Exam 4: Income Measurement and Accrual Accounting

Deacon Company purchased equipment last year for $30,000.The equipment has an estimated useful life of five years.What amount will appear on the income statement for depreciation expense for the month of March,2014?

Fennel Flooring purchased office supplies for its showroom during the month of April for $2,600.The supplies were paid for during April.On April 1,the Supplies account had a balance of $350.On April 30,supplies on hand amounted to $200.

The following accounts appear on Treetop Inc.2014 financial statements.The accounts are listed in alphabetical order,and the balance in each account is the normal balance for that account.All amounts are in millions of dollars.Prepare closing entries for Treetop for 2014. Cash Dividends Paid $ 104 Cost of Sales and Related Buying and Occupancy Costs 4,317 Credit Card Revenues 325 Income Tax Expense 207 Interest Expense,net 126 Other Income and Expense,net 13 Net Sales 7,172 Selling,General and Administrative Expenses-Credit Segment 275 Selling,General and Administrative Expenses-Retail Stores, Direct and Other Segments 2,228

Every adjustment involves at least one income statement and one balance sheet account.

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 paid before the related amount is reported on the income statement.

Which of the following concepts is important to accrual accounting?

Which of the following adjusting entries involves the cash account?

Harvest Catering is a local catering service.Conceptually,when should Harvest recognize revenue from its catering service?

For each of the following sentences 3-10,select the word or group of words that best completes the statement. A(n)____________________ creates an increase in income for the period.

Under the accrual basis of accounting,at what point in time should a publisher of magazines record revenue? ______________________________

For each of the following sentences 3-10,select the word or group of words that best completes the statement. ____________________ is the association of the costs incurred with the associated revenue of a period.

Clayton City Consultants started business on January 1,2014,and immediately purchased $1,000 of supplies to use in the business.At the end of the month,25 percent of the supplies remains unpaid and 20% are still on hand.What amounts should appear on the financial statements for January,2014? Income Statement Statement of Cash Flows

The one asset account that never requires adjustment at the end of the period is ____________________.

The amount in the Dividends account should be carried over from the adjusted trial balance of the 10-column worksheet to which of the following columns?

When a company recognizes the portion of supplies used during a year,the effect is to decrease net income.

The amount in the Subscriptions Sold in Advance account should be carried over from the adjusted trial balance of the 10-column worksheet to which of the following columns?

____________________ is the name given to revenue,expense,and dividend accounts because they are closed at the end of the period.

When revenue is earned before the receipt of cash,an adjustment that increases a receivable and decreases a liability account is recorded.

What does the phrase,"Revenue is recognized at the point of sale" mean?

For each of the following sentences 3-10,select the word or group of words that best completes the statement. The success of accounting as a form of communication depends on two concepts,____________________ and ____________________.