Question 1

In October,cash is received in advance of rendering services.Assuming that half of the services have been performed by December 31,the year-end adjustment would

Accepted Answer

A) decrease Unearned Service Revenue and decrease Cash. 
B) increase Accounts Receivable and increase Service Revenue. 
C) increase Cash and increase Service Revenue. 
D) decrease Unearned Service Revenue and increase Service Revenue. 
A) decrease Unearned Service Revenue and decrease Cash. 
B) increase Accounts Receivable and increase Service Revenue. 
C) increase Cash and increase Service Revenue. 
D) decrease Unearned Service Revenue and increase Service Revenue. D

Question 2

Fees receivable would appear on the balance sheet as a(n)

Accepted Answer

A) asset. 
B) liability. 
C) fixed asset. 
D) unearned revenue. 
A) asset. 
B) liability. 
C) fixed asset. 
D) unearned revenue. A

Question 3

The net income reported on the income statement for the current year was $310,000.Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000,respectively.Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:
 
What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Accepted Answer

A) $233,000 
B) $289,000 
C) $387,000 
D) $331,000 
A) $233,000 
B) $289,000 
C) $387,000 
D) $331,000 D

Question 4

Which of the following accounts would likely be included in a deferral adjusting entry?

Accepted Answer

A) Interest Revenue 
B) Unearned Revenue 
C) Salaries Payable 
D) Accounts Receivable 
A) Interest Revenue 
B) Unearned Revenue 
C) Salaries Payable 
D) Accounts Receivable

Question 5

On June 1,Green Pea,Inc.purchased $1,200 worth of supplies on account.Prior to the purchase,the balance in the supplies account was $0.On December 31,the fiscal year-end for Green Pea,it is determined that $500 of supplies have been used up.What is the balance in the supplies account after adjustment?

Accepted Answer

A) $0 
B) $700 
C) $500 
D) $1,200 
A) $0 
B) $700 
C) $500 
D) $1,200

Question 6

Describe deferrals and accruals.

Accepted Answer

Deferrals are created by recording a tra

Question 7

"Brand name" recognition is an example of goodwill.

Accepted Answer

A) True 
 B)False

Question 8

CASE  
-Refer to Coke's Statement of Cash Flows.What amount od depreciation and amortizatin did Coke record in 2008?

Accepted Answer

Coke recorded depreciation and

Question 9

Describe the differences between the cash and accrual bases of accounting.

Accepted Answer

Under the cash basis of accounting,trans

Question 10

A&M Co.purchased land for $50,000 with $10,000 paid in cash and $40,000 in a note payable due three years from now.What effect does this transaction have on the accounts under the accrual basis of accounting?

Accepted Answer

A) Net increase in assets of $40,000 and a net increase in liabilities of $40,000 
B) Net increase in assets and liabilities of $50,000 
C) Net increase in assets of $50,000 and a net decrease in liabilities of $40,000 
D) Net increase in assets of $60,000 and a net decrease in liabilities of $40,000 
A) Net increase in assets of $40,000 and a net increase in liabilities of $40,000 
B) Net increase in assets and liabilities of $50,000 
C) Net increase in assets of $50,000 and a net decrease in liabilities of $40,000 
D) Net increase in assets of $60,000 and a net decrease in liabilities of $40,000

Question 11

Accumulated depreciation is __________ to get the carrying value.

Accepted Answer

A) added to equipment 
B) subtracted from equipment 
C) added to accounts payable 
D) subtracted from accounts payable 
A) added to equipment 
B) subtracted from equipment 
C) added to accounts payable 
D) subtracted from accounts payable

Question 12

On the statement of cash flows,the cash flows from operating activities section would include

Accepted Answer

A) receipts from the issuance of capital stock. 
B) receipts from the sale of investments. 
C) payments for the acquisition of investments. 
D) cash receipts from sales activities. 
A) receipts from the issuance of capital stock. 
B) receipts from the sale of investments. 
C) payments for the acquisition of investments. 
D) cash receipts from sales activities.

Question 13

Deferred expenses (prepaid expenses)are items initially recorded as assets but are expected to become __________ over time.

Accepted Answer

A) liabilities 
B) assets 
C) stockholders' equity 
D) expenses 
A) liabilities 
B) assets 
C) stockholders' equity 
D) expenses

Question 14

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

Accepted Answer

A) deducted from net income in converting the net income reported on the income statement to cash flows from operating activities. 
B) added to net income in converting the net income reported on the income statement to cash flows from operating activities. 
C) added to cash received from the sale to determine cash flows from investing activities. 
D) deducted from cash received from the sale to determine cash flows from investing activities. 
A) deducted from net income in converting the net income reported on the income statement to cash flows from operating activities. 
B) added to net income in converting the net income reported on the income statement to cash flows from operating activities. 
C) added to cash received from the sale to determine cash flows from investing activities. 
D) deducted from cash received from the sale to determine cash flows from investing activities.

