Question 1

The process of recording an item in the financial statements is called measurement.

Accepted Answer

A) True 
 B)False

Question 2

Hsu Company purchased a truck on May 31,2014 for $70,000.The equipment has an estimated useful life of five years.What amount will appear on Hsu Company's balance sheet for total accumulated depreciation at May 31,2017?

Accepted Answer

A) $14,000 
B) $35,000 
C) $42,000 
D) $28,000 
A) $14,000 
B) $35,000 
C) $42,000 
D) $28,000

Question 3

Hensley Painting Company painted four houses in June at $500 each.At the end of June,three homeowners had paid Hensley cash for the jobs.Under the accrual basis,what amounts will be reported on the income statement and the statement of cash flows for June?  
$\begin{array}{l}
\text { Income Statement }&\text { Statement of Cash Flows }
\end{array}$
a.
$\begin{array}{cc}
&&&\$2,000&&&&&&\$2,000
\end{array}$

b.
$\begin{array}{cc}
&&&\$2,000&&&&&&\$1,500
\end{array}$

c.
$\begin{array}{cc}
&&&\$1,500&&&&&&\$1,500
\end{array}$

d.
$\begin{array}{cc}
&&&\$500&&&&&&&\$500
\end{array}$

Accepted Answer

The answer of Hensley Painting Company painted four houses in...

Question 4

Every company prepares only four adjustments-one for each of the four types of adjustments.

Accepted Answer

A) True 
 B)False

Question 5

Gear Shop purchased supplies at a cost of $1,000 during the year.At January 1,the beginning balance in the Supplies account was $300.At December 31,supplies on hand are $100.Determine supplies expense for the year.

Accepted Answer

A) $1,300 
B) $1,200 
C) $1,100 
D) $1,400 
A) $1,300 
B) $1,200 
C) $1,100 
D) $1,400

Question 6

Statements prepared monthly,quarterly,or at other intervals are called

Accepted Answer

A) trial balance statements. 
B) closing statements. 
C) interim statements. 
D) temporary statements. 
A) trial balance statements. 
B) closing statements. 
C) interim statements. 
D) temporary statements.

Question 7

Failure to record dividends paid would result in which of the following?

Accepted Answer

A) Net income being understated 
B) An increase in total liabilities 
C) Stockholders' equity being overstated 
D) Total assets being understated 
A) Net income being understated 
B) An increase in total liabilities 
C) Stockholders' equity being overstated 
D) Total assets being understated

Question 8

For each of the following sentences ,select the word or group of words that best completes the statement.
$$\begin{array} { l l l } 
\text { Matching } & \text { Cash basis } & \text { Measurement } \
\text { Deferred revenue } & \text { Adjustments } & \text { Deferred expense } \
\text { Accrual basis } & \text { Recognition } & \text { Accrued asset }
\end{array}$$
-The basis of accounting that fails to take into consideration amounts earned that are not collected and expenses incurred but are not paid is the _________________________.

Accepted Answer

The answer of For each of the following sentences ,select...

Question 9

Interim financial statements are prepared annually.

Accepted Answer

A) True 
 B)False

Question 10

Jogg Corp.'s plant operates five days per week with a daily payroll of $50,000.Employees are paid every Tuesday for the prior week's work (Monday through Friday).The last day of the month is Tuesday,April 30.What effect does the accrual at April 30 have on Jogg's net income?

Accepted Answer

A) Increase by $250,000 
B) Decrease by $150,000 
C) Decrease by $100,000 
D) Increase by $150,000 
A) Increase by $250,000 
B) Decrease by $150,000 
C) Decrease by $100,000 
D) Increase by $150,000

Question 11

Martinez Produce sells fresh vegetables and fruits in Sutton County.The following unadjusted amounts were taken from the company's accounting records at December 31,2017:
Note Payable,12%,4-month,dated December 1,2017,for $20,000
Note Receivable,10%,6-month,dated October 1,2017,for $12,000
?
 A. Determine the effects on the accounting equation of any adjusting entries that would be necessary at December 31,2017 , for the notes. ?
   ?
 B. Fill in the partial balance sheet below by showing the notes and the effects of any adjustments related to the notes. ?
 $$\begin{array} { | l | l | } 
\hline \text { Current Assets } & \text { Current Liabilities } \
& \
\
\

\hline
\end{array}$$

Accepted Answer

None

Question 12

The revenue recognition principle does not pertain to situations where revenue is recognized over time such as long-term contracts,franchises,commodities,and installment sales.

Accepted Answer

A) True 
 B)False

Question 13

The revenue recognition principle involves two factors: paid and incurred.

Accepted Answer

A) True 
 B)False

Question 14

An asset is always involved when revenue is recognized.

Accepted Answer

A) True 
 B)False

Question 15

What is the matching principle? How does it relate to the revenue recognition process?

Accepted Answer

The matching principle is the associatio

Question 16

The income statement tells the reader about the actual cash inflows during a period of time.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following adjustments increases net income for the period?

Accepted Answer

A) Recognition of the amount of supplies used 
B) Recognition of interest on a note receivable 
C) Recognition of wages earned,but not paid to employees 
D) Recognition of rent costs that had been paid to the landlord in advance 
A) Recognition of the amount of supplies used 
B) Recognition of interest on a note receivable 
C) Recognition of wages earned,but not paid to employees 
D) Recognition of rent costs that had been paid to the landlord in advance

Question 18

Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

Accepted Answer

A) $7,500 
B) $8,750 
C) $15,000 
D) $30,000 
A) $7,500 
B) $8,750 
C) $15,000 
D) $30,000

Question 19

Which one of the following adjustments will increase assets?

Accepted Answer

A) Interest incurred on money borrowed during the period but not yet paid to the bank is accrued. 
B) Rent revenue is recorded for amounts owed by a tenant but not yet paid. 
C) The use of supplies is recorded. 
D) Depreciation for the period is recorded. 
A) Interest incurred on money borrowed during the period but not yet paid to the bank is accrued. 
B) Rent revenue is recorded for amounts owed by a tenant but not yet paid. 
C) The use of supplies is recorded. 
D) Depreciation for the period is recorded.

Question 20

The statement of cash flows reflects the revenues actually earned by the business,regardless of whether cash has been collected.

Accepted Answer

A) True 
 B)False

The process of recording an item in the financial statements is called measurement.

Hsu Company purchased a truck on May 31,2014 for $70,000.The equipment has an estimated useful life of five years.What amount will appear on Hsu Company's balance sheet for total accumulated depreciation at May 31,2017?

Every company prepares only four adjustments-one for each of the four types of adjustments.

Gear Shop purchased supplies at a cost of $1,000 during the year.At January 1,the beginning balance in the Supplies account was $300.At December 31,supplies on hand are $100.Determine supplies expense for the year.

Statements prepared monthly,quarterly,or at other intervals are called

Failure to record dividends paid would result in which of the following?

Interim financial statements are prepared annually.

Jogg Corp.'s plant operates five days per week with a daily payroll of $50,000.Employees are paid every Tuesday for the prior week's work (Monday through Friday).The last day of the month is Tuesday,April 30.What effect does the accrual at April 30 have on Jogg's net income?

The revenue recognition principle does not pertain to situations where revenue is recognized over time such as long-term contracts,franchises,commodities,and installment sales.

The revenue recognition principle involves two factors: paid and incurred.

An asset is always involved when revenue is recognized.

What is the matching principle? How does it relate to the revenue recognition process?

The income statement tells the reader about the actual cash inflows during a period of time.

Which one of the following adjustments increases net income for the period?

Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

Which one of the following adjustments will increase assets?

The statement of cash flows reflects the revenues actually earned by the business,regardless of whether cash has been collected.

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

The process of recording an item in the financial statements is called measurement.

Hsu Company purchased a truck on May 31,2014 for $70,000.The equipment has an estimated useful life of five years.What amount will appear on Hsu Company's balance sheet for total accumulated depreciation at May 31,2017?

Every company prepares only four adjustments-one for each of the four types of adjustments.

Gear Shop purchased supplies at a cost of $1,000 during the year.At January 1,the beginning balance in the Supplies account was $300.At December 31,supplies on hand are $100.Determine supplies expense for the year.

Statements prepared monthly,quarterly,or at other intervals are called

Failure to record dividends paid would result in which of the following?

Interim financial statements are prepared annually.

Jogg Corp.'s plant operates five days per week with a daily payroll of $50,000.Employees are paid every Tuesday for the prior week's work (Monday through Friday).The last day of the month is Tuesday,April 30.What effect does the accrual at April 30 have on Jogg's net income?

The revenue recognition principle does not pertain to situations where revenue is recognized over time such as long-term contracts,franchises,commodities,and installment sales.

The revenue recognition principle involves two factors: paid and incurred.

An asset is always involved when revenue is recognized.

What is the matching principle? How does it relate to the revenue recognition process?

The income statement tells the reader about the actual cash inflows during a period of time.

Which one of the following adjustments increases net income for the period?

Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

Which one of the following adjustments will increase assets?

The statement of cash flows reflects the revenues actually earned by the business,regardless of whether cash has been collected.

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