Question 1

Define the following terms:

Accepted Answer

The answer of Define the following terms:
  ...

Question 2

Net working capital:

Accepted Answer

A) represents the company's ability to pay its long-term debts. 
B) is computed by subtracting total current liabilities from total current assets. 
C) should be a negative number to ensure the profitability of the company. 
D) should be the same for all companies. 
A) represents the company's ability to pay its long-term debts. 
B) is computed by subtracting total current liabilities from total current assets. 
C) should be a negative number to ensure the profitability of the company. 
D) should be the same for all companies.

Question 3

A Trial Balance Worksheet lists:

Accepted Answer

A) balance sheet accounts only. 
B) income statement accounts only. 
C) Retained earnings at the beginning of the accounting period and dividends declared. 
D) all of the above. 
A) balance sheet accounts only. 
B) income statement accounts only. 
C) Retained earnings at the beginning of the accounting period and dividends declared. 
D) all of the above.

Question 4

Accrual accounting records the impact of both cash and noncash business transactions as they occur.

Accepted Answer

A) True 
 B)False

Question 5

Operating income reflects the earnings from the company's core business.

Accepted Answer

A) True 
 B)False

Question 6

The entry to close Service Revenue includes a debit to:

Accepted Answer

A) Retained Earnings and a credit to Service Revenue. 
B) Service Revenue and a credit to Retained Earnings. 
C) Service Revenue and a credit to Stockholders' Equity. 
D) Service Revenue and a credit to Net Income. 
A) Retained Earnings and a credit to Service Revenue. 
B) Service Revenue and a credit to Retained Earnings. 
C) Service Revenue and a credit to Stockholders' Equity. 
D) Service Revenue and a credit to Net Income.

Question 7

Generally to be considered sufficiently liquid,entities should have a sufficient excess of current liabilities over current assets.

Accepted Answer

A) True 
 B)False

Question 8

The time-period concept ensures that the accounting information is reported in the financial statements on a monthly basis.

Accepted Answer

A) True 
 B)False

Question 9

The Schauer Company had the following adjustments at December 31,2019,the end of the accounting period:
A.The Schauer Company uses straight-line depreciation for its equipment.The cost of the equipment is $105,000 and the useful life is 5 years.The equipment was purchased on January 1,2019 and has no residual value.
B.Accrued interest of $10,000 on a note receivable will be received in January.
C.On November 1,2019,the Schauer Company paid $3,000 for six months of rent in advance.The rental period is November 1,2019 through April 30,2020.
D.On August 1,2019,the company collected $24,000 in advance for a consulting contract,which is to be earned evenly over the next 24 months.
E.Employees are owed salaries for 3 days of a 5-day workweek;weekly payroll is $30,000.
F.The unadjusted balance of the supplies account is $2,750.Based on a physical count,the cost of supplies on hand is $1,000.
G.The company has incurred interest expense of $1,000 that will be paid in January.
Required:
1.Journalize the adjusting entries.Explanations are not required.
2.Assuming the adjustments were not made,calculate the net overstatement or understatement this would have on net income.Would the company appear to be more or less profitable if the adjustments were not made?

Accepted Answer

The answer of The Schauer Company had the following adjustments...

Question 10

On December 1 of the current year,Prepaid Rent was debited $10,200 for three months of rent,to cover the period December 1 to February 28.The amount of the adjusting entry on December 31 is:

Accepted Answer

A) $0. 
B) $3,400. 
C) $6,800. 
D) $10,200. 
A) $0. 
B) $3,400. 
C) $6,800. 
D) $10,200.

Question 11

Under the revenue recognition principle,you can recognize revenue before you earn it.

Accepted Answer

A) True 
 B)False

Question 12

For the year ended,December 31,2019,the Aldrich Chemical Company omitted the following adjusting journal entries in error.For each entry,indicate if net income will be overstated or understated by placing an "X" in the appropriate box.

Accepted Answer

The answer of For the year ended,December 31,2019,the Aldrich Chemical...

Question 13

Some accounts do not need to be adjusted at the end of the period,since the day-to-day transactions provide all the data for these accounts.

Accepted Answer

A) True 
 B)False

Question 14

The following accounts and balances are taken from Martin Company's adjusted trial balance:   In the closing process,which accounts are credited?

Accepted Answer

A) Accounts Payable,Prepaid Insurance 
B) Service Revenue,Interest Revenue 
C) Depreciation Expense,Insurance Expense,Salary Expense 
D) Accumulated Depreciation,Insurance Expense,Salary Expense,Dividends 
A) Accounts Payable,Prepaid Insurance 
B) Service Revenue,Interest Revenue 
C) Depreciation Expense,Insurance Expense,Salary Expense 
D) Accumulated Depreciation,Insurance Expense,Salary Expense,Dividends

Question 15

Adjusting entries:

Accepted Answer

A) close the revenue accounts. 
B) close the expense accounts. 
C) adjust Cash. 
D) adjust Unearned Revenue. 
A) close the revenue accounts. 
B) close the expense accounts. 
C) adjust Cash. 
D) adjust Unearned Revenue.

Question 16

________ will not be found on the statement of retained earnings.

Accepted Answer

A) Net income 
B) Dividends 
C) Cash 
D) Net loss 
A) Net income 
B) Dividends 
C) Cash 
D) Net loss

Question 17

An adjusting journal entry contains a debit to an expense account and a credit to a contra account.This is an example of a(n):

Accepted Answer

A) accrued revenue. 
B) deferred revenue. 
C) depreciation expense. 
D) accrued expense. 
A) accrued revenue. 
B) deferred revenue. 
C) depreciation expense. 
D) accrued expense.

Question 18

Barker Enterprises paid $30,000 cash for a new auto on January 1,2018,the first day of its fiscal year.The auto is expected to remain useful for six years.At the end of six years,the auto's value is expected to be zero.Accounts are adjusted only on the last day of the fiscal year.
Make the journal entries for January 1,2018 and for December 31,2018.Omit explanations.

Accepted Answer

The answer of Barker Enterprises paid $30,000 cash for a...

Question 19

A doctor performed surgery in April and did not receive cash payment from the patient until August.Under cash-basis accounting,the doctor recognizes revenue:

Accepted Answer

A) in April. 
B) in August. 
C) in April or August. 
D) at a time that cannot be determined from the facts. 
A) in April. 
B) in August. 
C) in April or August. 
D) at a time that cannot be determined from the facts.

Question 20

An expense occurred in 2018,but it is not paid until 2019.Using accrual accounting,the expense should appear on:

Accepted Answer

A) the 2018 income statement. 
B) the 2019 income statement. 
C) whichever income statement the business prefers. 
D) both the 2018 and 2019 income statements. 
A) the 2018 income statement. 
B) the 2019 income statement. 
C) whichever income statement the business prefers. 
D) both the 2018 and 2019 income statements.

Define the following terms:

Net working capital:

A Trial Balance Worksheet lists:

Accrual accounting records the impact of both cash and noncash business transactions as they occur.

Operating income reflects the earnings from the company's core business.

The entry to close Service Revenue includes a debit to:

Generally to be considered sufficiently liquid,entities should have a sufficient excess of current liabilities over current assets.

The time-period concept ensures that the accounting information is reported in the financial statements on a monthly basis.

On December 1 of the current year,Prepaid Rent was debited $10,200 for three months of rent,to cover the period December 1 to February 28.The amount of the adjusting entry on December 31 is:

Under the revenue recognition principle,you can recognize revenue before you earn it.

For the year ended,December 31,2019,the Aldrich Chemical Company omitted the following adjusting journal entries in error.For each entry,indicate if net income will be overstated or understated by placing an "X" in the appropriate box.

Some accounts do not need to be adjusted at the end of the period,since the day-to-day transactions provide all the data for these accounts.

The following accounts and balances are taken from Martin Company's adjusted trial balance: In the closing process,which accounts are credited?

Adjusting entries:

________ will not be found on the statement of retained earnings.

An adjusting journal entry contains a debit to an expense account and a credit to a contra account.This is an example of a(n):

A doctor performed surgery in April and did not receive cash payment from the patient until August.Under cash-basis accounting,the doctor recognizes revenue:

An expense occurred in 2018,but it is not paid until 2019.Using accrual accounting,the expense should appear on:

The Financial Statements

Transaction Analysis

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 3: Accrual Accounting Income

Define the following terms:

Net working capital:

A Trial Balance Worksheet lists:

Accrual accounting records the impact of both cash and noncash business transactions as they occur.

Operating income reflects the earnings from the company's core business.

The entry to close Service Revenue includes a debit to:

Generally to be considered sufficiently liquid,entities should have a sufficient excess of current liabilities over current assets.

The time-period concept ensures that the accounting information is reported in the financial statements on a monthly basis.

On December 1 of the current year,Prepaid Rent was debited $10,200 for three months of rent,to cover the period December 1 to February 28.The amount of the adjusting entry on December 31 is:

Under the revenue recognition principle,you can recognize revenue before you earn it.

For the year ended,December 31,2019,the Aldrich Chemical Company omitted the following adjusting journal entries in error.For each entry,indicate if net income will be overstated or understated by placing an "X" in the appropriate box.

Some accounts do not need to be adjusted at the end of the period,since the day-to-day transactions provide all the data for these accounts.

The following accounts and balances are taken from Martin Company's adjusted trial balance: In the closing process,which accounts are credited?

Adjusting entries:

________ will not be found on the statement of retained earnings.

An adjusting journal entry contains a debit to an expense account and a credit to a contra account.This is an example of a(n):

A doctor performed surgery in April and did not receive cash payment from the patient until August.Under cash-basis accounting,the doctor recognizes revenue:

An expense occurred in 2018,but it is not paid until 2019.Using accrual accounting,the expense should appear on:

The Financial Statements

Transaction Analysis

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters