Question 1

Use this information pertaining to the Essex Corporation to answer the following question.   The adjusting entry for depreciation on the building is

Accepted Answer

A)  Depreciation Expense - Building 10,000
Accumulated Depreciation - Building 10,000 
B)  Accumulated Depreciation - Building 10,000
Depreciation Expense - Building 10,000 
C)  Building 10,000
Depreciation Expense - Building 10,000 
D)  Accumulated Depreciation - Building 10,000
Building 10,000 
A)  Depreciation Expense - Building 10,000
Accumulated Depreciation - Building 10,000 
B)  Accumulated Depreciation - Building 10,000
Depreciation Expense - Building 10,000 
C)  Building 10,000
Depreciation Expense - Building 10,000 
D)  Accumulated Depreciation - Building 10,000
Building 10,000

Question 2

The principal difference between depreciation expense and most other types of expenses is that depreciation

Accepted Answer

A)  can be avoided if the asset is in as good of condition as when it was purchased. 
B)  does not require an immediate cash outlay. 
C)  is not deductible if it will cause a net loss. 
D)  is subject to more precise measurement. 
A)  can be avoided if the asset is in as good of condition as when it was purchased. 
B)  does not require an immediate cash outlay. 
C)  is not deductible if it will cause a net loss. 
D)  is subject to more precise measurement.

Question 3

Use this information to answer the following question. The Retained Earnings,Dividends,and Income Summary accounts for Dukes Corporation for the accounting period are presented below in T account form after the recording and posting of closing entries:
    The amount of net income (or net loss)for the period is

Accepted Answer

A)  $1,800 net income. 
B)  $1,200 net income. 
C)  $600 net loss. 
D)  $600 net income. 
A)  $1,800 net income. 
B)  $1,200 net income. 
C)  $600 net loss. 
D)  $600 net income.

Question 4

How and why is the matching rule applied to the cost of a building?

Accepted Answer

The matching rule requires that the cost

Question 5

Expenses are often called the cost of doing business or expired costs.

Accepted Answer

A) True 
 B)False

Question 6

In November,cash is received in advance of rendering services.Assuming that the services have been performed by December 31,the adjusting entry would be

Accepted Answer

A)  Unearned Service Revenue - Debit; Cash - Credit 
B)  Cash - Debit; Service Revenue - Credit 
C)  Unearned Service Revenue - Debit; Service Revenue - Credit 
D)  Service Revenue - Debit; Prepaid Services - Credit 
A)  Unearned Service Revenue - Debit; Cash - Credit 
B)  Cash - Debit; Service Revenue - Credit 
C)  Unearned Service Revenue - Debit; Service Revenue - Credit 
D)  Service Revenue - Debit; Prepaid Services - Credit

Question 7

Given the adjusted trial balance below,prepare (in good form)an income statement,statement of retained earnings,and balance sheet.The name of the business is Hampden Cleaning Service and the accounting period coincides with the calendar year.

Accepted Answer

The answer of Given the adjusted trial balance below,prepare (in...

Question 8

Answer the following questions.(Show your work.)
a.A machine was purchased on July 1,2012.It had a cost of $72,000 and an estimated useful life of nine years with zero value at that time.What is the machine's carrying value after four years?
b.On April 1,2012,a company paid in advance $108,000 for three years' insurance.How much Prepaid Insurance remains on the balance sheet on December 31,2012?
c.A company began the year with $1,600 in supplies,purchased $4,000 in supplies,and ended the period with $1,200 in supplies.How much is Supplies Expense for the period?
d.A company was paid $3,600 in advance for services to be performed.At year end,one-third had not yet been earned.How much in Service Revenue should be recorded?

Accepted Answer

a.$40,000 [$72,000 - ($72,000

Question 9

Closing entries deal primarily with the balances of real accounts.

Accepted Answer

A) True 
 B)False

Question 10

Match each definition with the correct term below.
-Adjusted trial balance

Accepted Answer

A) Used to determine that all temporary accounts have zero balances. 
B) The postponement of the recognition of an expense already paid. 
C) Accounts that begin each accounting period with a zero balance. 
D) Increases in stockholders' equity resulting from selling goods. 
E) Revenue that is received in advance of goods delivery or service performance.
F)Accounts that carry their end-of-period balances into the next accounting period.
G)The recognition of a revenue or an expense that has arisen but not been recorded during the accounting period.
H)Decreases in stockholders' equity resulting from the cost of selling goods.
I)Used after making adjusting journal entries to ensure that debits equal credits.
J)Revenues that a company has earned by performing a service or delivering goods but for which no entry 
A) Used to determine that all temporary accounts have zero balances. 
B) The postponement of the recognition of an expense already paid. 
C) Accounts that begin each accounting period with a zero balance. 
D) Increases in stockholders' equity resulting from selling goods. 
E) Revenue that is received in advance of goods delivery or service performance.
F)Accounts that carry their end-of-period balances into the next accounting period.
G)The recognition of a revenue or an expense that has arisen but not been recorded during the accounting period.
H)Decreases in stockholders' equity resulting from the cost of selling goods.
I)Used after making adjusting journal entries to ensure that debits equal credits.
J)Revenues that a company has earned by performing a service or delivering goods but for which no entry

Question 11

The going concern assumption helps solve the

Accepted Answer

A)  matching rule issue. 
B)  periodicity issue. 
C)  recognition issue. 
D)  continuity issue. 
A)  matching rule issue. 
B)  periodicity issue. 
C)  recognition issue. 
D)  continuity issue.

Question 12

Revenue is produced when accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 13

When preparing financial statements,the accountant assumes that the business will not continue to operate indefinitely unless there is evidence to the contrary.

Accepted Answer

A) True 
 B)False

Question 14

Unearned Revenue was $600 at the end of February and $750 at the end of March.Service Revenue was $4,200 for the month of March.How much cash was received from revenue during March?

Accepted Answer

A)  $5,550 
B)  $4,050 
C)  $2,850 
D)  $4,350 
A)  $5,550 
B)  $4,050 
C)  $2,850 
D)  $4,350

Question 15

Which of the following transactions will not result in an increase in revenues?

Accepted Answer

A)  Sale of goods on credit 
B)  Sale of services for cash 
C)  Accumulation of interest in bank account 
D)  Sale of stock to investors for cash 
A)  Sale of goods on credit 
B)  Sale of services for cash 
C)  Accumulation of interest in bank account 
D)  Sale of stock to investors for cash

Question 16

An adjusting entry includes two balance sheet accounts or two income statement accounts.

Accepted Answer

A) True 
 B)False

Question 17

The adjustment entry for the expiration of prepaid advertising,originally recorded as an asset,is

Accepted Answer

A)  Advertising Expense - Debit; Prepaid Advertising - Credit 
B)  Prepaid Advertising - Debit; Cash - Credit 
C)  Advertising Expense - Debit; Cash - Credit 
D)  Prepaid Advertising - Debit; Advertising Expense - Credit 
A)  Advertising Expense - Debit; Prepaid Advertising - Credit 
B)  Prepaid Advertising - Debit; Cash - Credit 
C)  Advertising Expense - Debit; Cash - Credit 
D)  Prepaid Advertising - Debit; Advertising Expense - Credit

Question 18

Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?

Accepted Answer

A)  Performance of a service for which payment was received in advance 
B)  Payment of this month's rent 
C)  Purchase of office equipment 
D)  Purchase of a two-year insurance policy 
A)  Performance of a service for which payment was received in advance 
B)  Payment of this month's rent 
C)  Purchase of office equipment 
D)  Purchase of a two-year insurance policy

Question 19

Which of the following accounts probably would be larger in amount on an adjusted trial balance than on a trial balance?

Accepted Answer

A)  Accumulated Depreciation 
B)  Cash 
C)  Prepaid Rent 
D)  Store Supplies 
A)  Accumulated Depreciation 
B)  Cash 
C)  Prepaid Rent 
D)  Store Supplies

Question 20

The income statement for Hampshire Corporation included the following revenues and expenses for the year:
   Listed below are the related balance sheet account balances at year end for this year and last year:
   
a.Compute cash received for fees during the year.
b.Compute cash paid for wages during the year.
c.Compute cash paid for insurance during the year.
d.Compute cash paid for interest during the year.

Accepted Answer

a.$208,400 ($15,600 + $206,000

Use this information pertaining to the Essex Corporation to answer the following question. The adjusting entry for depreciation on the building is

The principal difference between depreciation expense and most other types of expenses is that depreciation

How and why is the matching rule applied to the cost of a building?

Expenses are often called the cost of doing business or expired costs.

In November,cash is received in advance of rendering services.Assuming that the services have been performed by December 31,the adjusting entry would be

Given the adjusted trial balance below,prepare (in good form)an income statement,statement of retained earnings,and balance sheet.The name of the business is Hampden Cleaning Service and the accounting period coincides with the calendar year.

Closing entries deal primarily with the balances of real accounts.

Match each definition with the correct term below. -Adjusted trial balance

The going concern assumption helps solve the

Revenue is produced when accounts receivable are collected.

When preparing financial statements,the accountant assumes that the business will not continue to operate indefinitely unless there is evidence to the contrary.

Unearned Revenue was $600 at the end of February and $750 at the end of March.Service Revenue was $4,200 for the month of March.How much cash was received from revenue during March?

Which of the following transactions will not result in an increase in revenues?

An adjusting entry includes two balance sheet accounts or two income statement accounts.

The adjustment entry for the expiration of prepaid advertising,originally recorded as an asset,is

Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?

Which of the following accounts probably would be larger in amount on an adjusted trial balance than on a trial balance?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 3: Measuring Business Income

Use this information pertaining to the Essex Corporation to answer the following question. The adjusting entry for depreciation on the building is

The principal difference between depreciation expense and most other types of expenses is that depreciation

How and why is the matching rule applied to the cost of a building?

Expenses are often called the cost of doing business or expired costs.

In November,cash is received in advance of rendering services.Assuming that the services have been performed by December 31,the adjusting entry would be

Given the adjusted trial balance below,prepare (in good form)an income statement,statement of retained earnings,and balance sheet.The name of the business is Hampden Cleaning Service and the accounting period coincides with the calendar year.

Closing entries deal primarily with the balances of real accounts.

Match each definition with the correct term below. -Adjusted trial balance

The going concern assumption helps solve the

Revenue is produced when accounts receivable are collected.

When preparing financial statements,the accountant assumes that the business will not continue to operate indefinitely unless there is evidence to the contrary.

Unearned Revenue was $600 at the end of February and $750 at the end of March.Service Revenue was $4,200 for the month of March.How much cash was received from revenue during March?

Which of the following transactions will not result in an increase in revenues?

An adjusting entry includes two balance sheet accounts or two income statement accounts.

The adjustment entry for the expiration of prepaid advertising,originally recorded as an asset,is

Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?

Which of the following accounts probably would be larger in amount on an adjusted trial balance than on a trial balance?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters