Exam 4: Income Measurement and Accrual Accounting

Which of the following situations does not require an adjusting entry at the end of May?

A company forgot to record four adjustments during 2012.Which one of the following omissions of adjustments will understate net income?

Halpern Systems Corp.has grown significantly over the past year.One area that has plagued the Controller of Halpern is the reconciliation of supplies expense.The end-of-year supplies on hand totaled $20,and purchases totaled $500,and supplies on hand at the beginning of the year amounted to $200.How much will Halpern Systems report as supplies expense for the current year?

The names of the four major types of adjusting entries are _________________________,_________________________,_________________________,and _________________________.

Winston Corp.had $1,800 of supplies on hand at January 1.During the year,supplies with a cost of $4,000 were purchased.At December 31,the actual supplies on hand amount to $1,300.After the adjustments are recorded and posted at December 31,determine the balances in the Supplies and Supplies Expense accounts. Supplies Supplies Expense

The balance in the account,Rent Collected in Advance,is reported as an asset on the balance sheet of the landlord.

Corrine Auto sold merchandise to a customer for $3,000 on credit on July 10.The customer paid Corrine Auto the amount due on July 31.Under the accrual basis of accounting,which of the following statements is true?

When are revenues and expenses recognized in the same accounting period that cash receipts and payments occur?

____________________ is a rise in the general level of prices in the economy and results in a decrease in purchasing power.

A pool cleaning service signs a contract with a new customer on May 1.The pool is vacuumed and "shocked" for the customer on June 1,and the bill for the services is paid on July 1.Under the accrual basis,the business should recognize revenue on:

At the end of 2014,the unadjusted accounting records for Bacon Corporation contain the following selected accounts and balances.

____________________ is the name given to balance sheet accounts because they are permanent in nature.

Some of the steps in the accounting cycle are listed below.Select the choice that places these steps in the correct order. 1.Close the accounts. 2)Post transactions to accounts in the ledger. 3)Journalize daily transactions. 4)Record and post adjustments. 5)Prepare financial statements.

Accumulated Depreciation

Which one of the following steps in the accounting cycle is completed only at the end of an accounting period?

Carrington & Co.rented office space to a tenant on January 31 and received a total of $9,000 for the first three months of rent.The amount was recorded as Rent Collected in Advance when received.Adjustments are recorded only at the end of every quarter.What effect does the adjustment at March 31 have on Carrington's net income for the quarter ending March 31?

Recognition is the process of formally recording or incorporating an item into the financial statements

Carin Smith operates a small retail establishment.The following unadjusted amounts were taken from Smith's accounting records at December 31,2014: Determine the effect on the accounting equation of the adjusting entries at December 31,2014,for each of the transactions that follow:

Anchor,Inc.paid salaries expense of $292,000 during 2014.However,additional salaries of $14,000 had been earned by employees,but not paid or recorded at December 31,2014 by Anchor.

Carpenter Transport Company purchased a truck at a cost of $60,000 on January 1,2010.The truck has an estimated useful life of 9 years and a $15,000 residual value.