Question 1

To help keep debt ratios within normal limits,companies might adopt the following strategy:

Accepted Answer

A) decrease revenues. 
B) sell stock. 
C) choose to borrow more money. 
D) increase costs. 
A) decrease revenues. 
B) sell stock. 
C) choose to borrow more money. 
D) increase costs.

Question 2

When preparing the balance sheet,the final balancing element of the balance sheet is:

Accepted Answer

A) Cash. 
B) Net income. 
C) Retained earnings. 
D) Dividends. 
A) Cash. 
B) Net income. 
C) Retained earnings. 
D) Dividends.

Question 3

A CPA prepares tax returns for clients and bills them after the work is completed.It usually takes two weeks of work to prepare the tax returns.It takes 30 days on average to receive payment from the clients.The CPA uses cash-basis accounting.The revenue should be recorded when the CPA:

Accepted Answer

A) starts working on the tax returns. 
B) completes working on the tax returns. 
C) bills the clients. 
D) receives payments from the clients. 
A) starts working on the tax returns. 
B) completes working on the tax returns. 
C) bills the clients. 
D) receives payments from the clients.

Question 4

In lieu of using the Trial Balance Worksheet to prepare the financial statements,an accountant can use the:

Accepted Answer

A) journal. 
B) ledger. 
C) prior period financial statements. 
D) prior period audit report. 
A) journal. 
B) ledger. 
C) prior period financial statements. 
D) prior period audit report.

Question 5

A classified balance sheet separates current assets from long-term assets and current liabilities from long-term liabilities.

Accepted Answer

A) True 
 B)False

Question 6

Describe the process of closing the books at the end of the accounting period.

Accepted Answer

Closing the books is the process of prep

Question 7

A journal entry contains a debit to a liability account and a credit to a revenue account.This is an example of a(n):

Accepted Answer

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

Question 8

Operating income reflects:

Accepted Answer

A) income from a company's main and secondary business activities. 
B) earnings from a company's core business activities. 
C) earnings from a company 's core business activities which includes interest income. 
D) an important measure that investors to use to evaluate the liquidity of the business. 
A) income from a company's main and secondary business activities. 
B) earnings from a company's core business activities. 
C) earnings from a company 's core business activities which includes interest income. 
D) an important measure that investors to use to evaluate the liquidity of the business.

Question 9

Since accrual accounting follows the revenue principle and the expense recognition principle,all ethical challenges are avoided.

Accepted Answer

A) True 
 B)False

Question 10

On a classified balance sheet:

Accepted Answer

A) Accounts Receivable is a current liability. 
B) Salaries Payable is a long-term liability. 
C) Notes Payable due in one year is a current liability. 
D) Dividends is a current asset. 
A) Accounts Receivable is a current liability. 
B) Salaries Payable is a long-term liability. 
C) Notes Payable due in one year is a current liability. 
D) Dividends is a current asset.

Question 11

The book value of a plant asset is the:

Accepted Answer

A) accumulated depreciation less the cost of the asset. 
B) cost of the asset. 
C) balance in the accumulated depreciation account. 
D) cost of the asset less the accumulated depreciation. 
A) accumulated depreciation less the cost of the asset. 
B) cost of the asset. 
C) balance in the accumulated depreciation account. 
D) cost of the asset less the accumulated depreciation.

Question 12

The books need to be closed in order to prepare the accounts for the next period's transactions.

Accepted Answer

A) True 
 B)False

Question 13

________ will be increased when a company receives cash before performing the services.

Accepted Answer

A) Service Revenue 
B) Accumulated Depreciation 
C) Unearned Service Revenue 
D) Accrued Salaries Payable 
A) Service Revenue 
B) Accumulated Depreciation 
C) Unearned Service Revenue 
D) Accrued Salaries Payable

Question 14

The adjusted trial balance is used to prepare:

Accepted Answer

A) the balance sheet and the income statement only. 
B) balance sheet,income statement,and statement of retained earnings. 
C) the balance sheet only. 
D) the income statement only. 
A) the balance sheet and the income statement only. 
B) balance sheet,income statement,and statement of retained earnings. 
C) the balance sheet only. 
D) the income statement only.

Question 15

An accrual is an adjustment for the receipt of cash in advance of providing services.

Accepted Answer

A) True 
 B)False

Question 16

The adjustment for an accrued expense:

Accepted Answer

A) increases expenses and decreases assets. 
B) increases expenses and increases liabilities. 
C) decreases expenses and increases liabilities. 
D) decreases expenses and increases assets. 
A) increases expenses and decreases assets. 
B) increases expenses and increases liabilities. 
C) decreases expenses and increases liabilities. 
D) decreases expenses and increases assets.

Question 17

A doctor performed surgery in March and did not receive cash from the patient until July.Under accrual accounting,the doctor recognizes revenue:

Accepted Answer

A) in March. 
B) in July. 
C) in either March or July. 
D) at a time that cannot be determined from the facts. 
A) in March. 
B) in July. 
C) in either March or July. 
D) at a time that cannot be determined from the facts.

Question 18

Every adjusting entry must affect both the income statement and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

The amount of prepaid insurance that is used up during a period of time is recorded as Insurance Expense.

Accepted Answer

A) True 
 B)False

Question 20

Lori's Bath Supplies has the following Adjusted Trial Balance as of March 31,2019.Determine the debt ratio.Round your answer to four decimal places.

Accepted Answer

The answer of Lori's Bath Supplies has the following Adjusted...

To help keep debt ratios within normal limits,companies might adopt the following strategy:

When preparing the balance sheet,the final balancing element of the balance sheet is:

A CPA prepares tax returns for clients and bills them after the work is completed.It usually takes two weeks of work to prepare the tax returns.It takes 30 days on average to receive payment from the clients.The CPA uses cash-basis accounting.The revenue should be recorded when the CPA:

In lieu of using the Trial Balance Worksheet to prepare the financial statements,an accountant can use the:

A classified balance sheet separates current assets from long-term assets and current liabilities from long-term liabilities.

Describe the process of closing the books at the end of the accounting period.

A journal entry contains a debit to a liability account and a credit to a revenue account.This is an example of a(n):

Operating income reflects:

Since accrual accounting follows the revenue principle and the expense recognition principle,all ethical challenges are avoided.

On a classified balance sheet:

The book value of a plant asset is the:

The books need to be closed in order to prepare the accounts for the next period's transactions.

________ will be increased when a company receives cash before performing the services.

The adjusted trial balance is used to prepare:

An accrual is an adjustment for the receipt of cash in advance of providing services.

The adjustment for an accrued expense:

A doctor performed surgery in March and did not receive cash from the patient until July.Under accrual accounting,the doctor recognizes revenue:

Every adjusting entry must affect both the income statement and the balance sheet.

The amount of prepaid insurance that is used up during a period of time is recorded as Insurance Expense.

Lori's Bath Supplies has the following Adjusted Trial Balance as of March 31,2019.Determine the debt ratio.Round your answer to four decimal places.

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

To help keep debt ratios within normal limits,companies might adopt the following strategy:

When preparing the balance sheet,the final balancing element of the balance sheet is:

A CPA prepares tax returns for clients and bills them after the work is completed.It usually takes two weeks of work to prepare the tax returns.It takes 30 days on average to receive payment from the clients.The CPA uses cash-basis accounting.The revenue should be recorded when the CPA:

In lieu of using the Trial Balance Worksheet to prepare the financial statements,an accountant can use the:

A classified balance sheet separates current assets from long-term assets and current liabilities from long-term liabilities.

Describe the process of closing the books at the end of the accounting period.

A journal entry contains a debit to a liability account and a credit to a revenue account.This is an example of a(n):

Operating income reflects:

Since accrual accounting follows the revenue principle and the expense recognition principle,all ethical challenges are avoided.

On a classified balance sheet:

The book value of a plant asset is the:

The books need to be closed in order to prepare the accounts for the next period's transactions.

________ will be increased when a company receives cash before performing the services.

The adjusted trial balance is used to prepare:

An accrual is an adjustment for the receipt of cash in advance of providing services.

The adjustment for an accrued expense:

A doctor performed surgery in March and did not receive cash from the patient until July.Under accrual accounting,the doctor recognizes revenue:

Every adjusting entry must affect both the income statement and the balance sheet.

The amount of prepaid insurance that is used up during a period of time is recorded as Insurance Expense.

Lori's Bath Supplies has the following Adjusted Trial Balance as of March 31,2019.Determine the debt ratio.Round your answer to four decimal places.

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