Question 1

The periodicity assumption recognizes that

Accepted Answer

A) the company may continue indefinitely. 
B) all financial statements should cover a fiscal year. 
C) net income is an estimate. 
D) the value of an asset may vary from month to month. 
A) the company may continue indefinitely. 
B) all financial statements should cover a fiscal year. 
C) net income is an estimate. 
D) the value of an asset may vary from month to month.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Which of the following accounts probably would not appear in a trial balance but probably would appear in an adjusted trial balance?

Accepted Answer

A) Accumulated Depreciation-Equipment 
B) Cash 
C) Office Supplies Expense 
D) Owner's Withdrawals 
A) Accumulated Depreciation-Equipment 
B) Cash 
C) Office Supplies Expense 
D) Owner's Withdrawals

Question 4

Use this information pertaining to Tucson Company to answer the following question. 1.The corporation's Supplies account showed a beginning debit balance of $400 and supplies purchased of $1,600.There were $600 of supplies on hand at year end.
2)Depreciation on a building is estimated to be $10,000.
3)A one-year insurance policy was purchased for $4,800.Five months have passed since the purchase.
4)Accrued interest on a note receivable amounted to $200.
5)The company received a $3,600 advance payment during the year on services to be performed.By the end of the year,one-third of the services had been performed.
The adjusting entry for Supplies is

Accepted Answer

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

Question 5

Major assumptions made in measuring business income include all of the following except

Accepted Answer

A) continuity. 
B) periodicity. 
C) matching. 
D) accrual accounting. 
A) continuity. 
B) periodicity. 
C) matching. 
D) accrual accounting.

Question 6

Which of the following is an example of a deferral?

Accepted Answer

A) Wages recorded but not yet paid. 
B) The purchase of a company vehicle. 
C) Legal fees earned but not yet collected. 
D) The accumulation of interest in a bank account. 
A) Wages recorded but not yet paid. 
B) The purchase of a company vehicle. 
C) Legal fees earned but not yet collected. 
D) The accumulation of interest in a bank account.

Question 7

Expenses that have been paid for and recorded are called accrued expenses.

Accepted Answer

A) True 
 B)False

Question 8

Revenue is produced when accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following accounts probably would contain a smaller dollar amount on the adjusted trial balance than on the trial balance?

Accepted Answer

A) Office Supplies 
B) Accumulated Depreciation-Equipment 
C) Cash 
D) Wages Expense 
A) Office Supplies 
B) Accumulated Depreciation-Equipment 
C) Cash 
D) Wages Expense

Question 10

Profitability is best determined from cash flow information.

Accepted Answer

A) True 
 B)False

Question 11

Revenue should be recognized,even when collectibility is not reasonably assured.

Accepted Answer

A) True 
 B)False

Question 12

A revenue for which the service has been performed but that has not been recorded is a deferred revenue.

Accepted Answer

A) True 
 B)False

Question 13

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:
 
-If the estimated depreciation for office equipment were $350,the adjusting entry would contain a

Accepted Answer

A) debit to Accumulated Depreciation-Office Equipment for $350. 
B) credit to Office Equipment for $350. 
C) credit to Accumulated Depreciation-Office Equipment for $350. 
D) credit to Depreciation Expense-Office Equipment for $350. 
A) debit to Accumulated Depreciation-Office Equipment for $350. 
B) credit to Office Equipment for $350. 
C) credit to Accumulated Depreciation-Office Equipment for $350. 
D) credit to Depreciation Expense-Office Equipment for $350.

Question 14

Use this information pertaining to Tucson Company to answer the following question. 1.The corporation's Supplies account showed a beginning debit balance of $400 and supplies purchased of $1,600.There were $600 of supplies on hand at year end.
2)Depreciation on a building is estimated to be $10,000.
3)A one-year insurance policy was purchased for $4,800.Five months have passed since the purchase.
4)Accrued interest on a note receivable amounted to $200.
5)The company received a $3,600 advance payment during the year on services to be performed.By the end of the year,one-third of the services had been performed.
The adjusting entry for the insurance policy is

Accepted Answer

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

Question 15

A company's five-day weekly payroll of $890 is paid on Fridays.Assume that the last day of the month falls on Tuesday.Which of the following is the required adjusting entry for the month end?

Accepted Answer

A) Debit Salaries Payable $534 and credit Salaries Expense $534. 
B) Debit Salaries Expense $534 and credit Salaries Payable $534. 
C) Debit Unpaid Salaries $356 and credit Salaries Payable $356. 
D) Debit Salaries Expense $356 and credit Salaries Payable $356. 
A) Debit Salaries Payable $534 and credit Salaries Expense $534. 
B) Debit Salaries Expense $534 and credit Salaries Payable $534. 
C) Debit Unpaid Salaries $356 and credit Salaries Payable $356. 
D) Debit Salaries Expense $356 and credit Salaries Payable $356.

Question 16

Which of the following conditions is not a requirement by the SEC for the recognition of revenue?

Accepted Answer

A) Delivery has occurred or services have been rendered. 
B) Collectibility is reasonably certain. 
C) A written agreement has been signed. 
D) The seller's price to the buyer is fixed or determinable. 
A) Delivery has occurred or services have been rendered. 
B) Collectibility is reasonably certain. 
C) A written agreement has been signed. 
D) The seller's price to the buyer is fixed or determinable.

Question 17

In applying the matching rule,revenue recognition should come before the matching (assignment)of expense.

Accepted Answer

A) True 
 B)False

Question 18

If a company is expected to survive,it is considered a going concern.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a condition required by the SEC for the recognition of revenue?

Accepted Answer

A) Delivery of goods or rendering of services. 
B) Transfer of cash from the buyer to the seller. 
C) Fixed or determinable price. 
D) Existence of an arrangement. 
A) Delivery of goods or rendering of services. 
B) Transfer of cash from the buyer to the seller. 
C) Fixed or determinable price. 
D) Existence of an arrangement.

Exam 3: Adjusting the Accounts

The periodicity assumption recognizes that

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

Which of the following accounts probably would not appear in a trial balance but probably would appear in an adjusted trial balance?

Major assumptions made in measuring business income include all of the following except

Which of the following is an example of a deferral?

Expenses that have been paid for and recorded are called accrued expenses.

Revenue is produced when accounts receivable are collected.

Which of the following accounts probably would contain a smaller dollar amount on the adjusted trial balance than on the trial balance?

Profitability is best determined from cash flow information.

Revenue should be recognized,even when collectibility is not reasonably assured.

A revenue for which the service has been performed but that has not been recorded is a deferred revenue.

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If the estimated depreciation for office equipment were $350,the adjusting entry would contain a

A company's five-day weekly payroll of $890 is paid on Fridays.Assume that the last day of the month falls on Tuesday.Which of the following is the required adjusting entry for the month end?

Which of the following conditions is not a requirement by the SEC for the recognition of revenue?

In applying the matching rule,revenue recognition should come before the matching (assignment)of expense.

If a company is expected to survive,it is considered a going concern.

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

Which of the following is not a condition required by the SEC for the recognition of revenue?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Completing the Accounting Cycle

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

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

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 and Capital Budgeting

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