Question 1

Which one of the following adjustments increases net income for the period?

Accepted Answer

A) Recognition of the amount of supplies used. 
B) Recognition of interest on a note receivable. 
C) Recognition of wages earned,but not paid to employees. 
D) Recognition of rent costs that had been paid to the landlord in advance. 
A) Recognition of the amount of supplies used. 
B) Recognition of interest on a note receivable. 
C) Recognition of wages earned,but not paid to employees. 
D) Recognition of rent costs that had been paid to the landlord in advance.

Question 2

As a general rule,revenue is recognized at the point of sale.Which one of the following situations illustrates this rule?

Accepted Answer

A) Products are sold to customers on credit with payment due in 30 days 
B) Employees are paid wages the week after the wages are earned 
C) Products are purchased for resale purposes 
D) Interest is collected from amounts loaned to employees 
A) Products are sold to customers on credit with payment due in 30 days 
B) Employees are paid wages the week after the wages are earned 
C) Products are purchased for resale purposes 
D) Interest is collected from amounts loaned to employees

Question 3

When cash is paid before an expense is incurred,an accrual is necessary.

Accepted Answer

A) True 
 B)False

Question 4

What effect does "recognizing an accrued liability for utilities at the end of the accounting period" have on the accounting equation?

Accepted Answer

A) Assets decrease and stockholders' equity decreases 
B) Liabilities increase and stockholders' equity increases 
C) Assets decrease and liabilities decrease 
D) Liabilities increase and stockholders' equity decreases 
A) Assets decrease and stockholders' equity decreases 
B) Liabilities increase and stockholders' equity increases 
C) Assets decrease and liabilities decrease 
D) Liabilities increase and stockholders' equity decreases

Question 5

Assuming the use of a work sheet,are the formal adjusting entries recorded and posted to the accounts before or after the financial statements are prepared? Explain your answer.Would your answer change if a work sheet was not prepared? Explain.

Accepted Answer

When a work sheet is used,the formal adj

Question 6

Expired costs are called assets.

Accepted Answer

A) True 
 B)False

Question 7

Failure to record accrued interest expense would result in which of the following?

Accepted Answer

A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated 
A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated

Question 8

Tracy,Inc. Tracy,Inc.adjusts its books each month but closes its books at the end of the year.The trial balance at July 31 before adjustments is as follows:
  Refer to the trial balance for Tracy,Inc.
According to contracts,$4,810 of Unearned Service Revenue has been earned in July.Which of the following is the correct amount of Service Revenue to be reported in the July income statement?

Accepted Answer

A) $20,410 
B) $11,700 
C) $21,320 
D) $16,510 
A) $20,410 
B) $11,700 
C) $21,320 
D) $16,510

Question 9

Explain the purpose of a work sheet.

Accepted Answer

A work sheet is not a financial statemen

Question 10

The basis of accounting that fails to take into consideration amounts earned that are not collected and expenses incurred but are not paid is the _________________________.

Accepted Answer

The answer of The basis of accounting that fails to...

Question 11

Given below are the accounts from Surf Corporation's ledger accounts after adjustments have been posted at December 31,2014.

Accepted Answer

The answer of Given below are the accounts from Surf...

Question 12

Malco Tile Shop purchased insurance coverage for two years on July 1,2013,for its retail shop for $3,600.Malco recorded the prepayment as an asset.Malco prepares its adjusting entries at year end December 31

Accepted Answer

The answer of Malco Tile Shop purchased insurance coverage for...

Question 13

Camp Consulting Services started business on January 1,2014.Camp performed services for customers totaling $100,000 of which 40% remain uncollected at the end of December.Under the accrual basis,what amounts would appear on Camp Consulting's financial statements for 2014? Income Statement Statement of Cash Flows

Accepted Answer

A) $ 100,000 $ 60,000 
B) $ 100,000 $ 100,000 
C) $ 60,000 $ 60,000 
D) $ 60,000 $ 100,000 
A) $ 100,000 $ 60,000 
B) $ 100,000 $ 100,000 
C) $ 60,000 $ 60,000 
D) $ 60,000 $ 100,000

Question 14

When using a worksheet:

Accepted Answer

A) an equal number of account titles are applicable to the Income Statement columns and the Balance Sheet columns. 
B) adjusting entries are not made since they appear on the worksheet. 
C) net income appears in both the Income Statement debit column and the Balance Sheet credit column. 
D) the Income Statement column and Balance Sheet column of the worksheet eliminate the need to prepare formal financial statements. 
A) an equal number of account titles are applicable to the Income Statement columns and the Balance Sheet columns. 
B) adjusting entries are not made since they appear on the worksheet. 
C) net income appears in both the Income Statement debit column and the Balance Sheet credit column. 
D) the Income Statement column and Balance Sheet column of the worksheet eliminate the need to prepare formal financial statements.

