
D) Recognition of rent earned that had been received in advance from customers 
A) Recognition of depreciation on plant assets 
B) Recognition of interest earned on a note receivable 
C) Recognition of services that had been provided to customers but the cash has not yet been received 
D) Recognition of rent earned that had been received in advance from customers

Question 2

-Refer to California Condos. The company reported interest receivable of $2,500 at December 31, 2013, and $0 at the beginning of 2013. How much cash did the company collect for interest during the year?

Accepted Answer

$7,500
$10,000 (Inte

Question 3

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.
-Consulting Services

Accepted Answer

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

Question 4

Accrued expenses originate from

Accepted Answer

A) paying off liabilities. 
B) paying for items such as insurance in advance. 
C) collecting cash from customers. 
D) incurring expenses without yet having paid cash for them. 
A) paying off liabilities. 
B) paying for items such as insurance in advance. 
C) collecting cash from customers. 
D) incurring expenses without yet having paid cash for them.

Question 5

Under the ____________________ basis of accounting, revenues are recognized when earned and expenses when incurred.

Accepted Answer

The answer of Under the ____________________ basis of accounting, revenues...

Question 6

A photo processing store purchased office supplies on January 15 by paying cash of $5,000. On January 1, the Supplies account had a beginning balance of $500. On December 31, an inventory revealed that supplies on hand amounted to $500.

Accepted Answer

The answer of A photo processing store purchased office supplies...

Question 7

Since dividends do not impact income, the dividends account is not closed to the income summary account.

Accepted Answer

A) True 
 B)False

Question 8

Cambridge Cleaners started business on January 1, 2013, and immediately purchased $5,000 of supplies to use in the business. At the end of the month, 30 percent of the supplies remains unpaid and 20% are still on hand. What amounts should appear as an expense on the financial statements for January, 2013? Income Statement Statement of Cash Flows

Accepted Answer

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

Question 9

Accumulated depreciation is a contra asset account.

Accepted Answer

A) True 
 B)False

Question 10

Matching requires expenses be recorded and reported in the same period as the revenue that it helped to generate.

Accepted Answer

A) True 
 B)False

Question 11

For each transaction select the type of adjustment that would be required. (Choices may be used more than once.)
a.Deferred (prepaid)expense
b.Deferred (unearned)revenue
c.Accrued expense
d.Accrued revenue
-Rent had been incurred, but not yet paid

Accepted Answer

The answer of For each transaction select the type of...

Question 12

-Refer to Cabana Club. The company reported $210,000,000 and $120,000,000 of accrued interest payable in the liability section of its balance sheet at December 31, 2014 and 2013, respectively. How much cash did it pay during 2014 for interest?

Accepted Answer

$303,800,000
$393,800,000 (Int

Question 13

-Refer to California Condos. On January 1, there was a $0 balance in the salaries payable account. How much cash did the company pay for salaries during the year?

Accepted Answer

$41,000
$45,000 (Sal

Question 14

Which one of the following adjustments will increase assets?

Accepted Answer

A) Interest incurred on money borrowed during the period but not yet paid to the bank is accrued. 
B) Rent revenue is recorded for amounts owed by a tenant but not yet paid. 
C) The use of supplies is recorded. 
D) Depreciation for the period is recorded. 
A) Interest incurred on money borrowed during the period but not yet paid to the bank is accrued. 
B) Rent revenue is recorded for amounts owed by a tenant but not yet paid. 
C) The use of supplies is recorded. 
D) Depreciation for the period is recorded.

Question 15

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
-Rent paid in advance

Accepted Answer

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

Question 16

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
-Interest is earned but not yet collected

Accepted Answer

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

Question 17

A local medical clinic operates five days per week with a daily payroll of $100,000. Employees are paid every Tuesday for the prior week's work (Monday through Friday). The last day of the month is Tuesday, April 30. What effect does the accrual at April 30 have on the clinic's net income?

Accepted Answer

A) Increase by $200,000 
B) Decrease by $300,000 
C) Decrease by $200,000 
D) Increase by $300,000 
A) Increase by $200,000 
B) Decrease by $300,000 
C) Decrease by $200,000 
D) Increase by $300,000

Question 18

An insurance company received advance payments from clients during 2013 of $12,000. At December 31, 2013, $10,000 of the advance payments still had not been earned. After the adjustments are recorded and posted at December 31, 2013, what will the balances be in the Unearned Insurance Revenue and Insurance Revenue accounts? Unearned Insurance Revenue Insurance Revenue

Accepted Answer

A) $10,000 $10,000 
B) $0 $12,000 
C) $2,000 $10,000 
D) $10,000 $2,000 
A) $10,000 $10,000 
B) $0 $12,000 
C) $2,000 $10,000 
D) $10,000 $2,000

Question 19

The worksheet facilitates preparation of all of the following financial statements except:

Accepted Answer

A) Cash Flow Statement 
B) Balance Sheet 
C) Retained Earnings Statement 
D) Income Statement 
A) Cash Flow Statement 
B) Balance Sheet 
C) Retained Earnings Statement 
D) Income Statement

Question 20

What is the effect on the accounting equation when a company recognizes rent as earned that had previously been received in advance from customers?

Accepted Answer

A) Assets increase 
B) Revenues decrease 
C) Liabilities increase 
D) Net income increases 
A) Assets increase 
B) Revenues decrease 
C) Liabilities increase 
D) Net income increases

Which one of the following adjustments decreases net income for the period?

-Refer to California Condos. The company reported interest receivable of $2,500 at December 31, 2013, and $0 at the beginning of 2013. How much cash did the company collect for interest during the year?

Accrued expenses originate from

Under the ____________________ basis of accounting, revenues are recognized when earned and expenses when incurred.

A photo processing store purchased office supplies on January 15 by paying cash of $5,000. On January 1, the Supplies account had a beginning balance of $500. On December 31, an inventory revealed that supplies on hand amounted to $500.

Since dividends do not impact income, the dividends account is not closed to the income summary account.

Accumulated depreciation is a contra asset account.

Matching requires expenses be recorded and reported in the same period as the revenue that it helped to generate.

For each transaction select the type of adjustment that would be required. (Choices may be used more than once.) a.Deferred (prepaid)expense b.Deferred (unearned)revenue c.Accrued expense d.Accrued revenue -Rent had been incurred, but not yet paid

-Refer to Cabana Club. The company reported $210,000,000 and $120,000,000 of accrued interest payable in the liability section of its balance sheet at December 31, 2014 and 2013, respectively. How much cash did it pay during 2014 for interest?

-Refer to California Condos. On January 1, there was a $0 balance in the salaries payable account. How much cash did the company pay for salaries during the year?

Which one of the following adjustments will increase assets?

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 -Rent paid in advance

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 -Interest is earned but not yet collected

A local medical clinic operates five days per week with a daily payroll of $100,000. Employees are paid every Tuesday for the prior week's work (Monday through Friday). The last day of the month is Tuesday, April 30. What effect does the accrual at April 30 have on the clinic's net income?

The worksheet facilitates preparation of all of the following financial statements except:

What is the effect on the accounting equation when a company recognizes rent as earned that had previously been received in advance from customers?

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

Which one of the following adjustments decreases net income for the period?

-Refer to California Condos. The company reported interest receivable of $2,500 at December 31, 2013, and $0 at the beginning of 2013. How much cash did the company collect for interest during the year?

Accrued expenses originate from

Under the ____________________ basis of accounting, revenues are recognized when earned and expenses when incurred.

A photo processing store purchased office supplies on January 15 by paying cash of $5,000. On January 1, the Supplies account had a beginning balance of $500. On December 31, an inventory revealed that supplies on hand amounted to $500.

Since dividends do not impact income, the dividends account is not closed to the income summary account.

Accumulated depreciation is a contra asset account.

Matching requires expenses be recorded and reported in the same period as the revenue that it helped to generate.

For each transaction select the type of adjustment that would be required. (Choices may be used more than once.) a.Deferred (prepaid)expense b.Deferred (unearned)revenue c.Accrued expense d.Accrued revenue -Rent had been incurred, but not yet paid

-Refer to Cabana Club. The company reported $210,000,000 and $120,000,000 of accrued interest payable in the liability section of its balance sheet at December 31, 2014 and 2013, respectively. How much cash did it pay during 2014 for interest?

-Refer to California Condos. On January 1, there was a $0 balance in the salaries payable account. How much cash did the company pay for salaries during the year?

Which one of the following adjustments will increase assets?

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 -Rent paid in advance

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 -Interest is earned but not yet collected

A local medical clinic operates five days per week with a daily payroll of $100,000. Employees are paid every Tuesday for the prior week's work (Monday through Friday). The last day of the month is Tuesday, April 30. What effect does the accrual at April 30 have on the clinic's net income?

The worksheet facilitates preparation of all of the following financial statements except:

What is the effect on the accounting equation when a company recognizes rent as earned that had previously been received in advance from customers?

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