Question 1

Prepaid expenses may be initially recorded as liabilities or revenues.

Accepted Answer

A) True 
 B)False

Question 2

Balance sheet accounts are the first accounts to be listed on the unadjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 3

Adjusting journal entries are normally not necessary when cash based accounting is used.

Accepted Answer

A) True 
 B)False

Question 4

Deferrals occur when a company receives or pays cash before recognizing revenue or expense in the income statement.

Accepted Answer

A) True 
 B)False

Question 5

If a company does not adjust a prepaid expense initially recorded as an asset,expenses will be overstated.

Accepted Answer

A) True 
 B)False

Question 6

Permanent accounts do not include ________.

Accepted Answer

A) Rent Expense 
B) Taxes Payable 
C) Prepaid Insurance 
D) Interest Receivable 
A) Rent Expense 
B) Taxes Payable 
C) Prepaid Insurance 
D) Interest Receivable

Question 7

The accounting equation my be stated as Assets = Liabilities + Shareholders' Equity.

Accepted Answer

A) True 
 B)False

Question 8

Accumulated other comprehensive income is included in retained earnings.

Accepted Answer

A) True 
 B)False

Question 9

Jones Company sold merchandise on account for $90,000.This merchandise cost $52,000.The company uses the perpetual method of accounting for inventory.What would be the correct journal entry to record the transaction?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 10

The balance in the common stock account is increased by a credit.

Accepted Answer

A) True 
 B)False

Question 11

Accounts are presented in the general ledger in the same order as they are presented in the financial statements.

Accepted Answer

A) True 
 B)False

Question 12

If an unearned revenue is initially recorded as a liability,the end-of-period adjusting entry records the expired portion.

Accepted Answer

A) True 
 B)False

Question 13

Atlas Corporation sold a used machine for less than its carrying value.This transaction is a(n)________.

Accepted Answer

A) revenue 
B) expense 
C) gain 
D) loss 
A) revenue 
B) expense 
C) gain 
D) loss

Question 14

Which of the following accounts has a normal credit balance?

Accepted Answer

A) Interest Expense 
B) Deferred Revenue 
C) Investments 
D) Loss on Sale of Equipment 
A) Interest Expense 
B) Deferred Revenue 
C) Investments 
D) Loss on Sale of Equipment

Question 15

The final financial statement to be prepared from the adjusted trial balance is the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 16

Murphy Corporation engaged in the following transactions during the month of February.Please analyze these transactions indicate whether they cause an increase (+)or decrease (-)in the balance sheet and income statement accounts.

Accepted Answer

The answer of Murphy Corporation engaged in the following transactions...

Question 17

Adjusting journal entries are made to ensure that all revenues and/or expenses are recognized in the period in which they are incurred.

Accepted Answer

A) True 
 B)False

Question 18

The first step in preparing a worksheet is to record the adjusting journal entries.

Accepted Answer

A) True 
 B)False

Question 19

Arnold Company provided services to its customers on credit for $25,000.This transaction ________.

Accepted Answer

A) increased assets 
B) increased liabilities 
C) increased expenses 
D) decreased shareholders' equity 
A) increased assets 
B) increased liabilities 
C) increased expenses 
D) decreased shareholders' equity

Question 20

The adjusted trial balance includes only permanent accounts.

Accepted Answer

A) True 
 B)False

Exam 4: Review of the Accounting Cycle

Prepaid expenses may be initially recorded as liabilities or revenues.

Balance sheet accounts are the first accounts to be listed on the unadjusted trial balance.

Adjusting journal entries are normally not necessary when cash based accounting is used.

Deferrals occur when a company receives or pays cash before recognizing revenue or expense in the income statement.

If a company does not adjust a prepaid expense initially recorded as an asset,expenses will be overstated.

Permanent accounts do not include ________.

The accounting equation my be stated as Assets = Liabilities + Shareholders' Equity.

Accumulated other comprehensive income is included in retained earnings.

Jones Company sold merchandise on account for $90,000.This merchandise cost $52,000.The company uses the perpetual method of accounting for inventory.What would be the correct journal entry to record the transaction?

The balance in the common stock account is increased by a credit.

Accounts are presented in the general ledger in the same order as they are presented in the financial statements.

If an unearned revenue is initially recorded as a liability,the end-of-period adjusting entry records the expired portion.

Atlas Corporation sold a used machine for less than its carrying value.This transaction is a(n)________.

Which of the following accounts has a normal credit balance?

The final financial statement to be prepared from the adjusted trial balance is the statement of cash flows.

Murphy Corporation engaged in the following transactions during the month of February.Please analyze these transactions indicate whether they cause an increase (+)or decrease (-)in the balance sheet and income statement accounts.

Adjusting journal entries are made to ensure that all revenues and/or expenses are recognized in the period in which they are incurred.

The first step in preparing a worksheet is to record the adjusting journal entries.

Arnold Company provided services to its customers on credit for $25,000.This transaction ________.

The adjusted trial balance includes only permanent accounts.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters