Question 1

Net income provides a good measure of a business's debt-paying ability.

Accepted Answer

A) True 
 B)False

Question 2

The Retained Earnings,Dividends,and Income Summary accounts for Suffolk's Repair Shop for the accounting period are presented below in T account form after the recording and posting of closing entries.
     From the T accounts,determine the following: 
a.Revenue for the period
b.Net income (or net loss)
c.Dividends for the period
d.Ending balance of Retained Earnings

Accepted Answer

a.$1,800 
b.($200)[$

Question 3

On which financial statement does the Income Summary account appear?

Accepted Answer

A)  Statement of Retained Earnings 
B)  Balance Sheet 
C)  Income Statement 
D)  It doesn't appear on a financial statement 
A)  Statement of Retained Earnings 
B)  Balance Sheet 
C)  Income Statement 
D)  It doesn't appear on a financial statement

Question 4

Closing entries result in the transfer of net income or loss into the Retained Earnings account.

Accepted Answer

A) True 
 B)False

Question 5

Bristol Enterprises had supplies on hand costing $480 on December 31.During the same year,supplies costing $1,000 were purchased,and $640 in supplies were consumed during the year.What was the cost of supplies on hand on January 1 of that year?

Accepted Answer

$480 + $64

Question 6

Instead of the word net income,accountants use net profit because the latter term can be defined more precisely.

Accepted Answer

A) True 
 B)False

Question 7

Match each definition with the correct term below.
-Accrued revenues

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 8

Revenue for which the service has been performed but no entry has been made in the accounting records is called prepaid revenue.

Accepted Answer

A) True 
 B)False

Question 9

Dukes Press pays wages of $12,000 every Friday for a five-day workweek.September 30,the last day of the fiscal year,falls on a Tuesday.In the journal provided,prepare the September 30 adjusting entry as well as the October 3 follow-up entry when the wages are paid.Omit explanations.

Accepted Answer

The answer of Dukes Press pays wages of $12,000 every...

Question 10

Which of the following conditions is not a requirement by the SEC for the recognition of revenue?

Accepted Answer

A)  Delivery has occurred or services have been rendered. 
B)  Collectability is reasonably certain. 
C)  A written agreement has been signed. 
D)  The seller's price to the buyer is fixed or determinable. 
A)  Delivery has occurred or services have been rendered. 
B)  Collectability is reasonably certain. 
C)  A written agreement has been signed. 
D)  The seller's price to the buyer is fixed or determinable.

Question 11

Closing entries are journal entries made at the beginning of an accounting period.

Accepted Answer

A) True 
 B)False

Question 12

Prepaid Rent was $800 at the end of May and $1,300 at the end of June.Rent Expense for June was $520.How much cash was paid for rent during June?

Accepted Answer

A)  $620 
B)  $820 
C)  $1,020 
D)  $1,220 
A)  $620 
B)  $820 
C)  $1,020 
D)  $1,220

Question 13

All transactions can be easily assigned to specific accounting periods.

Accepted Answer

A) True 
 B)False

Question 14

A contra account is an account whose balance is added to an associated account in the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

Accounts Receivable is a real account.

Accepted Answer

A) True 
 B)False

Question 16

Adjusting entries affect only the cash flows of the current period.

Accepted Answer

A) True 
 B)False

Question 17

An adjusted trial balance proves the balance of the ledger accounts after the adjusting entries have been posted.

Accepted Answer

A) True 
 B)False

Question 18

The matching rule relates the least to

Accepted Answer

A)  systematic and rational allocation. 
B)  the cash basis of accounting. 
C)  revenues and expenses. 
D)  cause-and-effect relationships. 
A)  systematic and rational allocation. 
B)  the cash basis of accounting. 
C)  revenues and expenses. 
D)  cause-and-effect relationships.

Question 19

Why will the Income Summary account never appear on any financial statement?

Accepted Answer

The Income Summary account beg

Question 20

Use this adjusted trial balance to answer the following question.   The entry to close Income Summary includes a

Accepted Answer

A)  credit to Common Stock for $16,000. 
B)  credit to Income Summary for $24,000. 
C)  debit to Income Summary for $14,000. 
D)  debit to Retained Earnings for $32,000. 
A)  credit to Common Stock for $16,000. 
B)  credit to Income Summary for $24,000. 
C)  debit to Income Summary for $14,000. 
D)  debit to Retained Earnings for $32,000.

Net income provides a good measure of a business's debt-paying ability.

On which financial statement does the Income Summary account appear?

Closing entries result in the transfer of net income or loss into the Retained Earnings account.

Bristol Enterprises had supplies on hand costing $480 on December 31.During the same year,supplies costing $1,000 were purchased,and $640 in supplies were consumed during the year.What was the cost of supplies on hand on January 1 of that year?

Instead of the word net income,accountants use net profit because the latter term can be defined more precisely.

Match each definition with the correct term below. -Accrued revenues

Revenue for which the service has been performed but no entry has been made in the accounting records is called prepaid revenue.

Dukes Press pays wages of $12,000 every Friday for a five-day workweek.September 30,the last day of the fiscal year,falls on a Tuesday.In the journal provided,prepare the September 30 adjusting entry as well as the October 3 follow-up entry when the wages are paid.Omit explanations.

Which of the following conditions is not a requirement by the SEC for the recognition of revenue?

Closing entries are journal entries made at the beginning of an accounting period.

Prepaid Rent was $800 at the end of May and $1,300 at the end of June.Rent Expense for June was $520.How much cash was paid for rent during June?

All transactions can be easily assigned to specific accounting periods.

A contra account is an account whose balance is added to an associated account in the financial statements.

Accounts Receivable is a real account.

Adjusting entries affect only the cash flows of the current period.

An adjusted trial balance proves the balance of the ledger accounts after the adjusting entries have been posted.

The matching rule relates the least to

Why will the Income Summary account never appear on any financial statement?

Use this adjusted trial balance to answer the following question. The entry to close Income Summary includes a

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

Net income provides a good measure of a business's debt-paying ability.

On which financial statement does the Income Summary account appear?

Closing entries result in the transfer of net income or loss into the Retained Earnings account.

Bristol Enterprises had supplies on hand costing $480 on December 31.During the same year,supplies costing $1,000 were purchased,and $640 in supplies were consumed during the year.What was the cost of supplies on hand on January 1 of that year?

Instead of the word net income,accountants use net profit because the latter term can be defined more precisely.

Match each definition with the correct term below. -Accrued revenues

Revenue for which the service has been performed but no entry has been made in the accounting records is called prepaid revenue.

Dukes Press pays wages of $12,000 every Friday for a five-day workweek.September 30,the last day of the fiscal year,falls on a Tuesday.In the journal provided,prepare the September 30 adjusting entry as well as the October 3 follow-up entry when the wages are paid.Omit explanations.

Which of the following conditions is not a requirement by the SEC for the recognition of revenue?

Closing entries are journal entries made at the beginning of an accounting period.

Prepaid Rent was $800 at the end of May and $1,300 at the end of June.Rent Expense for June was $520.How much cash was paid for rent during June?

All transactions can be easily assigned to specific accounting periods.

A contra account is an account whose balance is added to an associated account in the financial statements.

Accounts Receivable is a real account.

Adjusting entries affect only the cash flows of the current period.

An adjusted trial balance proves the balance of the ledger accounts after the adjusting entries have been posted.

The matching rule relates the least to

Why will the Income Summary account never appear on any financial statement?

Use this adjusted trial balance to answer the following question. The entry to close Income Summary includes a

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