Question 15

The __________ is prepared with various sections,subsections,and captions that aid in its interpretation and analysis.

Accepted Answer

A) accounting equation 
B) retained earnings statement 
C) intangible asset section 
D) classified balance sheet 
A) accounting equation 
B) retained earnings statement 
C) intangible asset section 
D) classified balance sheet

Question 16

__________ is/are created when a revenue or expense has NOT been recorded by the end of the accounting period.

Accepted Answer

A) Prepaid advertising 
B) Premiums received in advance 
C) Unearned revenue 
D) Accruals 
A) Prepaid advertising 
B) Premiums received in advance 
C) Unearned revenue 
D) Accruals

Question 17

Identify the type of adjustment necessary (the type of item involved)and record the transaction for the event.Make sure to include the ending balances after adjustment.
Assume that on June 1,2010,Tasty Sausage Corp.paid $100 for supplies.On June 6 it purchased $600 in supplies for cash.On June 30,at the end of the accounting period,there are $300 of supplies on hand.The June 30 adjustment is:

Accepted Answer

Item: Expe

Question 18

Which of the following should be shown on a statement of cash flows under the financing activity section?

Accepted Answer

A) The purchase of a long-term investment in the common stock of another company 
B) The payment of cash to retire a long-term note 
C) The proceeds from the sale of a building 
D) The issuance of a long-term note to acquire land 
A) The purchase of a long-term investment in the common stock of another company 
B) The payment of cash to retire a long-term note 
C) The proceeds from the sale of a building 
D) The issuance of a long-term note to acquire land

Question 19

Rights that are short-term in nature are called intangible assets.

Accepted Answer

A) True 
 B)False

Question 20

For a corporation,stockholders' equity consists of

Accepted Answer

A) assets plus liabilities. 
B) current assets plus long-term assets. 
C) intangible assets. 
D) capital stock and retained earnings. 
A) assets plus liabilities. 
B) current assets plus long-term assets. 
C) intangible assets. 
D) capital stock and retained earnings.

In October,cash is received in advance of rendering services.Assuming that half of the services have been performed by December 31,the year-end adjustment would

Fees receivable would appear on the balance sheet as a(n)

Which of the following accounts would likely be included in a deferral adjusting entry?

Describe deferrals and accruals.

"Brand name" recognition is an example of goodwill.

CASE -Refer to Coke's Statement of Cash Flows.What amount od depreciation and amortizatin did Coke record in 2008?

Describe the differences between the cash and accrual bases of accounting.

A&M Co.purchased land for $50,000 with $10,000 paid in cash and $40,000 in a note payable due three years from now.What effect does this transaction have on the accounts under the accrual basis of accounting?

Accumulated depreciation is __________ to get the carrying value.

On the statement of cash flows,the cash flows from operating activities section would include

Deferred expenses (prepaid expenses)are items initially recorded as assets but are expected to become __________ over time.

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

The __________ is prepared with various sections,subsections,and captions that aid in its interpretation and analysis.

__________ is/are created when a revenue or expense has NOT been recorded by the end of the accounting period.

Which of the following should be shown on a statement of cash flows under the financing activity section?

Rights that are short-term in nature are called intangible assets.

For a corporation,stockholders' equity consists of

The Role of Accounting in Business

Basic Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 3: Accrual Accounting Concepts

In October,cash is received in advance of rendering services.Assuming that half of the services have been performed by December 31,the year-end adjustment would

Fees receivable would appear on the balance sheet as a(n)

Which of the following accounts would likely be included in a deferral adjusting entry?

Describe deferrals and accruals.

"Brand name" recognition is an example of goodwill.

CASE -Refer to Coke's Statement of Cash Flows.What amount od depreciation and amortizatin did Coke record in 2008?

Describe the differences between the cash and accrual bases of accounting.

A&M Co.purchased land for $50,000 with $10,000 paid in cash and $40,000 in a note payable due three years from now.What effect does this transaction have on the accounts under the accrual basis of accounting?

Accumulated depreciation is __________ to get the carrying value.

On the statement of cash flows,the cash flows from operating activities section would include

Deferred expenses (prepaid expenses)are items initially recorded as assets but are expected to become __________ over time.

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

The __________ is prepared with various sections,subsections,and captions that aid in its interpretation and analysis.

__________ is/are created when a revenue or expense has NOT been recorded by the end of the accounting period.

Which of the following should be shown on a statement of cash flows under the financing activity section?

Rights that are short-term in nature are called intangible assets.

For a corporation,stockholders' equity consists of

The Role of Accounting in Business

Basic Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters