Question 1

When cash is paid to suppliers on account,which section of the Statement of Cash Flows is affected?

Accepted Answer

A) Cash Flow from Operating Activities. 
B) Cash Flow from Investing Activities. 
C) Cash Flow from Financing Activities 
D) There is no effect on the Statement of Cash Flows. 
A) Cash Flow from Operating Activities. 
B) Cash Flow from Investing Activities. 
C) Cash Flow from Financing Activities 
D) There is no effect on the Statement of Cash Flows.

Question 2

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

Accepted Answer

A) True 
 B)False

Question 3

From the following data for David ProElecticals,calculate the quick ratio.

Accepted Answer

A) 1.6 
B) 0.7 
C) 0.3 
D) 1.5 
A) 1.6 
B) 0.7 
C) 0.3 
D) 1.5

Question 4

Fees receivable would appear on the balance sheet as a(n):

Accepted Answer

A) asset. 
B) liability. 
C) fixed asset. 
D) unearned revenue. 
A) asset. 
B) liability. 
C) fixed asset. 
D) unearned revenue.

Question 5

The following assets are included in Fortible Auto Parts,Inc.'s December 31,2015,balance sheet.

Accepted Answer

A) $250,000. 
B) $310,000. 
C) $278,000. 
D) $375,000. 
A) $250,000. 
B) $310,000. 
C) $278,000. 
D) $375,000.

Question 6

When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?

Accepted Answer

A) Cash Flow from Operating Activities 
B) Cash Flow from Investing Activities 
C) Cash Flow from Financing Activities 
D) There is no effect on the statement of cash flows. 
A) Cash Flow from Operating Activities 
B) Cash Flow from Investing Activities 
C) Cash Flow from Financing Activities 
D) There is no effect on the statement of cash flows.

Question 7

Refer to Perill Co.If the month ends on Wednesday,and wages will not be paid until Friday,how much wage expense should be accrued on Wednesday?

Accepted Answer

A) $650 
B) $1,950 
C) $3,250 
D) $1,300 
A) $650 
B) $1,950 
C) $3,250 
D) $1,300

Question 8

Which of the following is an example of a deferred expense?

Accepted Answer

A) Prepaid advertising 
B) Unearned revenue 
C) Accounts payable 
D) Accounts receivable 
A) Prepaid advertising 
B) Unearned revenue 
C) Accounts payable 
D) Accounts receivable

Question 9

On April 1,Tenity,Inc.paid $3,300 for an insurance premium on a three-year insurance policy.At the end of December,Tenity's fiscal year-end,what should be the balance in the prepaid insurance account?

Accepted Answer

A) $1,100 
B) $2,475 
C) $3,300 
D) $2,200 
A) $1,100 
B) $2,475 
C) $3,300 
D) $2,200

Question 10

Electroyo Corporation's accumulated depreciation increased by $8,500,while patents decreased by $2,800 between consecutive balance sheet dates.There were no purchases or sales of depreciable or intangible assets during the year.In addition,the income statement showed a gain of $5,350 from sale of land.Reconcile a net income of $68,000 to net cash flow from operating activities.

Accepted Answer

Net income $68,000 Adjustments to reconc

Question 11

The quick ratio is computed as .

Accepted Answer

A) quick assets divided by current liabilities 
B) quick assets divided by current assets 
C) current assets divided by stockholders' equity 
D) current liabilities divided by current assets 
A) quick assets divided by current liabilities 
B) quick assets divided by current assets 
C) current assets divided by stockholders' equity 
D) current liabilities divided by current assets

Question 12

The accrual basis of accounting recognizes:

Accepted Answer

A) revenues when cash is received and expenses when cash is paid. 
B) revenues when earned and expenses when cash is paid. 
C) revenues when cash is received and expenses when incurred. 
D) revenues when earned and expenses when incurred. 
A) revenues when cash is received and expenses when cash is paid. 
B) revenues when earned and expenses when cash is paid. 
C) revenues when cash is received and expenses when incurred. 
D) revenues when earned and expenses when incurred.

Question 13

The process that begins with the analysis of transactions and ends with preparing the accounting records for the next accounting period is called the accounting cycle.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of an accrued expense?

Accepted Answer

A) Salary owed but not yet paid 
B) Fees received but not yet earned 
C) Supplies on hand 
D) A two-year premium paid on a fire insurance policy 
A) Salary owed but not yet paid 
B) Fees received but not yet earned 
C) Supplies on hand 
D) A two-year premium paid on a fire insurance policy

Question 15

Expenses on the income statement are assets used up or services consumed in the process of generating revenues.

Accepted Answer

A) True 
 B)False

Question 16

Refer to Coke's balance sheet.Does it appear that Coke uses the cash or accrual basis of accounting?

Accepted Answer

Coke uses accrual basis of acc

Question 17

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

Accepted Answer

A) True 
 B)False

Question 18

The matching concept requires expenses to be recorded in the same period that the related revenue is recorded.

Accepted Answer

A) True 
 B)False

Question 19

Under the cash basis of accounting,a business records only transactions involving increases or decreases of its cash.

Accepted Answer

A) True 
 B)False

Question 20

A&M Co.provided services of $1,000,000 to clients on account.How does this transaction affect A&M's accounts?

Accepted Answer

A) Increase accounts receivable and cash by $1,000,000 each 
B) Increase accounts receivable and revenues by $1,000,000 each 
C) Increase accounts receivable and unearned revenues by $1,000,000 each 
D) Increase cash and decrease accounts receivable by $1,000,000 each 
A) Increase accounts receivable and cash by $1,000,000 each 
B) Increase accounts receivable and revenues by $1,000,000 each 
C) Increase accounts receivable and unearned revenues by $1,000,000 each 
D) Increase cash and decrease accounts receivable by $1,000,000 each

When cash is paid to suppliers on account,which section of the Statement of Cash Flows is affected?

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

From the following data for David ProElecticals,calculate the quick ratio.

Fees receivable would appear on the balance sheet as a(n):

The following assets are included in Fortible Auto Parts,Inc.'s December 31,2015,balance sheet.

When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?

Refer to Perill Co.If the month ends on Wednesday,and wages will not be paid until Friday,how much wage expense should be accrued on Wednesday?

Which of the following is an example of a deferred expense?

On April 1,Tenity,Inc.paid $3,300 for an insurance premium on a three-year insurance policy.At the end of December,Tenity's fiscal year-end,what should be the balance in the prepaid insurance account?

The quick ratio is computed as .

The accrual basis of accounting recognizes:

The process that begins with the analysis of transactions and ends with preparing the accounting records for the next accounting period is called the accounting cycle.

Which of the following is an example of an accrued expense?

Expenses on the income statement are assets used up or services consumed in the process of generating revenues.

Refer to Coke's balance sheet.Does it appear that Coke uses the cash or accrual basis of accounting?

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

The matching concept requires expenses to be recorded in the same period that the related revenue is recorded.

Under the cash basis of accounting,a business records only transactions involving increases or decreases of its cash.

A&M Co.provided services of $1,000,000 to clients on account.How does this transaction affect A&M's accounts?

The Role of Accounting in Business

Basic Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 3: Accrual Accounting Concepts

When cash is paid to suppliers on account,which section of the Statement of Cash Flows is affected?

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

From the following data for David ProElecticals,calculate the quick ratio.

Fees receivable would appear on the balance sheet as a(n):

The following assets are included in Fortible Auto Parts,Inc.'s December 31,2015,balance sheet.

When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?

Refer to Perill Co.If the month ends on Wednesday,and wages will not be paid until Friday,how much wage expense should be accrued on Wednesday?

Which of the following is an example of a deferred expense?

On April 1,Tenity,Inc.paid $3,300 for an insurance premium on a three-year insurance policy.At the end of December,Tenity's fiscal year-end,what should be the balance in the prepaid insurance account?

The quick ratio is computed as .

The accrual basis of accounting recognizes:

The process that begins with the analysis of transactions and ends with preparing the accounting records for the next accounting period is called the accounting cycle.

Which of the following is an example of an accrued expense?

Expenses on the income statement are assets used up or services consumed in the process of generating revenues.

Refer to Coke's balance sheet.Does it appear that Coke uses the cash or accrual basis of accounting?

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

The matching concept requires expenses to be recorded in the same period that the related revenue is recorded.

Under the cash basis of accounting,a business records only transactions involving increases or decreases of its cash.

A&M Co.provided services of $1,000,000 to clients on account.How does this transaction affect A&M's accounts?

The Role of Accounting in Business

Basic Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters