Question 1

Expenses can be matched against revenue

Accepted Answer

A) if the earnings process is not complete. 
B) when cash is collected from the sale of products. 
C) through allocation to the accounting periods in which the benefits are recognized. 
D) when payment is made for costs related to revenue. 
A) if the earnings process is not complete. 
B) when cash is collected from the sale of products. 
C) through allocation to the accounting periods in which the benefits are recognized. 
D) when payment is made for costs related to revenue.

Question 2

Vivo Co.received an 8-month,9% note for $100,000 from its agent on October 1,2016.The note is due on May 30,2017.If Vivo accounting period ends on December 31,2016,how much interest revenue should Vivo recognize during 2016 and 2017?  
$\begin{array}{cc}
&&&\underline { 2016 }&&& \underline { 2017 } \
\end{array}$

a.
$\begin{array}{cc}
&&&\$3,750&&\$2,250
\end{array}$

b.
$\begin{array}{cc}
&&&\$2,250&&\$3,750
\end{array}$

c.
$\begin{array}{cc}
&&&\$9,000&&&\$0
\end{array}$

d.
$\begin{array}{cc} 
&&&\$3,375&&\$5,625
\end{array}$

Accepted Answer

The answer of Vivo Co.received an 8-month,9% note for $100,000...

Question 3

The difference between accrual-based revenue and accrual-based expenses is called _________________________.

Accepted Answer

The answer of The difference between accrual-based revenue and accrual-based...

Question 4

Emory Co.operates five days per week with a daily payroll of $4,000.Employees are paid every Saturday for the workweek just completed (Monday through Friday).The last day of the month is Wednesday,March 31.What is the effect of the correct adjustment at March 31?

Accepted Answer

A) Increases Stockholders' Equity and Wages Payable by $8,000 
B) Increases Wages Payable and decreases Cash by $12,000 
C) Decreases Stockholders' Equity and increases Wages Payable by $12,000 
D) Increases Wages Payable and increases Wages Expense by $8,000 
A) Increases Stockholders' Equity and Wages Payable by $8,000 
B) Increases Wages Payable and decreases Cash by $12,000 
C) Decreases Stockholders' Equity and increases Wages Payable by $12,000 
D) Increases Wages Payable and increases Wages Expense by $8,000

Question 5

Failure to record amounts earned for services provided to customers but not yet paid results in which of the following

Accepted Answer

A) Net income being overstated 
B) No effect on total assets 
C) Stockholders' equity being overstated 
D) Total assets being understated 
A) Net income being overstated 
B) No effect on total assets 
C) Stockholders' equity being overstated 
D) Total assets being understated

Question 6

CBA Corp.has grown significantly over the past year.One area that has plagued the controller of CBA is the reconciliation of supplies expense.The end-of-year supplies on hand totaled $20,purchases totaled $500,and supplies on hand at the beginning of the year amounted to $300.How much will CBA report as supplies expense for the current year?

Accepted Answer

A) $20 
B) $780 
C) $300 
D) $500 
A) $20 
B) $780 
C) $300 
D) $500

Question 7

Given below are the amounts from Surf Corporation's ledger accounts after adjustments have been posted at December 31,2017.
?
 $$\begin{array} { l r l r } 
\text { Sales Revenue } & \$ 60,000 & \text { Accounts Receivable } & \$ 8,200 \
\text { Accounts Payable } & 1,500 & \text { Rent Expense } & 2,100 \
\text { Cash } & 25,600 & \text { Prepaid Rent } & 1,500 \
\text { Salaries Expense } & 2,900 & \text { Salaries Payable } & 800 \
\text { Retained Earnings, January 1 } & 22,100 & \text { Dividends } & 5,000 \
\text { Depreciation Expense } & 1,000 & \text { Supplies } & 900 \
\text { Supplies Expense } & 2,200 & \text { Cost of Goods Sold } & 40,000 \
\text { Notes Payable } & 3,000 & \text { Common Stock } & 2,000
\end{array}$$ A. Identify which adjustments that Surf Corporation most likely made that are:

1) Accrued assets

2) Accrued liabilities

B. Which accounts listed above would not be used in a cash-basis system?

Accepted Answer

?
 A. 1) Accrued assets: Accounts Receiv

Question 8

Autumn Resorts purchased guest room furniture on January 1,2017 for $120,000.The furniture has an estimated useful life of 10 years and no salvage value.What amount will appear on Autumn's income statement for depreciation expense for the year ending June 30,2018?

Accepted Answer

A) $1,000 
B) $6,000 
C) $10,000 
D) $12,000 
A) $1,000 
B) $6,000 
C) $10,000 
D) $12,000

Question 9

Brooke Accounting Services collected $15,000 from a customer on June 1 and agreed to provide accounting services during the next six months. Brooke expects to provide an equal amount of services each month.

Required
1. Prepare the journal entry for the receipt of the customer deposit on June 1.
2. Prepare the adjusting entry on June 30.
3. What will be the effect on net income for June if the entry in (2) is not recorded?

Accepted Answer

None

Question 10

When cash is paid before an expense is incurred,an accrual is necessary.

Accepted Answer

A) True 
 B)False

Question 11

Why does the accrual basis of accounting require adjustments,while the cash basis does not?

Accepted Answer

Adjustments are necessary under the accr

Question 12

Failure to record accrued interest expense would result in which of the following?

Accepted Answer

A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated 
A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated

Question 13

Union Company purchased a delivery van at a cost of $30,000 cash on January 1,2016.The van has an estimated useful life of six years and a $6,000 estimated residual value.
?
 $$\text { A. What is the effect on the accounting equation of the purchase of the van? }$$ ?
   B. How much depreciation expense should be reported for 2017 ?

C. What is the total amount of accumulated depreciation at December 31,2017 ?

Accepted Answer

The answer of Union Company purchased a delivery van at...

Question 14

Jenning Co.
Jenning Co.adjusts its books each month but closes its books at the end of the year.The trial balance at July 31 before adjustments is as follows:
 $\begin{array}{lr}
&\text { Debit }&\text {Credit }\
\text { Cash } & \$ 12,920 \
\text { Accounts Receivable } & 9,620 \
\text { Supplies } & 1,400 \
\text { Prepaid Insurance } & 3,120 \
\text { Equipment } & 26,000\
\text { Accumulated Depreciation-Equipment } && \$ 10,400 \
\text { Unearned Service Revenue } && 6,500 \
\text { Capital Stock } && 7,190 \
\text { Retained Earnings } && 23,500\
\text { Dividends } & 1,560 \
\text { Service Revenue } &&16,510 \
\text { Wages and Salaries Expense } & 7,800 \
\text { Utilities Expense } & 380 \
\text { Rent Expense } & \underline{1,300} \
&  \underline{\$ 64,100}& \underline{\$64,000} \
\end{array}$
-Refer to the trial balance for Jenning Co. ?
Employees are owed $750 for services since the last payday in July,to be paid the first week in August.The amount to be reported in the July income statement for salaries expense is

Accepted Answer

A) $750. 
B) $8,550. 
C) $7,050. 
D) $7,800. 
A) $750. 
B) $8,550. 
C) $7,050. 
D) $7,800.

Question 15

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?

Accepted Answer

A) Assets increase and liabilities increase. 
B) Assets increase and stockholders' equity increases. 
C) Assets decrease and liabilities decrease. 
D) Stockholders' equity increases and decreases by the same amount. 
A) Assets increase and liabilities increase. 
B) Assets increase and stockholders' equity increases. 
C) Assets decrease and liabilities decrease. 
D) Stockholders' equity increases and decreases by the same amount.

Question 16

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Accepted Answer

A) Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays. 
B) Prepaid insurance is assigned to expense as the insurance expires. 
C) A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used. 
D) Merchandise inventory is assigned to cost of goods sold in the period the goods are sold. 
A) Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays. 
B) Prepaid insurance is assigned to expense as the insurance expires. 
C) A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used. 
D) Merchandise inventory is assigned to cost of goods sold in the period the goods are sold.

Question 17

Describe the benefit(s)of using the accrual process as compared to the cash basis.

Accepted Answer

Cash-basis accounting is not conducive t

Question 18

Adjustments are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following accounts is not closed to Income Summary at the end of the accounting period?

Accepted Answer

A) Rent Expense 
B) Service Revenue 
C) Unearned Revenue 
D) Supplies Expense 
A) Rent Expense 
B) Service Revenue 
C) Unearned Revenue 
D) Supplies Expense

Question 20

The amount of cash that could be received by selling an asset currently is called historical cost.

Accepted Answer

A) True 
 B)False

Expenses can be matched against revenue

The difference between accrual-based revenue and accrual-based expenses is called _________________________.

Emory Co.operates five days per week with a daily payroll of $4,000.Employees are paid every Saturday for the workweek just completed (Monday through Friday).The last day of the month is Wednesday,March 31.What is the effect of the correct adjustment at March 31?

Failure to record amounts earned for services provided to customers but not yet paid results in which of the following

Autumn Resorts purchased guest room furniture on January 1,2017 for $120,000.The furniture has an estimated useful life of 10 years and no salvage value.What amount will appear on Autumn's income statement for depreciation expense for the year ending June 30,2018?

When cash is paid before an expense is incurred,an accrual is necessary.

Why does the accrual basis of accounting require adjustments,while the cash basis does not?

Failure to record accrued interest expense would result in which of the following?

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Describe the benefit(s)of using the accrual process as compared to the cash basis.

Adjustments are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Which of the following accounts is not closed to Income Summary at the end of the accounting period?

The amount of cash that could be received by selling an asset currently is called historical cost.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 4: Income Measurement and Accrual Accounting

Expenses can be matched against revenue

The difference between accrual-based revenue and accrual-based expenses is called _________________________.

Emory Co.operates five days per week with a daily payroll of $4,000.Employees are paid every Saturday for the workweek just completed (Monday through Friday).The last day of the month is Wednesday,March 31.What is the effect of the correct adjustment at March 31?

Failure to record amounts earned for services provided to customers but not yet paid results in which of the following

Autumn Resorts purchased guest room furniture on January 1,2017 for $120,000.The furniture has an estimated useful life of 10 years and no salvage value.What amount will appear on Autumn's income statement for depreciation expense for the year ending June 30,2018?

When cash is paid before an expense is incurred,an accrual is necessary.

Why does the accrual basis of accounting require adjustments,while the cash basis does not?

Failure to record accrued interest expense would result in which of the following?

What happens to the accounting equation when the adjustment that recognizes accrued interest revenue is recorded?

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Describe the benefit(s)of using the accrual process as compared to the cash basis.

Adjustments are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Which of the following accounts is not closed to Income Summary at the end of the accounting period?

The amount of cash that could be received by selling an asset currently is called historical cost.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters