Exam 4: Income Measurement and Accrual Accounting

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. On July 31,the amount of supplies on hand is $520.What amount is reported in the July income statement for supplies expense?

____________________ is the allocation of the cost of a tangible,long-term asset over its useful life.

Stitt Homes,Inc.pays its sales personnel 6% commission of the selling price of each home.During November of 2014,sales people sold $18,400,000 of homes.During December,2014,sales people sold $20,050,000 of homes.Because its policy is to pay commissions only in the month after the sales,Stitt paid commissions during December for November,2014.During January of 2013,Stitt paid its sales people commissions for December,2014.

Which one of the following statements is true?

Balance sheet accounts are called real accounts.

Morrison Company sells merchandise to customers.Morrison should normally recognize

Walker Company purchased a truck on May 31,2011 for $70,000.The equipment has an estimated useful life of five years.What amount will appear on Walker Company's balance sheet for total accumulated depreciation at May 31,2014?

Failure to record amounts earned for services provided to customers but not yet paid results in which of the following

An accountant describes the effects of an economic event on an entity by recording the transaction and reporting the amount on the financial statements.What is this called?

While most companies make adjustments and prepare statements monthly,many companies complete the accounting cycle only once per year.

Dino's Pizza employs 10 workers in its plant.Each employee is paid $8 per hour and works 8 hours per day,Monday through Friday.Employees are paid every Wednesday for the previous Monday through Friday workweek.The last payday was Wednesday,May 28.

Longitude Company borrowed on a two-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest will Longitude report on its income statement for the year ending December 31?

Which account is always carried over from the unadjusted trial balance columns of a work sheet to the balance sheet columns of the work sheet without any adjustment?

During December,Dearborne Inc.purchased $800 of supplies for use in its business.At the end of December,20% of the supplies were still on hand,but only 75% had been paid.What amounts will appear on the company's balance sheet on December 31? Supplies on Hand Accounts Payable

Most companies use the cash basis of accounting.

Interim financial statements are prepared annually.

Rocky Corporation employs 14 workers in its retail service center.Each employee is paid $10 per hour and works 6 hours per day,Monday through Friday.Employees are paid every Friday for the workweek just ending.The last payday was Friday,December 26,on which day the employees were paid through that date.

On January 1,2014,Renshaw Avenue Associates,Inc.purchased a copier for $6,000 cash and decided to depreciate it over 5 years.What amounts associated with the copier will appear on Renshaw's financial statements for the year ending December 31,2014? Income Statement Statement of Cash Flows

Expenses can be matched against revenue

Clarke Shop purchased supplies at a cost of $18,000 during 2014.At January 1,2014,the beginning balance in the supplies account was $1,000.For 2014,supplies expense was $16,000.How much "Supplies" are on hand as of December 31,2014?