Question 1

Which of the following is an example of an accrual?

Accepted Answer

A)  Debit Office Supplies Expense,credit Office Supplies 
B)  Debit Wages Expense,credit Wages Payable 
C)  Debit Rent Expense,credit Prepaid Rent 
D)  Debit Unearned Revenue,credit Revenue from Services 
A)  Debit Office Supplies Expense,credit Office Supplies 
B)  Debit Wages Expense,credit Wages Payable 
C)  Debit Rent Expense,credit Prepaid Rent 
D)  Debit Unearned Revenue,credit Revenue from Services

Question 2

The following amounts are taken from the balance sheets of Baltic Corporation:
 $\begin{array}{|l|r|r|}
\hline & \text { December 31, 2013 } & \text { December 31, 2012 } \
\hline & & \
\text { Accrued liabilities } & \$ 44,000 & \$ 37,500 \
\text { Prepaid expenses } & 14,000 & 18,500 \
\hline
\end{array}$ During 2013,expenses related to accrued liabilities were $30,500,and expenses related to prepaid expenses were $21,000. 
a.Compute cash payments related to accrued liabilities.
b.Compute cash payments related to prepaid expenses.

Accepted Answer

a.$24,000 ($37,500 +

Question 3

The adjusted trial balance facilitates the preparation of the financial statements.

Accepted Answer

A) True 
 B)False

Question 4

Not all decreases in stockholders' equity are a result of expenses.

Accepted Answer

A) True 
 B)False

Question 5

Use this adjusted trial balance to answer the following question.   The entry to close the Boat Rentals account includes a

Accepted Answer

A)  debit to Retained Earnings for $34,000. 
B)  debit to Income Summary for $34,000. 
C)  debit to Boat Rentals for $34,000. 
D)  credit to Boat Rentals for $34,000. 
A)  debit to Retained Earnings for $34,000. 
B)  debit to Income Summary for $34,000. 
C)  debit to Boat Rentals for $34,000. 
D)  credit to Boat Rentals for $34,000.

Question 6

Which of the following is an example of a deferral?

Accepted Answer

A)  Debit Interest Expense,credit Interest Payable 
B)  Debit Accounts Receivable,credit Legal Fees Earned 
C)  Debit Property Taxes Expense,credit Property Taxes Payable 
D)  Debit Depreciation Expense-Truck,credit Accumulated Depreciation-Truck 
A)  Debit Interest Expense,credit Interest Payable 
B)  Debit Accounts Receivable,credit Legal Fees Earned 
C)  Debit Property Taxes Expense,credit Property Taxes Payable 
D)  Debit Depreciation Expense-Truck,credit Accumulated Depreciation-Truck

Question 7

Use this information to answer the following question. The trial balance for Barnstable Corporation appears as follows:
  If services totaling $250 had been performed but not billed,the adjusting entry to record this would include a

Accepted Answer

A)  credit to Unearned Service Revenue for $250. 
B)  debit to Service Revenue Earned for $250. 
C)  credit to Service Revenue Earned for $250. 
D)  credit to Service Revenue Earned for $750. 
A)  credit to Unearned Service Revenue for $250. 
B)  debit to Service Revenue Earned for $250. 
C)  credit to Service Revenue Earned for $250. 
D)  credit to Service Revenue Earned for $750.

Question 8

Accounting periods should be of unequal length to facilitate comparisons between periods.

Accepted Answer

A) True 
 B)False

Question 9

Net income is misleading when revenue is overstated or expenses are understated by significant amounts.

Accepted Answer

A) True 
 B)False

Question 10

An important purpose of closing entries is to

Accepted Answer

A)  update the nominal accounts at year end. 
B)  set permanent account balances to zero to begin the next period. 
C)  help achieve the goals of the matching principle. 
D)  transfer net income or loss to Retained Earnings. 
A)  update the nominal accounts at year end. 
B)  set permanent account balances to zero to begin the next period. 
C)  help achieve the goals of the matching principle. 
D)  transfer net income or loss to Retained Earnings.

Question 11

The Supplies Expense account on the income statement is related to the Supplies Payable account on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 12

Making an assumption about periodicity attempts to solve which income measurement issue?

Accepted Answer

A)  Accounting period issue. 
B)  Continuity issue. 
C)  Matching issue. 
D)  Recognition issue. 
A)  Accounting period issue. 
B)  Continuity issue. 
C)  Matching issue. 
D)  Recognition issue.

Question 13

Below are the adjusted accounts of Midlesex Realtors,Inc.,for the month ended July 31,2013,listed in alphabetical order:
   Prepare a post-closing trial balance.

Accepted Answer

@#IMG-DLM& *Retained Earnings

Question 14

The Income Summary account is credited in the entry that closes

Accepted Answer

A)  the expense accounts. 
B)  the revenue accounts. 
C)  the Dividends account. 
D)  net income. 
A)  the expense accounts. 
B)  the revenue accounts. 
C)  the Dividends account. 
D)  net income.

Question 15

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

Accepted Answer

Net income is determined by subtracting

Which of the following is an example of an accrual?

The adjusted trial balance facilitates the preparation of the financial statements.

Not all decreases in stockholders' equity are a result of expenses.

Use this adjusted trial balance to answer the following question. The entry to close the Boat Rentals account includes a

Which of the following is an example of a deferral?

Use this information to answer the following question. The trial balance for Barnstable Corporation appears as follows: If services totaling $250 had been performed but not billed,the adjusting entry to record this would include a

Accounting periods should be of unequal length to facilitate comparisons between periods.

Net income is misleading when revenue is overstated or expenses are understated by significant amounts.

An important purpose of closing entries is to

The Supplies Expense account on the income statement is related to the Supplies Payable account on the balance sheet.

Making an assumption about periodicity attempts to solve which income measurement issue?

Below are the adjusted accounts of Midlesex Realtors,Inc.,for the month ended July 31,2013,listed in alphabetical order: Prepare a post-closing trial balance.

The Income Summary account is credited in the entry that closes

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

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

Which of the following is an example of an accrual?

The adjusted trial balance facilitates the preparation of the financial statements.

Not all decreases in stockholders' equity are a result of expenses.

Use this adjusted trial balance to answer the following question. The entry to close the Boat Rentals account includes a

Which of the following is an example of a deferral?

Use this information to answer the following question. The trial balance for Barnstable Corporation appears as follows: If services totaling $250 had been performed but not billed,the adjusting entry to record this would include a

Accounting periods should be of unequal length to facilitate comparisons between periods.

Net income is misleading when revenue is overstated or expenses are understated by significant amounts.

An important purpose of closing entries is to

The Supplies Expense account on the income statement is related to the Supplies Payable account on the balance sheet.

Making an assumption about periodicity attempts to solve which income measurement issue?

Below are the adjusted accounts of Midlesex Realtors,Inc.,for the month ended July 31,2013,listed in alphabetical order: Prepare a post-closing trial balance.

The Income Summary account is credited in the entry that closes

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

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