Question 1

Retailers often end their fiscal years .

Accepted Answer

A) during the slack season. 
B) during the peak of the busy season. 
C) at different times each year,depending on the tax consequences. 
D) on June 30. 
A) during the slack season. 
B) during the peak of the busy season. 
C) at different times each year,depending on the tax consequences. 
D) on June 30.

Question 2

Failure to adjust for expired prepaid insurance at year end will result in an

Accepted Answer

A) overstatement of liabilities. 
B) understatement of assets. 
C) understatement of stockholders' equity. 
D) overstatement of net income. 
A) overstatement of liabilities. 
B) understatement of assets. 
C) understatement of stockholders' equity. 
D) overstatement of net income.

Question 3

When a credit sale takes place,

Accepted Answer

A) a revenue account will increase. 
B) liabilities will increase. 
C) one asset account will increase and another will decrease. 
D) assets will be unaffected. 
A) a revenue account will increase. 
B) liabilities will increase. 
C) one asset account will increase and another will decrease. 
D) assets will be unaffected.

Question 4

Which of the following accounts would likely not need to be adjusted at year end?

Accepted Answer

A) Equipment 
B) Prepaid Insurance 
C) Supplies 
D) Common Stock 
A) Equipment 
B) Prepaid Insurance 
C) Supplies 
D) Common Stock

Question 5

Net income can be used to assess a company's progress in meeting the goal of profitability.

Accepted Answer

A) True 
 B)False

Question 6

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

Accepted Answer

Net income is determined by subtracting

Question 7

The following amounts are taken from the balance sheets of Baltic Company:
  During 20x5,expenses related to accrued liabilities were $15,250,and expenses related to prepaid expenses were $10,500.
a.Compute cash payments related to accrued liabilities.
b.Compute cash payments related to prepaid expenses.

Accepted Answer

a.$12,000 ($18,750 +

Question 8

Which of the following accounts is a contra account?

Accepted Answer

A) Accumulated Depreciation-Office Furniture 
B) Interest Payable 
C) Depreciation Expense-Office Furniture 
D) Unearned Revenue 
A) Accumulated Depreciation-Office Furniture 
B) Interest Payable 
C) Depreciation Expense-Office Furniture 
D) Unearned Revenue

Question 9

Which of the following is an example of an accrual?

Accepted Answer

A) Debit Office Supplies Expense,credit Office Supplies 
B) Debit Wages Expense,credit Wages Payable 
C) Debit Rent Expense,credit Prepaid Rent 
D) Debit Unearned Revenue,credit Service Revenue 
A) Debit Office Supplies Expense,credit Office Supplies 
B) Debit Wages Expense,credit Wages Payable 
C) Debit Rent Expense,credit Prepaid Rent 
D) Debit Unearned Revenue,credit Service Revenue

Question 10

Which of the following accounts would not need to be adjusted at year end?

Accepted Answer

A) Prepaid Rent. 
B) Common Stock. 
C) Equipment. 
D) Unearned Rent Revenue. 
A) Prepaid Rent. 
B) Common Stock. 
C) Equipment. 
D) Unearned Rent Revenue.

Question 11

Financial statement time periods should be of equal length

Accepted Answer

A) and should end during the peak season. 
B) to make comparison easier. 
C) and should correspond to the calendar year. 
D) to comply with income tax regulations. 
A) and should end during the peak season. 
B) to make comparison easier. 
C) and should correspond to the calendar year. 
D) to comply with income tax regulations.

Question 12

As an asset's depreciation is recorded,its carrying value decreases.

Accepted Answer

A) True 
 B)False

Question 13

The following amounts are taken from the balance sheets of Candy Cane Enterprises:
  During 20x5,expenses related to prepaid expenses were $206,000,and expenses related to accrued liabilities were $394,000.Determine the amount of cash payments related to prepaid expenses and to accrued liabilities for 20x5.

Accepted Answer

The answer of The following amounts are taken from the...

Question 14

Which of the following situations does not involve an accrual?

Accepted Answer

A) Recording accrued interest. 
B) Recording depreciation. 
C) Recording unrecorded wages. 
D) Recording unrecorded revenue. 
A) Recording accrued interest. 
B) Recording depreciation. 
C) Recording unrecorded wages. 
D) Recording unrecorded revenue.

Question 15

A company recorded office supplies in an asset account when the supplies were purchased.Failure to take inventory and make an adjusting entry will result in an

Accepted Answer

A) understatement of liabilities. 
B) understatement of stockholders' equity. 
C) understatement of assets. 
D) overstatement of stockholders' equity. 
A) understatement of liabilities. 
B) understatement of stockholders' equity. 
C) understatement of assets. 
D) overstatement of stockholders' equity.

Question 16

Adjusting entries are useful in allocating costs among two or more accounting periods.

Accepted Answer

A) True 
 B)False

Question 17

One application of accrual accounting is adjusting the accounts.

Accepted Answer

A) True 
 B)False

Question 18

Net income

Accepted Answer

A) is accumulated in Retained Earnings. 
B) is reported on the income statement. 
C) occurs when revenues exceed expenses. 
D) All of these choices. 
A) is accumulated in Retained Earnings. 
B) is reported on the income statement. 
C) occurs when revenues exceed expenses. 
D) All of these choices.

Question 19

How and why is the matching rule applied to the cost of a building?

Accepted Answer

The matching rule requires that the cost

Question 20

Which of the following is not an application of accrual accounting?

Accepted Answer

A) Recording advertising fees earned at the time the work is done. 
B) Adjusting unearned advertising fees to the proper balance at the end of the month. 
C) Recording advertising fees earned at the time the cash payment is received. 
D) Recording telephone expense in the accounting period covered by the monthly bill. 
A) Recording advertising fees earned at the time the work is done. 
B) Adjusting unearned advertising fees to the proper balance at the end of the month. 
C) Recording advertising fees earned at the time the cash payment is received. 
D) Recording telephone expense in the accounting period covered by the monthly bill.

Exam 3: Measuring Business Income: Adjusting the Accounts

Retailers often end their fiscal years .

Failure to adjust for expired prepaid insurance at year end will result in an

When a credit sale takes place,

Which of the following accounts would likely not need to be adjusted at year end?

Net income can be used to assess a company's progress in meeting the goal of profitability.

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

Which of the following accounts is a contra account?

Which of the following is an example of an accrual?

Which of the following accounts would not need to be adjusted at year end?

Financial statement time periods should be of equal length

As an asset's depreciation is recorded,its carrying value decreases.

Which of the following situations does not involve an accrual?

A company recorded office supplies in an asset account when the supplies were purchased.Failure to take inventory and make an adjusting entry will result in an

Adjusting entries are useful in allocating costs among two or more accounting periods.

One application of accrual accounting is adjusting the accounts.

Net income

How and why is the matching rule applied to the cost of a building?

Which of the following is not an application of accrual accounting?

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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