Question 1

A company borrowed $100,000 from Better Bank on November 1, 2013. The terms of the loan (note)is 6% interest due in 4 months.

Accepted Answer

The answer of A company borrowed $100,000 from Better Bank...

Question 2

A company employs 10 workers in its manufacturing facility. Each employee is paid $10 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, October 28.

Accepted Answer

The answer of A company employs 10 workers in its...

Question 3

For each transaction select the type of adjustment that would be required. (Choices may be used more than once.)
a.Deferred (prepaid)expense
b.Deferred (unearned)revenue
c.Accrued expense
d.Accrued revenue
-Depreciation on a building is recorded

Accepted Answer

The answer of For each transaction select the type of...

Question 4

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.)
a.temporary account
b.permanent account
-Prepaid Insurance

Accepted Answer

The answer of From the list of accounts, determine whether...

Question 5

If the Income Summary account has a credit balance just prior to closing it to retained earnings, the company must have incurred a net income for the year.

Accepted Answer

A) True 
 B)False

Question 6

Adjustments are recorded for all transactions involving outside entities.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following entries properly closes a temporary account?

Accepted Answer

A) Service Revenues 20,000 Income Summary 20,000 
B) Unearned Revenue 10,200 Retained Earnings 10,200 
C) Accumulated Depreciation 1,600 Income Summary 1,600 
D) Dividends 400 Retained Earnings 400

Question 8

A tool company purchased equipment at a cost of $100,000 in January, 2004. As of January 1, 2013, depreciation of $45,000 had been recorded on this asset. Depreciation expense for 2013 is $5,000. After the adjustments are recorded and posted at December 31, 2013, what are the balances for the Depreciation Expense and Accumulated Depreciation? Depreciation Expense Accumulated Depreciation

Accepted Answer

A) $ 5,000 $50,000 
B) $45,000 $45,000 
C) $ 5,000 $45,000 
D) $45,000 $50,000

Question 9

Expenses should be matched against revenue

Accepted Answer

A) before the earnings process is complete. 
B) only after cash is collected from the customer. 
C) in the same period as the revenue that they helped generate. 
D) after payment has been made for any costs related to the revenue.

Question 10

What are adjusting entries and what is their purpose?

Accepted Answer

The answer of What are adjusting entries and what is...

Question 11

-The following are selected data from a large company's financial statements:
  Identify the steps in the accounting cycle that must have been completed prior to determining these amounts.

Accepted Answer

The answer of 
-The following are selected data from a...

Question 12

Match each statement to the item listed below
a.Accrual basis accounting
f.Depreciation
b.Adjusted trial balance
g.Matching principle
c.Adjusting entries
h.Revenue recognition principle
d.Cash basis accounting
i.Time period assumption
e.Contra accounts
j.Worksheet
-States that revenues and expenses are recorded in the time period received or paid

Accepted Answer

The answer of Match each statement to the item listed...

Question 13

Canterbury Cycles sells Harleys and pays each salesperson a commission of $800 for each cycle sold. During the month of December, a salesperson sold 3 cycles. The company pays commissions on the 5th day of the month following the sale. Which of the following statements is true?

Accepted Answer

A) The salesperson will recognize commission revenue earned in the amount of $2,400 in December. 
B) The company will recognize commission expense in the amount of $2,400 in December. 
C) The salesperson will recognize commission expense in the amount of $2,400 in January. 
D) The salesperson will recognize revenue in the same month that the cycle dealer recognizes expense.

Question 14

A sporting goods chain purchased supplies at a cost of $11,000 during the year. At January 1, the beginning balance in the supplies account was $3,000. At December 31, supplies on hand are $800. Determine supplies expense for the year.

Accepted Answer

A) $ 3,000 
B) $13,200 
C) $11,000 
D) $11,800

Question 15

Match each statement to the item listed below
a.Accrual basis accounting
f.Depreciation
b.Adjusted trial balance
g.Matching principle
c.Adjusting entries
h.Revenue recognition principle
d.Cash basis accounting
i.Time period assumption
e.Contra accounts
j.Worksheet
-States that revenues should be recorded in the period in which it is earned

Accepted Answer

The answer of Match each statement to the item listed...

Question 16

Failure to record depreciation expense for the period results in which of the following?

Accepted Answer

A) Net income being overstated. 
B) No effect on total assets. 
C) Stockholders' equity being overstated. 
D) Both a andc.

Question 17

The difference between accrual-based revenue and accrual-based expenses in the period the activity occurred is called ____________________.

Accepted Answer

The answer of The difference between accrual-based revenue and accrual-based...

Question 18

The worksheet facilitates preparation of the income statement, retained earnings statement and balance sheet but not the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 19

Income statement accounts are also known as which of the following?

Accepted Answer

A) temporary accounts 
B) real accounts 
C) permanent accounts 
D) asset accounts

Question 20

Match the following types of adjusting entries to the listed situation. (Choices may be used more than once.)
a.a deferred (prepaid)expense
b.a deferred (unearned)revenue
c.an accrued expense
d.an accrued revenue
-Cash was collected from customers for services to be performed next year

Accepted Answer

The answer of Match the following types of adjusting entries...

Exam 3: Accrual Accounting

A company borrowed $100,000 from Better Bank on November 1, 2013. The terms of the loan (note)is 6% interest due in 4 months.

A company employs 10 workers in its manufacturing facility. Each employee is paid $10 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, October 28.

For each transaction select the type of adjustment that would be required. (Choices may be used more than once.) a.Deferred (prepaid)expense b.Deferred (unearned)revenue c.Accrued expense d.Accrued revenue -Depreciation on a building is recorded

From the list of accounts, determine whether the account is a temporary or permanent account. (Choices may be used more than once.) a.temporary account b.permanent account -Prepaid Insurance

If the Income Summary account has a credit balance just prior to closing it to retained earnings, the company must have incurred a net income for the year.

Adjustments are recorded for all transactions involving outside entities.

Which of the following entries properly closes a temporary account?

Expenses should be matched against revenue

What are adjusting entries and what is their purpose?

-The following are selected data from a large company's financial statements: Identify the steps in the accounting cycle that must have been completed prior to determining these amounts.

Canterbury Cycles sells Harleys and pays each salesperson a commission of $800 for each cycle sold. During the month of December, a salesperson sold 3 cycles. The company pays commissions on the 5th day of the month following the sale. Which of the following statements is true?

A sporting goods chain purchased supplies at a cost of $11,000 during the year. At January 1, the beginning balance in the supplies account was $3,000. At December 31, supplies on hand are $800. Determine supplies expense for the year.

Failure to record depreciation expense for the period results in which of the following?

The difference between accrual-based revenue and accrual-based expenses in the period the activity occurred is called ____________________.

The worksheet facilitates preparation of the income statement, retained earnings statement and balance sheet but not the cash flow statement.

Income statement accounts are also known as which of the following?

Match the following types of adjusting entries to the listed situation. (Choices may be used more than once.) a.a deferred (prepaid)expense b.a deferred (unearned)revenue c.an accrued expense d.an accrued revenue -Cash was collected from customers for services to be performed next year