Question 1

is the association of the costs incurred with the associated revenue of a period.

Accepted Answer

The answer of is the association of the costs incurred...

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

One effect of recognizing depreciation is to decrease net income.

Accepted Answer

A) True 
 B)False

Question 5

The success of accounting as a form of communication depends on two concepts, and
____________________.

Accepted Answer

The answer of The success of accounting as a form...

Question 6

Measurement of the economic effects on an entity involves each of the following except

Accepted Answer

A) Quantification of effects 
B) Identification of the attribute to be measured 
C) Selection of an appropriate unit of measure 
D) Recording the economic effects in the financial statements

Question 7

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

Question 8

The recognition of revenue may result from the settlement of a liability rather than from the acquisition of an asset.

Accepted Answer

A) True 
 B)False

Question 9

Davis Corp.has three employees.Each earns $600 per week for a five day work week ending on Friday.This month the last day of the month falls on a Wednesday.The company should make which of the following adjusting entries?

Accepted Answer

A) Credit Wage Expense for $360 and debit Wages Payable for $360 
B) Debit Wage Expense for $1,080 and credit Wages Payable for $1,080 
C) Credit Wage Expense for $1,080 and debit Wages Payable for $1,080 
D) Debit Wage Expense for $360 and credit Wages Payable for $360

Question 10

Doran Systems Corp.has grown significantly over the past year.One area that has plagued the Controller of Doran 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 Doran Systems report as supplies expense for the current year?

Accepted Answer

A) $ 200 
B) $ 680 
C) $ 220 
D) $ 700

Question 11

Every company prepares only four adjustments-one for each of the four types of adjustments.

Accepted Answer

A) True 
 B)False

Question 12

Temporary accounts are also known as accounts.

Accepted Answer

The answer of Temporary accounts are also known as accounts....

Question 13

Expense accounts are debited in the closing process.

Accepted Answer

A) True 
 B)False

Question 14

Place Corp.purchased supplies at a cost of $12,000 during the year.At January 1, supplies on hand were $2,000.At December 31, supplies on hand are $1,000.Determine the amount of supplies expense for the year.

Accepted Answer

A) $ 10,000 
B) $ 12,000 
C) $ 13,000 
D) $ 14,000

Question 15

Frank Corporation purchased supplies at a cost of $15,000 during 2015.At January 1, 2015, supplies on hand were $2,000.At December 31, 2015, supplies on hand are $2,500.Calculate supplies expense for 2015.

Accepted Answer

A) $ 15,500 
B) $ 14,500 
C) $ 15,000 
D) $ 17,000

Question 16

Measurement in accounting requires choosing an attribute and a unit of measure. is the attribute used for many of the assets included in the financial statements.

Accepted Answer

The answer of Measurement in accounting requires choosing an attribute...

Question 17

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) Revenue is recorded in the accounting records when the goods are received from a supplier, and reported on the income statement when sold to the customer. 
B) Revenue is recorded in the accounting records and reported on the income statement when the cash is received from the customer. 
C) Revenue is recorded in the accounting records when the goods are sold to a customer, and reported on the income statement when the cash payment is received from the customer. 
D) Revenue is recorded in the accounting records and reported on the income statement when goods are sold and delivered to a customer.

Question 19

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

Question 20

Tracy, Inc.
 
-Refer to the trial balance of Tracy, Inc.Round calculations to the nearest dollar.)
If the equipment had an estimated useful life of five years and no salvage value, what is its book value at July 31, after the proper monthly July adjustment is recorded?

Accepted Answer

A) $10,400 
B) $25,567 
C) $15,167 
D) $10,833

Exam 4: Income Measurement and Accrual Accounting

is the association of the costs incurred with the associated revenue of a period.

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

When is revenue from the sale of merchandise normally recognized?

One effect of recognizing depreciation is to decrease net income.

The success of accounting as a form of communication depends on two concepts, and ____________________.

Measurement of the economic effects on an entity involves each of the following except

Which of the following transactions involves an accrued asset?

The recognition of revenue may result from the settlement of a liability rather than from the acquisition of an asset.

Davis Corp.has three employees.Each earns $600 per week for a five day work week ending on Friday.This month the last day of the month falls on a Wednesday.The company should make which of the following adjusting entries?

Every company prepares only four adjustments-one for each of the four types of adjustments.

Temporary accounts are also known as accounts.

Expense accounts are debited in the closing process.

Place Corp.purchased supplies at a cost of $12,000 during the year.At January 1, supplies on hand were $2,000.At December 31, supplies on hand are $1,000.Determine the amount of supplies expense for the year.

Frank Corporation purchased supplies at a cost of $15,000 during 2015.At January 1, 2015, supplies on hand were $2,000.At December 31, 2015, supplies on hand are $2,500.Calculate supplies expense for 2015.

Measurement in accounting requires choosing an attribute and a unit of measure. is the attribute used for many of the assets included in the financial statements.

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

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

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?

Tracy, Inc. -Refer to the trial balance of Tracy, Inc.Round calculations to the nearest dollar.) If the equipment had an estimated useful life of five years and no salvage value, what is its book value at July 31, after the proper monthly July adjustment is recorded?