Question 1

The fixed asset section of a balance sheet may also be labeled as property, plant, and equipment.

Accepted Answer

A) True 
 B)False  True

Question 2

St.Nick Corporation's Toy-Making Supplies account showed a beginning balance of $200 and supplies purchased of $800.There were $400 of supplies on hand at year-end.The year-end adjustment would include an increase in Toy-Making Supplies Expense for

Accepted Answer

A)  $1,000. 
B)  $800. 
C)  $600. 
D)  $400. 
A)  $1,000. 
B)  $800. 
C)  $600. 
D)  $400. C

Question 3

"Brand name" recognition is an example of goodwill.

Accepted Answer

A) True 
 B)False  True

Question 4

A deferred expense is initially recorded as:

Accepted Answer

A)  an asset but becomes an expense over time. 
B)  an expense but becomes an asset over time. 
C)  a liability but becomes an expense over time. 
D)  an expense but becomes a liability over time. 
A)  an asset but becomes an expense over time. 
B)  an expense but becomes an asset over time. 
C)  a liability but becomes an expense over time. 
D)  an expense but becomes a liability over time.

Question 5

Accumulated depreciation is a(n):

Accepted Answer

A)  contra asset. 
B)  contingent asset. 
C)  revenue expenditure. 
D)  accrued expense. 
A)  contra asset. 
B)  contingent asset. 
C)  revenue expenditure. 
D)  accrued expense.

Question 6

Identify the type of adjustment necessary (the type of item involved) and record the transaction for the event.Make sure to include the ending balances after adjustment.
Assume that on June 1, 2016, Carter Lights Corp.had paid $1,800 in advance for a 6-month insurance policy.The June 30 adjustment is: $$\begin{array} { | l | c | c | c | c | c | c | } 
\hline &{ \text { Assets } = } &&&{ \text { Liabilities + Stockholders' Equity } } \
\hline & \text { Cash } & \begin{array} { c } 
\text { Prepaid } \
\text { Insurance }
\end{array} & \begin{array} { c } 
\text { Office } \
\text { Equipment }
\end{array} & \begin{array} { c } 
\text { Accounts } \
\text { Payable }
\end{array} & \begin{array} { c } 
\text { Common } \
\text { Stock }
\end{array} & \begin{array} { c } 
\text { Retained } \
\text { Earnings }
\end{array} \
\hline \text { Beg. Bal. } & - 1,800 & 1,800 & & & & \
\hline \text { Adjustment } & & & & & & \
\hline \text { End. Bal. } & & & & & & \
\hline
\end{array}$$ ​
​

Accepted Answer

The answer of Identify the type of adjustment necessary (the...

Question 7

Every company must use the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the effect of the payment of dividends by a company to its stockholders?

Accepted Answer

A)  ​The company's liquidity decreases, while profitability remains unchanged. 
B)  ​The company's profitability and liquidity remains unchanged. 
C)  ​The company's profitability and liquidity decrease. 
D)  ​The company's profitability increases, while its liquidity decreases. 
A)  ​The company's liquidity decreases, while profitability remains unchanged. 
B)  ​The company's profitability and liquidity remains unchanged. 
C)  ​The company's profitability and liquidity decrease. 
D)  ​The company's profitability increases, while its liquidity decreases.

Question 9

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is normally the result of cash being received or paid before the revenue is earned or the expense is incurred?

Accepted Answer

A)  A deferred expense 
B)  An accrued expense 
C)  A contra asset 
D)  An intangible asset 
A)  A deferred expense 
B)  An accrued expense 
C)  A contra asset 
D)  An intangible asset

Question 11

Describe the differences between the cash and accrual bases of accounting.

Accepted Answer

Under the cash basis of accounting, tran

Question 12

Cash receipts from interest and dividends are classified as:

Accepted Answer

A)  investing activities. 
B)  operating activities. 
C)  either financing or investing activities. 
D)  financing activities. 
A)  investing activities. 
B)  operating activities. 
C)  either financing or investing activities. 
D)  financing activities.

Question 13

Which one of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  A gain on the sale of land 
B)  A decrease in accounts payable 
C)  An increase in accrued liabilities 
D)  Dividends paid on common stock 
A)  A gain on the sale of land 
B)  A decrease in accounts payable 
C)  An increase in accrued liabilities 
D)  Dividends paid on common stock

Question 14

The process that begins with the analysis of transactions and ends with preparing the accounting records for the next accounting period is called the accounting cycle.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following transactions will affect the liquidity metric of a company? ​

Accepted Answer

A)  ​Supplies used for manufacturing a product 
B)  ​Salary owed but not paid 
C)  ​Services provided but not billed to the customer 
D)  ​Depreciation charged on fixed asset 
A)  ​Supplies used for manufacturing a product 
B)  ​Salary owed but not paid 
C)  ​Services provided but not billed to the customer 
D)  ​Depreciation charged on fixed asset

Question 16

ASE Company sold goods, receiving $35,000 in cash and $15,000 on credit.How much revenue should it record under the accrual basis of accounting?

Accepted Answer

A)  $35,000 
B)  $15,000 
C)  $50,000 
D)  $50,000. 
A)  $35,000 
B)  $15,000 
C)  $50,000 
D)  $50,000.