Question 15

Cuisine Company received a 6-month,6% note for $10,000 from its president on October 1,2014.The note is due on March 31,2015.If Cuisine's accounting period ends on December 31,how much interest revenue should Cuisine recognize during 2014 and 2015? 2014 2015

Accepted Answer

A) $ 450 $ 150 
B) $ 600 $ -0- 
C) $ 300 $ 300 
D) $ 150 $ 150 
A) $ 450 $ 150 
B) $ 600 $ -0- 
C) $ 300 $ 300 
D) $ 150 $ 150

Question 16

Reconstruct the adjusting and closing entries from the following T-Accounts.

Accepted Answer

Adjusting

Question 17

Which one of the following is an example of an accrued liability?

Accepted Answer

A) Wages have been earned by employees,but have not been paid at the end of the period 
B) Equipment that will benefit several periods has been purchased 
C) An insurance policy that expires in a future period has been acquired 
D) Supplies are purchased and used over several months 
A) Wages have been earned by employees,but have not been paid at the end of the period 
B) Equipment that will benefit several periods has been purchased 
C) An insurance policy that expires in a future period has been acquired 
D) Supplies are purchased and used over several months

Question 18

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Accepted Answer

A) Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays 
B) Prepaid insurance is assigned to expense as the insurance expires 
C) A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used 
D) Merchandise inventory is assigned to cost of goods sold in the period the goods are sold 
A) Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays 
B) Prepaid insurance is assigned to expense as the insurance expires 
C) A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used 
D) Merchandise inventory is assigned to cost of goods sold in the period the goods are sold

Question 19

Under the accrual basis of accounting,at what point in time should a fast food restaurant recognize revenue? _________________________

Accepted Answer

At the poi

Question 20

Grove Corp.purchased equipment at a cost of $260,000 in January,2010.As of January 1,2014,depreciation of $88,000 had been recorded on this asset.Depreciation expense for 2014 is $22,000.After the adjustments are recorded and posted at December 31,2014,what are the balances for the Depreciation Expense and Accumulated Depreciation? Depreciation Expense Accumulated Depreciation

Accepted Answer

A) $ 22,000 $ 110,000 
B) $ 22,000 $ 88,000 
C) $ 110,000 $ 110,000 
D) $ 110,000 $ 88,000 
A) $ 22,000 $ 110,000 
B) $ 22,000 $ 88,000 
C) $ 110,000 $ 110,000 
D) $ 110,000 $ 88,000

Which one of the following adjustments increases net income for the period?

As a general rule,revenue is recognized at the point of sale.Which one of the following situations illustrates this rule?

When cash is paid before an expense is incurred,an accrual is necessary.

What effect does "recognizing an accrued liability for utilities at the end of the accounting period" have on the accounting equation?

Assuming the use of a work sheet,are the formal adjusting entries recorded and posted to the accounts before or after the financial statements are prepared? Explain your answer.Would your answer change if a work sheet was not prepared? Explain.

Expired costs are called assets.

Failure to record accrued interest expense would result in which of the following?

Explain the purpose of a work sheet.

The basis of accounting that fails to take into consideration amounts earned that are not collected and expenses incurred but are not paid is the _________________________.

Given below are the accounts from Surf Corporation's ledger accounts after adjustments have been posted at December 31,2014.

Malco Tile Shop purchased insurance coverage for two years on July 1,2013,for its retail shop for $3,600.Malco recorded the prepayment as an asset.Malco prepares its adjusting entries at year end December 31

When using a worksheet:

Cuisine Company received a 6-month,6% note for $10,000 from its president on October 1,2014.The note is due on March 31,2015.If Cuisine's accounting period ends on December 31,how much interest revenue should Cuisine recognize during 2014 and 2015? 2014 2015

Reconstruct the adjusting and closing entries from the following T-Accounts.

Which one of the following is an example of an accrued liability?

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Under the accrual basis of accounting,at what point in time should a fast food restaurant recognize revenue? _________________________

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 one of the following adjustments increases net income for the period?

As a general rule,revenue is recognized at the point of sale.Which one of the following situations illustrates this rule?

When cash is paid before an expense is incurred,an accrual is necessary.

What effect does "recognizing an accrued liability for utilities at the end of the accounting period" have on the accounting equation?

Assuming the use of a work sheet,are the formal adjusting entries recorded and posted to the accounts before or after the financial statements are prepared? Explain your answer.Would your answer change if a work sheet was not prepared? Explain.

Expired costs are called assets.

Failure to record accrued interest expense would result in which of the following?

Explain the purpose of a work sheet.

The basis of accounting that fails to take into consideration amounts earned that are not collected and expenses incurred but are not paid is the _________________________.

Given below are the accounts from Surf Corporation's ledger accounts after adjustments have been posted at December 31,2014.

Malco Tile Shop purchased insurance coverage for two years on July 1,2013,for its retail shop for $3,600.Malco recorded the prepayment as an asset.Malco prepares its adjusting entries at year end December 31

When using a worksheet:

Cuisine Company received a 6-month,6% note for $10,000 from its president on October 1,2014.The note is due on March 31,2015.If Cuisine's accounting period ends on December 31,how much interest revenue should Cuisine recognize during 2014 and 2015? 2014 2015

Reconstruct the adjusting and closing entries from the following T-Accounts.

Which one of the following is an example of an accrued liability?

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Under the accrual basis of accounting,at what point in time should a fast food restaurant recognize revenue? _________________________

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