Question 1

Which one of the following is an example of a deferred revenue?

Accepted Answer

A)  Sales are made to customers on credit. 
B)  Revenue has been earned but not yet recorded. 
C)  Payments are received prior to providing the services to customers. 
D)  Cash sales are made to customers. 
A)  Sales are made to customers on credit. 
B)  Revenue has been earned but not yet recorded. 
C)  Payments are received prior to providing the services to customers. 
D)  Cash sales are made to customers.

Question 2

Game Systems Corporation has grown significantly over the past year. The end-of-year supplies on hand totaled $200, and purchases totaled $3,000, and supplies on hand at the beginning of the year amounted to $180. How much will Game Systems report as supplies expense for the current year?

Accepted Answer

A)  $2,980 
B)  $3,180 
C)  $3,200 
D)  $3,000 
A)  $2,980 
B)  $3,180 
C)  $3,200 
D)  $3,000

Question 3

Timberland Company received advance payments from customers during 2012 of $240,000. At December 31, 2012, $20,000 of the advance payments still had not been earned. After the adjustments are recorded and posted at December 31, 2012, what will the balances be in the Unearned Service Revenue and Service Revenue accounts?

Accepted Answer

The answer of Timberland Company received advance payments from customers...

Question 4

Brooks Company sells merchandise to customers. Under the accrual basis of accounting, Brooks should normally recognize:

Accepted Answer

A)  revenue and the related expenses in the same accounting period as earned, whether payment is received or not. 
B)  revenue when cash is collected and expenses when Brooks pays its creditor for the merchandise. 
C)  revenue and expenses after all payments are made. 
D)  expenses in the period the merchandise is sold and defer revenue recognition until the customer pays for the merchandise. 
A)  revenue and the related expenses in the same accounting period as earned, whether payment is received or not. 
B)  revenue when cash is collected and expenses when Brooks pays its creditor for the merchandise. 
C)  revenue and expenses after all payments are made. 
D)  expenses in the period the merchandise is sold and defer revenue recognition until the customer pays for the merchandise.

Question 5

Big Dog Company began operations on January 1, 2012. The accountant for Big Dog has recorded the closing entries in the general journal at the company's year-end, December 31, 2012. In addition, the closing entries have been created in the computerized general ledger and the computer has generated a year-end trial balance. Since the closing entries have already been posted, the income statement that the computer printed has the proper account names, but all accounts have zero balances. In addition, the statement of retained earnings shows net income and dividends equal to zero instead of the correct 2012 net income and dividends. As you examine the general journal, you find the closing entries below:
  In good form, prepare a statement of retained earnings for the year ended December 31, 2012. The beginning balance of retained earnings is zero.

Accepted Answer

The answer of Big Dog Company began operations on January...

Question 6

Explain the differences between the cash and the accrual basis of accounting and how the adjusting process fits in.

Accepted Answer

Under the cash basis of accounting, reve

Question 7

Saturn Co. rented out office space to a tenant on January 1 and received a total of $90,000 for the first nine 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 Saturn's net income for the quarter ending March 31?

Accepted Answer

A)  Increase by $90,000 
B)  Decrease by $60,000 
C)  Decrease by $30,000 
D)  Increase by $30,000 
A)  Increase by $90,000 
B)  Decrease by $60,000 
C)  Decrease by $30,000 
D)  Increase by $30,000

Question 8

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

Accepted Answer

A)  Unearned revenue is not reduced for the portion that has been earned 
B)  Interest on money loaned out has not yet been recorded 
C)  Prepaid insurance is not reduced for the portion of the policy that has expired during the period 
D)  Income taxes owed but not yet paid are ignored 
A)  Unearned revenue is not reduced for the portion that has been earned 
B)  Interest on money loaned out has not yet been recorded 
C)  Prepaid insurance is not reduced for the portion of the policy that has expired during the period 
D)  Income taxes owed but not yet paid are ignored

Question 9

Pine Corporation makes adjusting entries monthly. As of March 31, the general ledger shows Prepaid Rent to have a debit balance of $6,000. Rent expires at a rate of $1,200 per month. No entry for rent has been recorded in the month of March. What adjusting entry is necessary at March 31?

Accepted Answer

A)  Prepaid Rent 500
Cash 500 
B)  
Rent Expense 1,200
Cash 1,200 
C)  
  
D)  
Prepaid Rent 6,000
Rent Expense 6,000 
A)  Prepaid Rent 500
Cash 500 
B)  
Rent Expense 1,200
Cash 1,200 
C)  
  
D)  
Prepaid Rent 6,000
Rent Expense 6,000

Question 10

Which of the following entries properly closes a temporary account?

Accepted Answer

A)    
B)   
C)    
D)    
A)    
B)   
C)    
D)

Question 11

The names of the four major classifications of adjusting entries are ____________________, ____________________, ____________________, and ____________________.

Accepted Answer

accrued revenue, acc

Question 12

The ____________________ of accounting is a system in which revenues are recognized when payments are received and expenses are recognized when payments are made.

Accepted Answer

The answer of The ____________________ of accounting is a system...

Question 13

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

Accepted Answer

A)  Unearned revenue is not reduced for the portion that has been earned 
B)  Interest on money borrowed has not yet been recorded. 
C)  Prepaid insurance is not reduced for the portion of the policy that has expired during the period. 
D)  Income taxes owed but not yet paid are ignored. 
A)  Unearned revenue is not reduced for the portion that has been earned 
B)  Interest on money borrowed has not yet been recorded. 
C)  Prepaid insurance is not reduced for the portion of the policy that has expired during the period. 
D)  Income taxes owed but not yet paid are ignored.

