Question 1

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

Accepted Answer

A) True 
 B)False

Question 2

The fixed asset section of a balance sheet may also be labeled as property,plant,and equipment.

Accepted Answer

A) True 
 B)False

Question 3

Expenses NOT related to the primary operations of the business are sometimes reported as

Accepted Answer

A) administrative expense. 
B) operating expense. 
C) other expense. 
D) all of these. 
A) administrative expense. 
B) operating expense. 
C) other expense. 
D) all of these.

Question 4

Which transaction would be recorded in a cash basis system of accounting?

Accepted Answer

A) Purchase of equipment on credit 
B) Purchase of supplies on credit 
C) Sale of goods on credit 
D) Sale of goods for cash 
A) Purchase of equipment on credit 
B) Purchase of supplies on credit 
C) Sale of goods on credit 
D) Sale of goods for cash

Question 5

Why is a physical count of supplies necessary at the end of the accounting period?

Accepted Answer

The beginning balance in supplies will b

Question 6

Liabilities that will NOT be due for more that one year are called long-term liabilities.

Accepted Answer

A) True 
 B)False

Question 7

Cash and other assets that are expected to be converted to cash or sold or used up within one year or less through the normal operations of the business are called

Accepted Answer

A) current assets. 
B) intangible assets. 
C) fixed assets. 
D) notes receivable. 
A) current assets. 
B) intangible assets. 
C) fixed assets. 
D) notes receivable.

Question 8

-Refer to Coke's balance sheet.Does it appear that Coke uses the cash or accrual basis of accounting?

Accepted Answer

Accrual basis of acc

Question 9

Under the balance sheet classification of property,plant,and equipment,some accounts need adjustment and others do not.Which do and why? Which do NOT and why?

Accepted Answer

Plant and equipment both need an adjustm

Question 10

Refer to Donald Duck Cricket Co.If the month ends on Tuesday,and wages will not be paid until Friday,how much wage expense should be accrued on Tuesday?

Accepted Answer

A) $500 
B) $1,500 
C) $2,500 
D) $1,000 
A) $500 
B) $1,500 
C) $2,500 
D) $1,000

Question 11

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.received $9,000 in advance to provide sausages over the next three months.The June 30 adjustment is:

Accepted Answer

Item: Reve

Question 12

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

Accepted Answer

A) True 
 B)False

Question 13

Current liabilities are usually due within

Accepted Answer

A) one month or less. 
B) one week or less. 
C) one year or less. 
D) more than one year. 
A) one month or less. 
B) one week or less. 
C) one year or less. 
D) more than one year.

Question 14

Depreciation Expense and Accumulated Depreciation are classified,respectively,as

Accepted Answer

A) expense and contra asset. 
B) asset and contra liability. 
C) revenue and asset. 
D) contra asset and expense. 
A) expense and contra asset. 
B) asset and contra liability. 
C) revenue and asset. 
D) contra asset and expense.

Question 15

The accrual basis of accounting requires revenue to be recorded when the service is performed.

Accepted Answer

A) True 
 B)False

Question 16

When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?

Accepted Answer

A) Cash Flow from Operating Activities 
B) Cash Flow from Investing Activities 
C) Cash Flow from Financing Activities 
D) There is no effect on the statement of cash flows. 
A) Cash Flow from Operating Activities 
B) Cash Flow from Investing Activities 
C) Cash Flow from Financing Activities 
D) There is no effect on the statement of cash flows.

Question 17

If land costing $75,000 was sold for $135,000,the amount reported in the investing activities section of the statement of cash flows would be $135,000.

Accepted Answer

A) True 
 B)False

Question 18

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

Accepted Answer

A) Increase Salaries Expense $200 and increase Salaries Payable $200 
B) Increase Salaries Expense $50 and increase Salaries Payable $50 
C) Increase Salaries Payable $200 and increase Cash $200 
D) Increase Salaries Expense $250 and increase Cash $250 
A) Increase Salaries Expense $200 and increase Salaries Payable $200 
B) Increase Salaries Expense $50 and increase Salaries Payable $50 
C) Increase Salaries Payable $200 and increase Cash $200 
D) Increase Salaries Expense $250 and increase Cash $250

Question 19

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 $700 of supplies still remain.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 20

Accrual accounting does NOT require that the accounting records be updated prior to preparing financial statements.

Accepted Answer

A) True 
 B)False

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

The fixed asset section of a balance sheet may also be labeled as property,plant,and equipment.

Expenses NOT related to the primary operations of the business are sometimes reported as

Which transaction would be recorded in a cash basis system of accounting?

Why is a physical count of supplies necessary at the end of the accounting period?

Liabilities that will NOT be due for more that one year are called long-term liabilities.

Cash and other assets that are expected to be converted to cash or sold or used up within one year or less through the normal operations of the business are called

-Refer to Coke's balance sheet.Does it appear that Coke uses the cash or accrual basis of accounting?

Under the balance sheet classification of property,plant,and equipment,some accounts need adjustment and others do not.Which do and why? Which do NOT and why?

Refer to Donald Duck Cricket Co.If the month ends on Tuesday,and wages will not be paid until Friday,how much wage expense should be accrued on Tuesday?

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

Current liabilities are usually due within

Depreciation Expense and Accumulated Depreciation are classified,respectively,as

The accrual basis of accounting requires revenue to be recorded when the service is performed.

When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?

If land costing $75,000 was sold for $135,000,the amount reported in the investing activities section of the statement of cash flows would be $135,000.

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

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 $700 of supplies still remain.What is the balance in the supplies account after adjustment?

Accrual accounting does NOT require that the accounting records be updated prior to preparing financial statements.

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

Exam 3: Accrual Accounting Concepts

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

The fixed asset section of a balance sheet may also be labeled as property,plant,and equipment.

Expenses NOT related to the primary operations of the business are sometimes reported as

Which transaction would be recorded in a cash basis system of accounting?

Why is a physical count of supplies necessary at the end of the accounting period?

Liabilities that will NOT be due for more that one year are called long-term liabilities.

Cash and other assets that are expected to be converted to cash or sold or used up within one year or less through the normal operations of the business are called

-Refer to Coke's balance sheet.Does it appear that Coke uses the cash or accrual basis of accounting?

Under the balance sheet classification of property,plant,and equipment,some accounts need adjustment and others do not.Which do and why? Which do NOT and why?

Refer to Donald Duck Cricket Co.If the month ends on Tuesday,and wages will not be paid until Friday,how much wage expense should be accrued on Tuesday?

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

Current liabilities are usually due within

Depreciation Expense and Accumulated Depreciation are classified,respectively,as

The accrual basis of accounting requires revenue to be recorded when the service is performed.

When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?

If land costing $75,000 was sold for $135,000,the amount reported in the investing activities section of the statement of cash flows would be $135,000.

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

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 $700 of supplies still remain.What is the balance in the supplies account after adjustment?

Accrual accounting does NOT require that the accounting records be updated prior to preparing financial statements.

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