Question 1

Accrued expenses are expenses that have been incurred and paid.

Accepted Answer

A) True 
 B)False

Question 2

From the following data for David ProElecticals, calculate the quick ratio. $$\begin{array} { l r } 
\text { Cash } & \$ 68,500 \
\text { Accounts receivable } & 130,000 \
\text { Inventories } & 213,000 \
\text { Prepaid expenses } & 25,000 \
\text { Total current assets } & \$ 436,500 \
\text { Less current liabilities } & \underline { 275,000 } \
\text { Working capital } & \$ 161,500
\end{array}$$

Accepted Answer

A)  1.6 
B)  0.7 
C)  0.3 
D)  1.5 
A)  1.6 
B)  0.7 
C)  0.3 
D)  1.5

Question 3

When cash is received in payment of an account receivable, 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 4

Expenses not related to the primary operations of the business are sometimes reported as:

Accepted Answer

A)  administrative expense. 
B)  operating expense. 
C)  other expense. 
D)  all of these. 
A)  administrative expense. 
B)  operating expense. 
C)  other expense. 
D)  all of these.

Question 5

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.
On June 1, Carter Lights Corp.borrowed $38,000 from the bank by signing a promissory note from the bank, with 7% interest.The note is due in three months.Interest for June has been incurred but not yet recorded.The interest to accrue for June is $180.The June 30 adjustment is:

Accepted Answer

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

Question 6

On April 1, Tenity, Inc.paid $3,300 for an insurance premium on a three-year insurance policy.At the end of December, Tenity's fiscal year-end, what should be the balance in the prepaid insurance account?

Accepted Answer

A)  $1,100 
B)  $2,475 
C)  $3,300 
D)  $2,200 
A)  $1,100 
B)  $2,475 
C)  $3,300 
D)  $2,200

Question 7

To determine cash payments for operating expenses for the cash flow statement using the direct method, depreciation expense is added to net income.

Accepted Answer

A) True 
 B)False

Question 8

Perill Co.has a five-day workweek (Monday through Friday).Employees earn $650 per day.How much cash will be paid on Friday?​

Accepted Answer

A)  ​$650 
B)  ​$1,950 
C)  ​$1,300 
D)  ​$3,250 
A)  ​$650 
B)  ​$1,950 
C)  ​$1,300 
D)  ​$3,250

Question 9

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 Mover Lights Corp.pays salaries on the 28th of each month.Light stuffers earn $280/day with a 7-day work week.June 30th is the end of the accounting period.Light stuffers have worked on the 28th, 29th, and 30th but have not yet been paid for those days.The June 30 adjustment is:

Accepted Answer

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

Question 10

Which of the following metrics is affected when a business makes prepayment of rent? ​

Accepted Answer

A)  ​Profitability 
B)  ​Leverage 
C)  ​Liquidity 
D)  ​Contingency 
A)  ​Profitability 
B)  ​Leverage 
C)  ​Liquidity 
D)  ​Contingency

Question 11

_____ is the process that begins with analyzing transactions and ends with preparing financial statements.

Accepted Answer

A)  Liquidity reporting 
B)  The accounting cycle 
C)  Amortization of accounts 
D)  Cost reporting 
A)  Liquidity reporting 
B)  The accounting cycle 
C)  Amortization of accounts 
D)  Cost reporting

Question 12

Under the balance sheet classification of property, plant, and equipment, some accounts need adjustment and others do not.Which do and why? Which do not and why?

Accepted Answer

Plant and equipment both need an adjustm

Question 13

The accrual basis of accounting recognizes:

Accepted Answer

A)  revenues when cash is received and expenses when cash is paid. 
B)  revenues when earned and expenses when cash is paid. 
C)  revenues when cash is received and expenses when incurred. 
D)  revenues when earned and expenses when incurred. 
A)  revenues when cash is received and expenses when cash is paid. 
B)  revenues when earned and expenses when cash is paid. 
C)  revenues when cash is received and expenses when incurred. 
D)  revenues when earned and expenses when incurred.

Question 14

Expenses on the income statement are assets used up or services consumed in the process of generating revenues.

Accepted Answer

A) True 
 B)False

Question 15

XYZ Co.paid $1,000 in dividends to stockholders.How does this transaction affect the accounts of XYZ?

Accepted Answer

A)  Cash will decrease by $1,000 and retained earnings will decrease by $1,000. 
B)  Cash will decrease by $1,000 and expenses will increase $1,000. 
C)  Cash will decrease by $1,000 and revenues will decrease $1,000. 
D)  Net income will decrease by $1,000. 
A)  Cash will decrease by $1,000 and retained earnings will decrease by $1,000. 
B)  Cash will decrease by $1,000 and expenses will increase $1,000. 
C)  Cash will decrease by $1,000 and revenues will decrease $1,000. 
D)  Net income will decrease by $1,000.

Question 16

When are sales recognized under the cash basis of accounting? When are expenses recognized?

Accepted Answer

Under the cash basis of accounting, the

Question 17

On the statement of cash flows, the cash flows from operating activities section would include:

Accepted Answer

A)  receipts from the issuance of common stock. 
B)  receipts from the sale of investments. 
C)  payments for the acquisition of investments. 
D)  cash receipts from sales activities. 
A)  receipts from the issuance of common stock. 
B)  receipts from the sale of investments. 
C)  payments for the acquisition of investments. 
D)  cash receipts from sales activities.

Question 18

Electroyo Corporation's accumulated depreciation increased by $8,500, while patents decreased by $2,800 between consecutive balance sheet dates.There were no purchases or sales of depreciable or intangible assets during the year.In addition, the income statement showed a gain of $5,350 from sale of land.Reconcile a net income of $68,000 to net cash flow from operating activities.

Accepted Answer

The answer of Electroyo Corporation's accumulated depreciation increased by $8,500,...

Question 19

Liabilities that will not be due for more than one year are called long-term liabilities.

Accepted Answer

A) True 
 B)False

Question 20

XYZ Co.received $3,000 in payments from clients for services billed in a previous month.Which accounts will be affected and by what amounts under the accrual basis of accounting?

Accepted Answer

A)  Cash will increase by $3,000 and accounts receivable decrease by $3,000. 
B)  Cash will increase by $3,000 and revenues will increase $3,000. 
C)  Accounts receivable will increase by $3,000 and revenue will increase by $3,000. 
D)  Accounts receivable will increase by $3,000 and cash will increase by $3,000. 
A)  Cash will increase by $3,000 and accounts receivable decrease by $3,000. 
B)  Cash will increase by $3,000 and revenues will increase $3,000. 
C)  Accounts receivable will increase by $3,000 and revenue will increase by $3,000. 
D)  Accounts receivable will increase by $3,000 and cash will increase by $3,000.

Accrued expenses are expenses that have been incurred and paid.

From the following data for David ProElecticals, calculate the quick ratio. Cash \ 68,500 Accounts receivable 130,000 Inventories 213,000 Prepaid expenses 25,000 Total current assets \ 436,500 Less current liabilities Working capital \ 161,500

When cash is received in payment of an account receivable, which section of the Statement of Cash Flows is affected?

Expenses not related to the primary operations of the business are sometimes reported as:

On April 1, Tenity, Inc.paid $3,300 for an insurance premium on a three-year insurance policy.At the end of December, Tenity's fiscal year-end, what should be the balance in the prepaid insurance account?

To determine cash payments for operating expenses for the cash flow statement using the direct method, depreciation expense is added to net income.

Perill Co.has a five-day workweek (Monday through Friday).Employees earn $650 per day.How much cash will be paid on Friday?

Which of the following metrics is affected when a business makes prepayment of rent?

_____ is the process that begins with analyzing transactions and ends with preparing financial statements.

Under the balance sheet classification of property, plant, and equipment, some accounts need adjustment and others do not.Which do and why? Which do not and why?

The accrual basis of accounting recognizes:

Expenses on the income statement are assets used up or services consumed in the process of generating revenues.

XYZ Co.paid $1,000 in dividends to stockholders.How does this transaction affect the accounts of XYZ?

When are sales recognized under the cash basis of accounting? When are expenses recognized?

On the statement of cash flows, the cash flows from operating activities section would include:

Liabilities that will not be due for more than one year are called long-term liabilities.

XYZ Co.received $3,000 in payments from clients for services billed in a previous month.Which accounts will be affected and by what amounts under the accrual basis of accounting?

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

Accrued expenses are expenses that have been incurred and paid.

From the following data for David ProElecticals, calculate the quick ratio. Cash \ 68,500 Accounts receivable 130,000 Inventories 213,000 Prepaid expenses 25,000 Total current assets \ 436,500 Less current liabilities Working capital \ 161,500

When cash is received in payment of an account receivable, which section of the Statement of Cash Flows is affected?

Expenses not related to the primary operations of the business are sometimes reported as:

On April 1, Tenity, Inc.paid $3,300 for an insurance premium on a three-year insurance policy.At the end of December, Tenity's fiscal year-end, what should be the balance in the prepaid insurance account?

To determine cash payments for operating expenses for the cash flow statement using the direct method, depreciation expense is added to net income.

Perill Co.has a five-day workweek (Monday through Friday).Employees earn $650 per day.How much cash will be paid on Friday?​

Which of the following metrics is affected when a business makes prepayment of rent? ​

_____ is the process that begins with analyzing transactions and ends with preparing financial statements.

Under the balance sheet classification of property, plant, and equipment, some accounts need adjustment and others do not.Which do and why? Which do not and why?

The accrual basis of accounting recognizes:

Expenses on the income statement are assets used up or services consumed in the process of generating revenues.

XYZ Co.paid $1,000 in dividends to stockholders.How does this transaction affect the accounts of XYZ?

When are sales recognized under the cash basis of accounting? When are expenses recognized?

On the statement of cash flows, the cash flows from operating activities section would include:

Liabilities that will not be due for more than one year are called long-term liabilities.

XYZ Co.received $3,000 in payments from clients for services billed in a previous month.Which accounts will be affected and by what amounts under the accrual basis of accounting?

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

Perill Co.has a five-day workweek (Monday through Friday).Employees earn $650 per day.How much cash will be paid on Friday?

Which of the following metrics is affected when a business makes prepayment of rent?