Question 1

Which of the following transactions involves an accrued asset?

Accepted Answer

A) Wages earned by employees but not yet paid 
B) Rent collected in advance from a tenant 
C) Rent owed by a tenant but not yet collected 
D) One year's premium on life insurance policy paid in advance 
A) Wages earned by employees but not yet paid 
B) Rent collected in advance from a tenant 
C) Rent owed by a tenant but not yet collected 
D) One year's premium on life insurance policy paid in advance

Question 2

According to the revenue recognition principle,revenues are recognized when they are _________________________.

Accepted Answer

The answer of According to the revenue recognition principle,revenues are...

Question 3

All financial statements are prepared using the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 4

Income statement accounts are also known as which of the following?

Accepted Answer

A) Nominal accounts 
B) Real accounts 
C) Closing accounts 
D) Both a and c 
A) Nominal accounts 
B) Real accounts 
C) Closing accounts 
D) Both a and c

Question 5

For each of the following sentences 3-10,select the word or group of words that best completes the statement.
   A(n)_________________________ results when cash is received before the related amount is reported on the income statement.

Accepted Answer

The answer of For each of the following sentences 3-10,select...

Question 6

When is revenue from the sale of merchandise normally recognized?

Accepted Answer

A) On the date the sale is made. 
B) When the customer pays for the merchandise. 
C) Either on the date on which the sale occurs,or the date on which the customer pays 
D) When the merchandise is sold,if sold for cash,or when payment is received,if sold on credit 
A) On the date the sale is made. 
B) When the customer pays for the merchandise. 
C) Either on the date on which the sale occurs,or the date on which the customer pays 
D) When the merchandise is sold,if sold for cash,or when payment is received,if sold on credit

Question 7

According to the text,the income statement is in fact a subsetof the balance sheet,because information from the income statement columns flows into the balance sheet columns.

Accepted Answer

A) True 
 B)False

Question 8

The process of recording an item in the financial statements is called measurement.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true concerning assets?

Accepted Answer

A) Assets represent future economic sacrifices 
B) Assets are expired costs 
C) Assets become expenses at the time they are paid in cash 
D) Assets become expenses when their economic benefits expire 
A) Assets represent future economic sacrifices 
B) Assets are expired costs 
C) Assets become expenses at the time they are paid in cash 
D) Assets become expenses when their economic benefits expire

Question 10

Accountants often prepare work sheets at the end of an accounting period in place of financial statements.

Accepted Answer

A) True 
 B)False

Question 11

The Diva Design Group was organized on July 1,2014 when the two principal owners each contributed $50,000 and received shares of stock in exchange.Their year-end is December 31.The following events occurred during Diva Design Group's first year of operations.
   Required:

Accepted Answer

I.(A)1.
 @#IMG-DLM& Assets increase and liabilitie

Question 12

What role do accounting records play in the adjustment process?

Accepted Answer

The adjustments are made by ex

Question 13

The asset account,Supplies,has a balance of $700 on January 1.During January,the company purchased $16,000 of supplies on account and the liability was appropriately recorded.A count of supplies at the end of January indicates a balance of $900.Which one of the following is a correct amount to be reported on the company's financial statements for the month ending January 31?

Accepted Answer

A) Supplies Expense - $15,800 
B) Supplies on Hand - $700 
C) Accounts Payable - $15,800 
D) Supplies Expense - $16,700 
A) Supplies Expense - $15,800 
B) Supplies on Hand - $700 
C) Accounts Payable - $15,800 
D) Supplies Expense - $16,700

Question 14

On August 31,Farrell Corporation signed a one-year contract to provide services to Harris Company for $30,000.Harris will pay for the services on September 1.Using the accrual basis of accounting,when should Farrell Corporation recognize revenue?

Accepted Answer

A) September 1 of the current year when the cash is received from Harris. 
B) On August 31 of the next year when all services have been provided. 
C) Throughout the year as the revenue is earned. 
D) At December 31 of the current year,and August 31 of the next year. 
A) September 1 of the current year when the cash is received from Harris. 
B) On August 31 of the next year when all services have been provided. 
C) Throughout the year as the revenue is earned. 
D) At December 31 of the current year,and August 31 of the next year.

Question 15

Mountainside Kafe Corporation
The following is the consolidated statements of income for Mountainside Kafe Corporation for the years ending December 31,2013 and 2014
   Refer to the consolidated statements of income for Mountainside Kafe Corporation.
Required: Identify three specific accounts of Mountainside Kafe that might include expenses accrued as a result of adjusting journal entries.Show what these entries would look like in journal format.Ignore amounts.

Accepted Answer

The accounts are: Wages expens

Question 16

Hensley Painting Company painted four houses in June at $500 each.At the end of June,three homeowners had paid Hensley cash for the jobs.Under the accrual basis,what amounts will be reported on the income statement and the statement of cash flows for June? Income Statement Statement of Cash Flows

Accepted Answer

A) $ 2,000 $ 2,000 
B) $ 2,000 $ 1,500 
C) $ 1,500 $ 1,500 
D) $ 500 $ 500 
A) $ 2,000 $ 2,000 
B) $ 2,000 $ 1,500 
C) $ 1,500 $ 1,500 
D) $ 500 $ 500

Question 17

Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

Accepted Answer

A) $ 7,500 
B) $ 8,750 
C) $ 15,000 
D) $ 30,000 
A) $ 7,500 
B) $ 8,750 
C) $ 15,000 
D) $ 30,000

Question 18

The amount of cash that could be received by selling an asset currently is called historical cost.

Accepted Answer

A) True 
 B)False

Question 19

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 20

Accumulated depreciation is increased when depreciation is recognized.

Accepted Answer

A) True 
 B)False

Which of the following transactions involves an accrued asset?

According to the revenue recognition principle,revenues are recognized when they are _________________________.

All financial statements are prepared using the accrual basis of accounting.

Income statement accounts are also known as which of the following?

For each of the following sentences 3-10,select the word or group of words that best completes the statement. A(n)_________________________ results when cash is received before the related amount is reported on the income statement.

When is revenue from the sale of merchandise normally recognized?

According to the text,the income statement is in fact a subsetof the balance sheet,because information from the income statement columns flows into the balance sheet columns.

The process of recording an item in the financial statements is called measurement.

Which of the following statements is true concerning assets?

Accountants often prepare work sheets at the end of an accounting period in place of financial statements.

The Diva Design Group was organized on July 1,2014 when the two principal owners each contributed $50,000 and received shares of stock in exchange.Their year-end is December 31.The following events occurred during Diva Design Group's first year of operations. Required:

What role do accounting records play in the adjustment process?

On August 31,Farrell Corporation signed a one-year contract to provide services to Harris Company for $30,000.Harris will pay for the services on September 1.Using the accrual basis of accounting,when should Farrell Corporation recognize revenue?

Hensley Painting Company painted four houses in June at $500 each.At the end of June,three homeowners had paid Hensley cash for the jobs.Under the accrual basis,what amounts will be reported on the income statement and the statement of cash flows for June? Income Statement Statement of Cash Flows

Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

The amount of cash that could be received by selling an asset currently is called historical cost.

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet.

Accumulated depreciation is increased when depreciation is recognized.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 4: Income Measurement and Accrual Accounting

Which of the following transactions involves an accrued asset?

According to the revenue recognition principle,revenues are recognized when they are _________________________.

All financial statements are prepared using the accrual basis of accounting.

Income statement accounts are also known as which of the following?

For each of the following sentences 3-10,select the word or group of words that best completes the statement. A(n)_________________________ results when cash is received before the related amount is reported on the income statement.

When is revenue from the sale of merchandise normally recognized?

According to the text,the income statement is in fact a subsetof the balance sheet,because information from the income statement columns flows into the balance sheet columns.

The process of recording an item in the financial statements is called measurement.

Which of the following statements is true concerning assets?

Accountants often prepare work sheets at the end of an accounting period in place of financial statements.

The Diva Design Group was organized on July 1,2014 when the two principal owners each contributed $50,000 and received shares of stock in exchange.Their year-end is December 31.The following events occurred during Diva Design Group's first year of operations. Required:

What role do accounting records play in the adjustment process?

On August 31,Farrell Corporation signed a one-year contract to provide services to Harris Company for $30,000.Harris will pay for the services on September 1.Using the accrual basis of accounting,when should Farrell Corporation recognize revenue?

Hensley Painting Company painted four houses in June at $500 each.At the end of June,three homeowners had paid Hensley cash for the jobs.Under the accrual basis,what amounts will be reported on the income statement and the statement of cash flows for June? Income Statement Statement of Cash Flows

Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

The amount of cash that could be received by selling an asset currently is called historical cost.

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet.

Accumulated depreciation is increased when depreciation is recognized.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters