Exam 2: Accounting for Accruals and Deferrals

Revenue on account amounted to $5,000.Cash collections of accounts receivable amounted to $2,300.Expenses for the period were $2,100.The company paid dividends of $450.What was net income for the period?

If a company provides services to clients but has not yet collected any cash,how should that transaction be classified?

Revenue on account amounted to $9,000.Cash collections of accounts receivable amounted to $8,100.Cash paid for operating expenses was $7,500.The amount of employee salaries accrued at the end of the year was $900.What was the net cash flow from operating activities?

Which of the following describes the effects of a claims exchange transaction on a company's financial statements?

Which of the following adjustments would not be described as an accrual?

Companies that use accrual accounting recognize revenues and expenses at the time that cash is received or paid,respectively.

On October 1,Year 1,Jason Company paid $7,200 to lease office space for one year beginning immediately.What is the amount of rent expense that will be reported on the Year 1 income statement and what is the cash outflow for rent that would be reported on the Year 1 statement of cash flows?

Accounts that are closed include expenses,dividends,and unearned revenues.

Consider how each of the transactions listed below affect net income reported on the income statement and the net cash flows from operating activities reported on the statement of cash flows.Which transaction(s)would affect the income statement in a different period from the statement of cash flows?

After closing,what is the balance of the Retained Earnings account on December 31,Year 1?

An increase in an expense may be accompanied by a decrease in a liability.

Which of the following is not a principle of the AICPA Code of Professional Conduct?

If retained earnings decreased during the year,and no dividends were paid,which of the following statements must be true?

Which of the following correctly states the proper order of the steps in the accounting cycle?

After the closing process,all income statement accounts have balances that carry forward into the next accounting period.

Recognition of revenue may be accompanied by which of the following?

Duluth Co.collected a $6,000 cash advance from a customer on November 1,Year 1 for services to be provided over a six-month period beginning on that date.If the year-end adjustment is properly recorded,what will be the effect of the adjusting entry on Duluth's Year 1 financial statements?

What is the term used to describe the policies and procedures that are designed to reduce the opportunities for fraud?

The term "recognition" means to report an economic event in the financial statements.

[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 total assets that will be reported on the balance sheet as of December 31,Year 1?