Question 1

An adjusting entry could not consist of a debit to a(n)

Accepted Answer

A) liability and a credit to revenue. 
B) expense and a credit to a liability. 
C) expense and a credit to an asset. 
D) expense and a credit to revenue. 
A) liability and a credit to revenue. 
B) expense and a credit to a liability. 
C) expense and a credit to an asset. 
D) expense and a credit to revenue.

Question 2

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

Accepted Answer

A) Business transactions are recorded. 
B) Adjustments are recorded. 
C) Transactions are journalized. 
D) Journal entries are posted to the ledger. 
A) Business transactions are recorded. 
B) Adjustments are recorded. 
C) Transactions are journalized. 
D) Journal entries are posted to the ledger.

Question 3

A pool cleaning service signs a contract with a new customer on May 1.The pool is vacuumed and "shocked" for the customer on June 1,and the bill for the services is paid on July 1.Under the accrual basis,the business should recognize revenue on

Accepted Answer

A) December 31. 
B) July 1. 
C) June 1. 
D) May 1. 
A) December 31. 
B) July 1. 
C) June 1. 
D) May 1.

Question 4

Balance sheet accounts are also known as which of the following?

Accepted Answer

A) Nominal accounts 
B) Real accounts 
C) Temporary accounts 
D) Closing accounts 
A) Nominal accounts 
B) Real accounts 
C) Temporary accounts 
D) Closing accounts

Question 5

Roman Industries' plant operates five days per week with a daily payroll of $6,000.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 amount of Wages Expense recorded on the next payday,Saturday,April 3?

Accepted Answer

A) $0 
B) $30,000 
C) $12,000 
D) $18,000 
A) $0 
B) $30,000 
C) $12,000 
D) $18,000

Question 6

Charlie Company had $1,800 of supplies on hand at January 1.During the year,supplies with a cost of $4,000 were purchased.At December 31,the actual supplies on hand amount to $1,300.After the adjustments are recorded and posted at December 31,determine the balances in the Supplies and Supplies Expense accounts.  
$\begin{array}{llcc}
&&  \text { Supplies } &  \text { Supplies Expense } \
\end{array}$

a.
$\begin{array}{cc}
&&&\$1,800&&&\$4,000
\end{array}$

b.
$\begin{array}{cc}
&&&\$1,300&&&\$4,500
\end{array}$

c.
$\begin{array}{cc}
&&&\$5,300&&&\$5,800
\end{array}$

d.
$\begin{array}{cc} 
&&&\$1,300&&&\$5,800
\end{array}$

Accepted Answer

The answer of Charlie Company had $1,800 of supplies on...

Question 7

All of the following statements are true regarding the use of a work sheet at the end of an accounting period except

Accepted Answer

A) all companies use a 10-column work sheet. 
B) the use of a work sheet allows the accountant to gather and organize information to adjust the account. 
C) the use of a work sheet allows the accountant to prepare adjustments without actually posting them to the accounts. 
D) the use of a work sheet allows the accountant to prepare financial statements and then post the entries to the accounts. 
A) all companies use a 10-column work sheet. 
B) the use of a work sheet allows the accountant to gather and organize information to adjust the account. 
C) the use of a work sheet allows the accountant to prepare adjustments without actually posting them to the accounts. 
D) the use of a work sheet allows the accountant to prepare financial statements and then post the entries to the accounts.

Question 8

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. On July 31,the amount of supplies on hand is $520.What amount is reported in the July income statement for supplies expense?

Accepted Answer

A) $520 
B) $1,400 
C) $1,920 
D) $880 
A) $520 
B) $1,400 
C) $1,920 
D) $880

Question 9

The amount of interest accrued is added to the Note Payable account and reported in the Liabilities section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

Tiva Solutions’ accounting records reflect the following account balances at December 31, 2017:
 $\begin{array} { l r l r } 
\text { Building } & \$ 560,000 & \text { Accumulated Depreciation- } & \$ 112,000 \
&& \text { Building } \\
\text { Cash } & 90,000 &\text { Capital Stock }& 343,000 \
\text { Supplies } & 5,000 & \text { Retained Earnings } & 200,000
\end{array}$
During 2017, the following transactions occurred:
 
1.	On March 1, purchased a one-year insurance policy for $1,200 cash.
2.	On April 1, borrowed $10,000 cash from Rock City Bank. The interest rate on the note payable is 6%. 
Principal and interest is due in cash in one year.
3.	Employee salaries in the amount of $20,000 were paid in cash.
4.	At the end of the year, $400 of the supplies remained on hand.
5.	Earned $45,000 in tax consulting revenue during 2017 in cash.
6.	At December 31, $5,000 in employee salaries were accrued.
7.	On December 31, received $2,000 in cash representing advance payment for services to be provided in February 2018.
8.	The building has a useful life of 25 years and no salvage value.

The building has a useful life of 25 years and no salvage value.
 
Required
 
 A. Determine the effect on the accounting equation of the preceding transactions including any related year-end adjusting entries that may be required. Create a table to reflect the increases and decreases in accounts.  
   B. Prepare an income statement for Tiva Solutions for 2017. Ignore income tax effects.
C. Prepare a classified balance sheet for Tiva Solutions at December 31, 2017.

Accepted Answer

None

Question 11

Some of the steps in the accounting cycle are listed below.Select the choice that places these steps in the correct order. 
1)Close the accounts.
2)Post transactions to accounts in the ledger.
3)Journalize daily transactions.
4)Record and post adjustments.
5)Prepare financial statements.

Accepted Answer

A) 2,3,4,5,1 
B) 3,2,4,5,1 
C) 3,2,4,1,5 
D) 3,2,5,4,1 
A) 2,3,4,5,1 
B) 3,2,4,5,1 
C) 3,2,4,1,5 
D) 3,2,5,4,1

Question 12

Carter,Inc.paid salaries expense of $292,000 during 2017.However,additional salaries of $14,000 had been earned by employees,but not paid or recorded at December 31,2017 by Carter.
  A. What is the effect on the accounting equation of the adjusting entry necessary at December 31,2017 ?

B. Under which basis, cash, accrual, or both, would the adjustment in part A be prepared? Explain.

C. Under the accrual basis of accounting, what is the total amount of sal aries expense for the year ended December 31,2017?

D. Under the accrual basis of accounting, what is the total amount of sal aries payable to be reported at December 31,2017 ?

E. Under the cash basis of accounting, what is the total amount of sal aries expense for the year ending December 31,2017 ?

F. Under the cash basis of accounting, what is the total amount of sal aries payable at December 31,2017 ?

Accepted Answer

A.
?
 @#IMG-DLM& ?
 B. Only the accrual basis requ

Question 13

Fennel Flooring purchased office supplies for its showroom during the month of April for $2,600.The supplies were paid for during April.On April 1,the Supplies account had a balance of $350.On April 30,supplies on hand amounted to $200.
?
 A. What is the effect on the accounting equation of the adjusting journal entry necessary at April 30? ?
   B. How much will be reported on the balance sheet at April 30 for Supplies?

C. How much will be reported on the income statement for the month of April for supplies expense?

D. If the adjustment in part $A$ is not recorded, by what amount will net income be overor understated at April 30?

Accepted Answer

A.
 @#IMG-DLM& B. Supplies @#LAT-DLM&

C

Question 14

A decline in purchasing power is evidenced by all of the following except

Accepted Answer

A) inflation. 
B) a continuing rise in the general level of prices in an economy. 
C) buying the same amount of goods or services for a higher price a year later. 
D) current value is equal to historical cost. 
A) inflation. 
B) a continuing rise in the general level of prices in an economy. 
C) buying the same amount of goods or services for a higher price a year later. 
D) current value is equal to historical cost.

Question 15

Motor Repair Shop uses the accrual basis of accounting,and had the following account balances on its financial statements at December 31,2017:
?
 $$\begin{array} { l r } 
\text { Rent Revenue } & \$ 34,000 \
\text { Accounts Receivable } & 8,200 \
\text { Utilities Payable } & 1,500 \
\text { Rent Expense } & 2,100 \
\text { Unearned Repair Revenue } & 700 \
\text { Depreciation Expense } & 1,000 \
\text { Sal aries Expense } & 32,000 \
\text { Sal aries Payable } & 800 \
\text { Retained Earnings, January 1 } & 10,000 \
\text { Dividends } & 500 \
\text { Interest Revenue } & 4,000
\end{array}$$ On January 1,the Utilities Payable account had a zero balance.Motor Repair paid cash for utilities totaling $45,000 during 2017.How much should Motor Repair report as utilities expense as of December 31,2017?

Accepted Answer

$46,500
$45,000 (Cas

Question 16

Which of the following statements is true concerning the matching principle?

Accepted Answer

A) All costs can be directly matched with revenue. 
B) All costs can be indirectly matched with periods in which they provide a benefit. 
C) The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle. 
D) Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle. 
A) All costs can be directly matched with revenue. 
B) All costs can be indirectly matched with periods in which they provide a benefit. 
C) The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle. 
D) Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle.

Question 17

Grove Corp.purchased equipment at a cost of $260,000 in January 2016.As of January 1,2017,depreciation of $88,000 had been recorded on this asset.Depreciation expense for 2017 is $22,000.After the adjustments are recorded and posted at December 31,2017,what are the balances for Depreciation Expense and Accumulated Depreciation?  
$\begin{array}{cc}
  \text {  Depreciation Expense} &  \text { Accumulated Depreciation } \
\end{array}$

a.
$\begin{array}{cc}
&&&\$22,000&&&&&&\$110,000
\end{array}$

b.
$\begin{array}{cc}
&&&\$20,000&&&&&&\$88,000
\end{array}$

c.
$\begin{array}{cc}
&&&\$110,000&&&&&\$110,000
\end{array}$

d.
$\begin{array}{cc}
&&&\$110,000&&&&&\$88,000
\end{array}$

Accepted Answer

The answer of Grove Corp.purchased equipment at a cost of...

Question 18

Which of the following statements does not present financial information based on the accrual basis of accounting?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Statement of cash flows 
A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Statement of cash flows

Question 19

Deacon Company purchased equipment last year for $30,000.The equipment has an estimated useful life of five years and no salvage value.What amount will appear on the income statement for depreciation expense for the month of March 2017?​

Accepted Answer

A) $0 
B) $500 
C) $6,000 
D) $30,000 
A) $0 
B) $500 
C) $6,000 
D) $30,000

An adjusting entry could not consist of a debit to a(n)

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

A pool cleaning service signs a contract with a new customer on May 1.The pool is vacuumed and "shocked" for the customer on June 1,and the bill for the services is paid on July 1.Under the accrual basis,the business should recognize revenue on

Balance sheet accounts are also known as which of the following?

All of the following statements are true regarding the use of a work sheet at the end of an accounting period except

The amount of interest accrued is added to the Note Payable account and reported in the Liabilities section of the balance sheet.

Some of the steps in the accounting cycle are listed below.Select the choice that places these steps in the correct order. 1)Close the accounts. 2)Post transactions to accounts in the ledger. 3)Journalize daily transactions. 4)Record and post adjustments. 5)Prepare financial statements.

A decline in purchasing power is evidenced by all of the following except

Which of the following statements is true concerning the matching principle?

Which of the following statements does not present financial information based on the accrual basis of accounting?

Deacon Company purchased equipment last year for $30,000.The equipment has an estimated useful life of five years and no salvage value.What amount will appear on the income statement for depreciation expense for the month of March 2017?

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

An adjusting entry could not consist of a debit to a(n)

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

A pool cleaning service signs a contract with a new customer on May 1.The pool is vacuumed and "shocked" for the customer on June 1,and the bill for the services is paid on July 1.Under the accrual basis,the business should recognize revenue on

Balance sheet accounts are also known as which of the following?

All of the following statements are true regarding the use of a work sheet at the end of an accounting period except

The amount of interest accrued is added to the Note Payable account and reported in the Liabilities section of the balance sheet.

Some of the steps in the accounting cycle are listed below.Select the choice that places these steps in the correct order. 1)Close the accounts. 2)Post transactions to accounts in the ledger. 3)Journalize daily transactions. 4)Record and post adjustments. 5)Prepare financial statements.

A decline in purchasing power is evidenced by all of the following except

Which of the following statements is true concerning the matching principle?

Which of the following statements does not present financial information based on the accrual basis of accounting?

Deacon Company purchased equipment last year for $30,000.The equipment has an estimated useful life of five years and no salvage value.What amount will appear on the income statement for depreciation expense for the month of March 2017?​

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

Deacon Company purchased equipment last year for $30,000.The equipment has an estimated useful life of five years and no salvage value.What amount will appear on the income statement for depreciation expense for the month of March 2017?