Question 1

Which of the following events would not require a year-end adjusting entry?

Accepted Answer

A) Purchasing supplies for cash during the year. 
B) Paying for one year's rent during the year. 
C) Providing services on account during the year. 
D) Each of these events would require a year-end adjusting entry. 
A) Purchasing supplies for cash during the year. 
B) Paying for one year's rent during the year. 
C) Providing services on account during the year. 
D) Each of these events would require a year-end adjusting entry. C

Question 2

Prior to closing,Syracuse Company's accounting records showed the following balances:
 
After closing,what is the balance of the Retained Earnings account?

Accepted Answer

A) $16,800 
B) $23,700 
C) $21,000 
D) $26,400 
A) $16,800 
B) $23,700 
C) $21,000 
D) $26,400 C

Question 3

How would a payment for rent paid in advance be classified?

Accepted Answer

A) Asset source transaction 
B) Asset use transaction 
C) Asset exchange transaction 
D) Claims exchange transaction 
A) Asset source transaction 
B) Asset use transaction 
C) Asset exchange transaction 
D) Claims exchange transaction C

Question 4

Recognition of depreciation expense is an asset use transaction.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following choices accurately reflects how the recording of accrued salary expense affects the financial statements of a business?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 6

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31,Year 1:
  
-What is the amount of total assets that will be reported on the balance sheet as of December 31,Year 1?

Accepted Answer

A) $12,600 
B) $13,800 
C) $7,200 
D) $10,600 
A) $12,600 
B) $13,800 
C) $7,200 
D) $10,600

Question 7

Adjusting entries never affect a business's cash account.

Accepted Answer

A) True 
 B)False

Question 8

The term "accrual" describes an earnings event that is recognized before cash is received or paid.

Accepted Answer

A) True 
 B)False

Question 9

[The following information applies to the questions displayed below.]
 
Nelson Company experienced the following transactions during Year 1, its first year in operation.

Acquired $12,000 cash by issuing common stock 
Provided $4,600 of services on account 
Paid $3,200 cash for operating expenses 
Collected $3,800 of cash from customers in partial settlement of its accounts receivable 
Paid a $200 cash dividend to stockholders

-What is the amount of net income that will be reported on the Year 1 income statement?

Accepted Answer

A) $1,400 
B) $800 
C) $1,000 
D) $1,200 
A) $1,400 
B) $800 
C) $1,000 
D) $1,200

Question 10

Which of the following types of accounts is not closed at the end of an accounting cycle?

Accepted Answer

A) Revenues 
B) Retained earnings 
C) Dividends 
D) Expenses 
A) Revenues 
B) Retained earnings 
C) Dividends 
D) Expenses

Question 11

On September 1,Year 1,Gomez Company collected $9,000 in advance from a customer for services to be provided over a one-year period beginning on that date.How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31,Year 1? How much would the company report as net cash flows from operating activities for Year 1?

Accepted Answer

A) $3,000;$3,000 
B) $9,000;$9,000 
C) $3,000;$9,000 
D) $0;$9,000 
A) $3,000;$3,000 
B) $9,000;$9,000 
C) $3,000;$9,000 
D) $0;$9,000

Question 12

On January 1,Year 2,the Supplies account of Sheldon Company had a balance of $1,200.During the year,the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts.On December 31,Year 2,Sheldon determined that there were $1,400 of supplies on hand.Which of the following would be reported on Sheldon's Year 2 financial statements?

Accepted Answer

A) $1,600 of supplies;$200 of supplies expense 
B) $1,400 of supplies;$2,000 of supplies expense 
C) $1,400 of supplies;$3,200 of supplies expense 
D) $1,600 of supplies;$3,400 of supplies expense 
A) $1,600 of supplies;$200 of supplies expense 
B) $1,400 of supplies;$2,000 of supplies expense 
C) $1,400 of supplies;$3,200 of supplies expense 
D) $1,600 of supplies;$3,400 of supplies expense

Question 13

What is the purpose of the accrual basis of accounting?

Accepted Answer

A) Recognize revenue when it is collected from customers. 
B) Match assets with liabilities during the proper accounting period. 
C) Recognize expenses when cash disbursements are made. 
D) Recognizing revenue when it is earned and expenses when they are incurred,regardless of when cash changes hands. 
A) Recognize revenue when it is collected from customers. 
B) Match assets with liabilities during the proper accounting period. 
C) Recognize expenses when cash disbursements are made. 
D) Recognizing revenue when it is earned and expenses when they are incurred,regardless of when cash changes hands.

Question 14

Which of the following statements best describes the balance in a revenue account at the beginning of an accounting period?

Accepted Answer

A) Zero 
B) Last period's ending balance 
C) Higher than the previous period's beginning balance 
D) Equal to the amount of retained earnings for the previous period 
A) Zero 
B) Last period's ending balance 
C) Higher than the previous period's beginning balance 
D) Equal to the amount of retained earnings for the previous period

Question 15

The governance of a corporation includes the roles and responsibilities of the board of directors,managers,shareholders,and auditor.

Accepted Answer

A) True 
 B)False

Question 16

The cash payment of interest is classified as a financing activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 17

Revenues and expenses are temporary accounts.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an asset source transaction?

Accepted Answer

A) Issued common stock 
B) Paid a cash dividend to stockholders 
C) Collected cash from customers in settlement of accounts receivable 
D) Accrued salary expense 
A) Issued common stock 
B) Paid a cash dividend to stockholders 
C) Collected cash from customers in settlement of accounts receivable 
D) Accrued salary expense

Question 19

Which of the following statements is true regarding accrual accounting?

Accepted Answer

A) Revenue is recorded only when cash is collected. 
B) Expenses are recorded when they are incurred. 
C) Revenue is recorded in the period when it is earned. 
D) Revenue is recorded in the period when it is earned and expenses are recorded when they are incurred. 
A) Revenue is recorded only when cash is collected. 
B) Expenses are recorded when they are incurred. 
C) Revenue is recorded in the period when it is earned. 
D) Revenue is recorded in the period when it is earned and expenses are recorded when they are incurred.

Question 20

Sometimes the recognition of revenue is accompanied by an increase in liabilities.

Accepted Answer

A) True 
 B)False

Which of the following events would not require a year-end adjusting entry?

Prior to closing,Syracuse Company's accounting records showed the following balances: After closing,what is the balance of the Retained Earnings account?

How would a payment for rent paid in advance be classified?

Recognition of depreciation expense is an asset use transaction.

Which of the following choices accurately reflects how the recording of accrued salary expense affects the financial statements of a business?

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31,Year 1: -What is the amount of total assets that will be reported on the balance sheet as of December 31,Year 1?

Adjusting entries never affect a business's cash account.

The term "accrual" describes an earnings event that is recognized before cash is received or paid.

Which of the following types of accounts is not closed at the end of an accounting cycle?

What is the purpose of the accrual basis of accounting?

Which of the following statements best describes the balance in a revenue account at the beginning of an accounting period?

The governance of a corporation includes the roles and responsibilities of the board of directors,managers,shareholders,and auditor.

The cash payment of interest is classified as a financing activity on the statement of cash flows.

Revenues and expenses are temporary accounts.

Which of the following is an asset source transaction?

Which of the following statements is true regarding accrual accounting?

Sometimes the recognition of revenue is accompanied by an increase in liabilities.

An Introduction to Accounting

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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Exam 2: Accounting for Accruals and Deferrals

Which of the following events would not require a year-end adjusting entry?

Prior to closing,Syracuse Company's accounting records showed the following balances: After closing,what is the balance of the Retained Earnings account?

How would a payment for rent paid in advance be classified?

Recognition of depreciation expense is an asset use transaction.

Which of the following choices accurately reflects how the recording of accrued salary expense affects the financial statements of a business?

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31,Year 1: -What is the amount of total assets that will be reported on the balance sheet as of December 31,Year 1?

Adjusting entries never affect a business's cash account.

The term "accrual" describes an earnings event that is recognized before cash is received or paid.

Which of the following types of accounts is not closed at the end of an accounting cycle?

What is the purpose of the accrual basis of accounting?

Which of the following statements best describes the balance in a revenue account at the beginning of an accounting period?

The governance of a corporation includes the roles and responsibilities of the board of directors,managers,shareholders,and auditor.

The cash payment of interest is classified as a financing activity on the statement of cash flows.

Revenues and expenses are temporary accounts.

Which of the following is an asset source transaction?

Which of the following statements is true regarding accrual accounting?

Sometimes the recognition of revenue is accompanied by an increase in liabilities.

An Introduction to Accounting

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

Filters