Question 17

In August, Falcon Inc.received cash in advance of rendering services to its clients.If only a few of those services were provided by December 31, the year-end adjustment would:

Accepted Answer

A)  increase unearned revenue and decrease revenue. 
B)  increase accounts payable and decrease revenue. 
C)  increase cash and decrease accounts receivable. 
D)  decrease unearned revenue and increase revenue. 
A)  increase unearned revenue and decrease revenue. 
B)  increase accounts payable and decrease revenue. 
C)  increase cash and decrease accounts receivable. 
D)  decrease unearned revenue and increase revenue.

Question 18

X&Y Co.received $4,000 in payments from clients for services billed in a previous month.What effect does this transaction have on the accounts under the accrual basis of accounting?

Accepted Answer

A)  Total assets increase by $4,000. 
B)  Assets will increase by $4,000 and revenues will increase $4,000. 
C)  Total assets will be decrease by $4,000. 
D)  The net effect on assets is zero. 
A)  Total assets increase by $4,000. 
B)  Assets will increase by $4,000 and revenues will increase $4,000. 
C)  Total assets will be decrease by $4,000. 
D)  The net effect on assets is zero.

Question 19

When cash is paid to suppliers on account, which section of the Statement of Cash Flows is affected?

Accepted Answer

A)  Cash Flow from Operating Activities. 
B)  Cash Flow from Investing Activities. 
C)  Cash Flow from Financing Activities 
D)  There is no effect on the Statement of Cash Flows. 
A)  Cash Flow from Operating Activities. 
B)  Cash Flow from Investing Activities. 
C)  Cash Flow from Financing Activities 
D)  There is no effect on the Statement of Cash Flows.

Question 20

Which of the following assets never loses its ability to provide service and, as a result, does not need to be depreciated?

Accepted Answer

A)  A copyright 
B)  Office equipment 
C)  A patent 
D)  Land 
A)  A copyright 
B)  Office equipment 
C)  A patent 
D)  Land

The fixed asset section of a balance sheet may also be labeled as property, plant, and equipment.

St.Nick Corporation's Toy-Making Supplies account showed a beginning balance of $200 and supplies purchased of $800.There were $400 of supplies on hand at year-end.The year-end adjustment would include an increase in Toy-Making Supplies Expense for

"Brand name" recognition is an example of goodwill.

A deferred expense is initially recorded as:

Accumulated depreciation is a(n):

Every company must use the cash basis of accounting.

Which of the following is the effect of the payment of dividends by a company to its stockholders?

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

Which of the following is normally the result of cash being received or paid before the revenue is earned or the expense is incurred?

Describe the differences between the cash and accrual bases of accounting.

Cash receipts from interest and dividends are classified as:

Which one of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

The process that begins with the analysis of transactions and ends with preparing the accounting records for the next accounting period is called the accounting cycle.

Which of the following transactions will affect the liquidity metric of a company?

ASE Company sold goods, receiving $35,000 in cash and $15,000 on credit.How much revenue should it record under the accrual basis of accounting?

In August, Falcon Inc.received cash in advance of rendering services to its clients.If only a few of those services were provided by December 31, the year-end adjustment would:

X&Y Co.received $4,000 in payments from clients for services billed in a previous month.What effect does this transaction have on the accounts under the accrual basis of accounting?

When cash is paid to suppliers on account, which section of the Statement of Cash Flows is affected?

Which of the following assets never loses its ability to provide service and, as a result, does not need to be depreciated?

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 3: Basic Accounting Systems: Accrual Basis

The fixed asset section of a balance sheet may also be labeled as property, plant, and equipment.

St.Nick Corporation's Toy-Making Supplies account showed a beginning balance of $200 and supplies purchased of $800.There were $400 of supplies on hand at year-end.The year-end adjustment would include an increase in Toy-Making Supplies Expense for

"Brand name" recognition is an example of goodwill.

A deferred expense is initially recorded as:

Accumulated depreciation is a(n):

Every company must use the cash basis of accounting.

Which of the following is the effect of the payment of dividends by a company to its stockholders?

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

Which of the following is normally the result of cash being received or paid before the revenue is earned or the expense is incurred?

Describe the differences between the cash and accrual bases of accounting.

Cash receipts from interest and dividends are classified as:

Which one of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

The process that begins with the analysis of transactions and ends with preparing the accounting records for the next accounting period is called the accounting cycle.

Which of the following transactions will affect the liquidity metric of a company? ​

ASE Company sold goods, receiving $35,000 in cash and $15,000 on credit.How much revenue should it record under the accrual basis of accounting?

In August, Falcon Inc.received cash in advance of rendering services to its clients.If only a few of those services were provided by December 31, the year-end adjustment would:

X&Y Co.received $4,000 in payments from clients for services billed in a previous month.What effect does this transaction have on the accounts under the accrual basis of accounting?

When cash is paid to suppliers on account, which section of the Statement of Cash Flows is affected?

Which of the following assets never loses its ability to provide service and, as a result, does not need to be depreciated?

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Which of the following transactions will affect the liquidity metric of a company?