Question 14

FedZ is a local package delivery service. If FedZ uses accrual basis of accounting, when should it recognize revenue from its package delivery service?

Accepted Answer

A)  At the date the customer places the order 
B)  At the date the packages are delivered 
C)  At the date the invoice is mailed to the customer 
D)  At the date the customer's payment is received 
A)  At the date the customer places the order 
B)  At the date the packages are delivered 
C)  At the date the invoice is mailed to the customer 
D)  At the date the customer's payment is received

Question 15

Failure to record dividends paid would result in which of the following?

Accepted Answer

A)  Net income being understated 
B)  An increase in total liabilities 
C)  Stockholders' equity being overstated 
D)  Net income being overstated 
A)  Net income being understated 
B)  An increase in total liabilities 
C)  Stockholders' equity being overstated 
D)  Net income being overstated

Question 16

What are adjusting entries and what is their purpose?

Accepted Answer

Adjusting entries are journal entries ma

Question 17

Which of the following entries properly closes a temporary account?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 18

Suppose that a business sells 6-month subscriptions to its monthly magazine. On January 1, the company receives a total of $600 for 10 subscriptions. To record this transaction, the company debits "Cash" for $600 and credits "Unearned Subscription Revenue" for $600. As of January 31, the company has provided one month of magazines and has earned one month of revenue. What adjusting entry is necessary at January 31?

Accepted Answer

A)  
  
B)  
  
C)  
  
D)  
  
A)  
  
B)  
  
C)  
  
D)

Question 19

Which one of the following adjustments will increase assets?

Accepted Answer

A)  Interest incurred on money borrowed during the period but not yet paid to the bank. 
B)  Rent revenue is recorded for amounts owed by a tenant but not yet paid. 
C)  The use of supplies is recorded. 
D)  Depreciation for the period is recorded. 
A)  Interest incurred on money borrowed during the period but not yet paid to the bank. 
B)  Rent revenue is recorded for amounts owed by a tenant but not yet paid. 
C)  The use of supplies is recorded. 
D)  Depreciation for the period is recorded.

Question 20

Which of the following statements present financial information based on the cash basis of accounting?

Accepted Answer

A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Retained Earnings 
D)  Statement of Cash Flows 
A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Retained Earnings 
D)  Statement of Cash Flows

Which one of the following is an example of a deferred revenue?

Game Systems Corporation has grown significantly over the past year. The end-of-year supplies on hand totaled $200, and purchases totaled $3,000, and supplies on hand at the beginning of the year amounted to $180. How much will Game Systems report as supplies expense for the current year?

Brooks Company sells merchandise to customers. Under the accrual basis of accounting, Brooks should normally recognize:

Explain the differences between the cash and the accrual basis of accounting and how the adjusting process fits in.

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

Pine Corporation makes adjusting entries monthly. As of March 31, the general ledger shows Prepaid Rent to have a debit balance of $6,000. Rent expires at a rate of $1,200 per month. No entry for rent has been recorded in the month of March. What adjusting entry is necessary at March 31?

Which of the following entries properly closes a temporary account?

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

The ____________________ of accounting is a system in which revenues are recognized when payments are received and expenses are recognized when payments are made.

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

FedZ is a local package delivery service. If FedZ uses accrual basis of accounting, when should it recognize revenue from its package delivery service?

Failure to record dividends paid would result in which of the following?

What are adjusting entries and what is their purpose?

Which of the following entries properly closes a temporary account?

Which one of the following adjustments will increase assets?

Which of the following statements present financial information based on the cash basis of accounting?

Financial Accounting

Corporate Financial Statements

Recording Accounting Transactions

Internal Control and Cash

Receivables

Inventory

Fixed Assets and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Accrual Accounting and Adjusting Entries

Which one of the following is an example of a deferred revenue?

Game Systems Corporation has grown significantly over the past year. The end-of-year supplies on hand totaled $200, and purchases totaled $3,000, and supplies on hand at the beginning of the year amounted to $180. How much will Game Systems report as supplies expense for the current year?

Brooks Company sells merchandise to customers. Under the accrual basis of accounting, Brooks should normally recognize:

Explain the differences between the cash and the accrual basis of accounting and how the adjusting process fits in.

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

Pine Corporation makes adjusting entries monthly. As of March 31, the general ledger shows Prepaid Rent to have a debit balance of $6,000. Rent expires at a rate of $1,200 per month. No entry for rent has been recorded in the month of March. What adjusting entry is necessary at March 31?

Which of the following entries properly closes a temporary account?

The names of the four major classifications of adjusting entries are ____________________, ____________________, ____________________, and ____________________.

The ____________________ of accounting is a system in which revenues are recognized when payments are received and expenses are recognized when payments are made.

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

FedZ is a local package delivery service. If FedZ uses accrual basis of accounting, when should it recognize revenue from its package delivery service?

Failure to record dividends paid would result in which of the following?

What are adjusting entries and what is their purpose?

Which of the following entries properly closes a temporary account?

Which one of the following adjustments will increase assets?

Which of the following statements present financial information based on the cash basis of accounting?

Financial Accounting

Corporate Financial Statements

Recording Accounting Transactions

Internal Control and Cash

Receivables

Inventory

Fixed Assets and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Filters

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