Question 1

Adjusting entries at the end of an accounting period record explicit transactions.

Accepted Answer

A) True 
 B)False

Question 2

Companies must write-off research and development costs as expenses immediately.

Accepted Answer

A) True 
 B)False

Question 3

The activity of Spencer Company for the month of April is presented below:  Using the accrual basis of accounting,the total expenses for Spencer Company for the month of April is ________.

Accepted Answer

A) $62,000 
B) $78,000 
C) $80,000 
D) $86,000

Question 4

A company has the following data available:  What is the balance in Retained Earnings on December 31,2010?

Accepted Answer

A) $2,000 
B) $24,000 
C) $36,000 
D) none of the above

Question 5

The materiality concept is not subjective.

Accepted Answer

A) True 
 B)False

Question 6

On July 1,Gabriel Company paid 6 months' insurance in advance.The policy covers the period of July 1 through December 31.The total payment was $5,400.At the time of the payment,the company set up the Prepaid Insurance account for $5,400.What is the balance in the Prepaid Insurance account on September 30?

Accepted Answer

A) 0 
B) $1,800 
C) $2,700 
D) $3,600

Question 7

Amounts owed to vendors for purchases on credit are called ________.Amounts due from customers for credit sales are called ________.

Accepted Answer

A) accounts payable; notes receivable 
B) notes payable; notes receivable 
C) accounts payable; accounts receivable 
D) debt payable; debt receivable

Question 8

The ________ is the major link between the balance sheet dated December 31,2010 and the balance sheet dated December 31,2011.

Accepted Answer

A) statement of cash flows 
B) statement of changes in stockholders' equity 
C) statement of changes in stock options 
D) income statement

Question 9

Given below are the daily balances in the accounts of Superior Company.Assume one transaction occurs each day.Explain the nature of each transaction for each day.

Accepted Answer

The answer of Given below are the daily balances in...

Question 10

Increases in ownership claims arising from the delivery of goods are called ________.

Accepted Answer

A) expenses 
B) profits 
C) assets 
D) revenues

Question 11

On January 1,Laguna Company paid $16,000 for rent.The rent covers the period January 1 through April 30.Laguna Company recorded Prepaid Rent of $16,000.What is the balance in the Prepaid Rent account on March 1?

Accepted Answer

A) $4,000 
B) $8,000 
C) $12,000 
D) $16,000

Question 12

A magazine publisher sells annual subscriptions for magazines.The publisher requires cash payment before the magazines are sent out.When the first monthly issue is sent out,the company will ________.

Accepted Answer

A) increase liabilities and increase assets 
B) increase assets and increase revenues 
C) increase revenues and decrease liabilities 
D) increase liabilities and decrease revenues

Question 13

For a corporation,assets must equal liabilities plus paid-in capital.

Accepted Answer

A) True 
 B)False

Question 14

The Financial Accounting Standards Board has the ultimate responsibility for specifying Generally Accepted Accounting Principles for companies that have publicly traded stock in the United States.

Accepted Answer

A) True 
 B)False

Question 15

This financial statement discloses the economic resources of the organization and the claims against those resources.

Accepted Answer

A) income statement 
B) statement of cash flows 
C) statement of retained earnings 
D) balance sheet

Question 16

On May 1,San Jose Company paid $36,000 for rent.The rent covers the period May 1 through August 31.San Jose Company recorded Prepaid Rent of $36,000.What is the Rent Expense for the month of May?

Accepted Answer

A) $0 
B) $9,000 
C) $18,000 
D) $27,000

Question 17

The adjusting entry for wages earned but unpaid results in a(n)________.

Accepted Answer

A) increase in expenses and an increase in liabilities 
B) increase in expenses and a decrease in liabilities 
C) decrease in expenses and a decrease in liabilities 
D) decrease in expenses and an increase in liabilities

Question 18

Depreciation applies to assets such as accounts receivable and equipment.

Accepted Answer

A) True 
 B)False

Question 19

Retained earnings are a specific claim against specific assets.

Accepted Answer

A) True 
 B)False

Question 20

San Francisco Company paid $2,700 for 6 months' insurance,covering the period of April 1 to September 30.At the time of the payment,the entire amount was used to increase the balance in the Prepaid Insurance account.The balance in the Prepaid Insurance account on April 30 is ________.

Accepted Answer

A) $0 
B) $900 
C) $1,800 
D) $2,250

Exam 15: Basic Accounting: Concepts, techniques, and Conventions

Adjusting entries at the end of an accounting period record explicit transactions.

Companies must write-off research and development costs as expenses immediately.

The activity of Spencer Company for the month of April is presented below: Using the accrual basis of accounting,the total expenses for Spencer Company for the month of April is ________.

A company has the following data available: What is the balance in Retained Earnings on December 31,2010?

The materiality concept is not subjective.

Amounts owed to vendors for purchases on credit are called .Amounts due from customers for credit sales are called .

The ________ is the major link between the balance sheet dated December 31,2010 and the balance sheet dated December 31,2011.

Given below are the daily balances in the accounts of Superior Company.Assume one transaction occurs each day.Explain the nature of each transaction for each day.

Increases in ownership claims arising from the delivery of goods are called ________.

On January 1,Laguna Company paid $16,000 for rent.The rent covers the period January 1 through April 30.Laguna Company recorded Prepaid Rent of $16,000.What is the balance in the Prepaid Rent account on March 1?

A magazine publisher sells annual subscriptions for magazines.The publisher requires cash payment before the magazines are sent out.When the first monthly issue is sent out,the company will ________.

For a corporation,assets must equal liabilities plus paid-in capital.

The Financial Accounting Standards Board has the ultimate responsibility for specifying Generally Accepted Accounting Principles for companies that have publicly traded stock in the United States.

This financial statement discloses the economic resources of the organization and the claims against those resources.

On May 1,San Jose Company paid $36,000 for rent.The rent covers the period May 1 through August 31.San Jose Company recorded Prepaid Rent of $36,000.What is the Rent Expense for the month of May?

The adjusting entry for wages earned but unpaid results in a(n) ________.

Depreciation applies to assets such as accounts receivable and equipment.

Retained earnings are a specific claim against specific assets.

San Francisco Company paid $2,700 for 6 months' insurance,covering the period of April 1 to September 30.At the time of the payment,the entire amount was used to increase the balance in the Prepaid Insurance account.The balance in the Prepaid Insurance account on April 30 is ________.