Question 1

The updating of accrual accounting records before preparing financial statements is referred to as the:

Accepted Answer

A)  consolidation process. 
B)  full disclosure process. 
C)  adjustment process. 
D)  money measurement process. 
A)  consolidation process. 
B)  full disclosure process. 
C)  adjustment process. 
D)  money measurement process.

Question 2

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be:

Accepted Answer

A)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities. 
B)  added to net income in converting the net income reported on the income statement to cash flows from operating activities. 
C)  added to cash received from the sale to determine cash flows from investing activities. 
D)  deducted from cash received from the sale to determine cash flows from investing activities. 
A)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities. 
B)  added to net income in converting the net income reported on the income statement to cash flows from operating activities. 
C)  added to cash received from the sale to determine cash flows from investing activities. 
D)  deducted from cash received from the sale to determine cash flows from investing activities.

Question 3

The unearned rent account has a balance of $60,000.If $4,000 of the $60,000 is unearned at the end of the accounting period, the amount of the adjusting entry is:

Accepted Answer

A)  $64,000. 
B)  $56,000. 
C)  $60,000. 
D)  $4,000. 
A)  $64,000. 
B)  $56,000. 
C)  $60,000. 
D)  $4,000.

Question 4

_____ represent rights of a long-term nature, such as patent rights, copyrights, and goodwill.

Accepted Answer

A)  Accrued revenues 
B)  Intangible assets 
C)  Retained earnings 
D)  Long-term liabilities 
A)  Accrued revenues 
B)  Intangible assets 
C)  Retained earnings 
D)  Long-term liabilities

Question 5

The net income reported on the income statement for the current year was $310,000.Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively.Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: $$\begin{array} { l r r } 
& \underline { \text { End } } & \text { Beginning } \
\text { Cash } & \$ 50,000 & \$ 60,000 \
\text { Accounts receivable } & 112,000 & 108,000 \
\text { Inventories } & 105,000 & 93,000 \
\text { Prepaid expenses } & 4,500 & 6,500 \
\text { Accounts payable (merchandise creditors) } & 75,000 & 89,000
\end{array}$$ What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Accepted Answer

A)  $233,000 
B)  $289,000 
C)  $387,000 
D)  $331,000 
A)  $233,000 
B)  $289,000 
C)  $387,000 
D)  $331,000

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, Tasty Sausage Corp.has a balance of $100 for supplies.On June 6 it purchased $600 in supplies for cash.On June 30, at the end of the accounting period, there are $300 of supplies on hand.The June 30
adjustment is: $$\begin{array} { | l | c | c | c | c | c | c | } 
\hline &{ \text { Assets = } } &&& { \text { Liabilities + Stockholders' Equity } } \
\hline & \text { Cash } & \text { Supplies } & \begin{array} { c } 
\text { Office } \
\text { Equipment }
\end{array} & \begin{array} { c } 
\text { Accounts } \
\text { Payable }
\end{array} & \begin{array} { c } 
\text { Common } \
\text { Stock }
\end{array} & \begin{array} { c } 
\text { Retained } \
\text { Earnings }
\end{array} \
\hline \text { Beg. Bal. } & - 100 & 100 & & & & \
\hline \begin{array} { l } 
\text { Supplies } \
\text { purchased }
\end{array} & - 600 & 600 & & & & \
\hline \text { End. Bal. } & - 700 & 700 & & & & \
\hline
\end{array}$$ ​

Accepted Answer

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

Question 7

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

Accepted Answer

A) True 
 B)False

Question 8

The expired amount of a prepaid expense is recorded as:

Accepted Answer

A)  accrued revenue. 
B)  a contra asset. 
C)  a liability. 
D)  an expense. 
A)  accrued revenue. 
B)  a contra asset. 
C)  a liability. 
D)  an expense.

Question 9

Land is an example of a current asset.

Accepted Answer

A) True 
 B)False

Question 10

Why is a physical count of supplies necessary at the end of the accounting period?

Accepted Answer

The beginning balance in supplies will b

Question 11

On June 1, Unidevo, Inc.purchased $1,700 worth of supplies on account.Prior to the purchase, the balance in the supplies account was $0.On December 31, the fiscal year-end for Unidevo, it is determined that $800 of supplies still remain.What is the balance in the supplies account after adjustment?

Accepted Answer

A)  $800 
B)  $900 
C)  $0 
D)  $1,700 
A)  $800 
B)  $900 
C)  $0 
D)  $1,700

Question 12

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

Accepted Answer

A)  Increase Salaries Expense $200 and increase Salaries Payable $200 
B)  Increase Salaries Expense $50 and increase Salaries Payable $50 
C)  Increase Salaries Payable $200 and increase Cash $200 
D)  Increase Salaries Expense $250 and increase Cash $250 
A)  Increase Salaries Expense $200 and increase Salaries Payable $200 
B)  Increase Salaries Expense $50 and increase Salaries Payable $50 
C)  Increase Salaries Payable $200 and increase Cash $200 
D)  Increase Salaries Expense $250 and increase Cash $250

Question 13

The quick ratio is computed as _____.

Accepted Answer

A)  quick assets divided by current liabilities 
B)  quick assets divided by current assets 
C)  current assets divided by stockholders' equity 
D)  current liabilities divided by current assets 
A)  quick assets divided by current liabilities 
B)  quick assets divided by current assets 
C)  current assets divided by stockholders' equity 
D)  current liabilities divided by current assets

Question 14

A&M Co.provided services of $1,000,000 to clients on account.How does this transaction affect A&M's accounts?

Accepted Answer

A)  Increase accounts receivable and cash by $1,000,000 each 
B)  Increase accounts receivable and revenues by $1,000,000 each 
C)  Increase accounts receivable and unearned revenues by $1,000,000 each 
D)  Increase cash and decrease accounts receivable by $1,000,000 each 
A)  Increase accounts receivable and cash by $1,000,000 each 
B)  Increase accounts receivable and revenues by $1,000,000 each 
C)  Increase accounts receivable and unearned revenues by $1,000,000 each 
D)  Increase cash and decrease accounts receivable by $1,000,000 each

Question 15

Which of the following is an example of an intangible asset?

Accepted Answer

A)  Goodwill 
B)  Patents 
C)  Copyrights 
D)  All of these 
A)  Goodwill 
B)  Patents 
C)  Copyrights 
D)  All of these

Question 16

Using accrual accounting, revenue is recorded and reported only:

Accepted Answer

A)  when cash is received without regard to when the services are rendered. 
B)  when the services are rendered without regard to when cash is received. 
C)  when cash is received before services are rendered. 
D)  if cash is received after the services are rendered. 
A)  when cash is received without regard to when the services are rendered. 
B)  when the services are rendered without regard to when cash is received. 
C)  when cash is received before services are rendered. 
D)  if cash is received after the services are rendered.

Question 17

-Refer to Coke's Statement of Cash Flows.What amount of depreciation and amortization did Coke record in 2008?

Accepted Answer

Coke recorded depreciation and

Question 18

If land costing $75,000 was sold for $135,000, the amount reported in the investing activities section of the statement of cash flows would be $135,000.

Accepted Answer

A) True 
 B)False

Question 19

BlueInk Corporation's accumulated depreciation increased by $14,000, while patents decreased by $3,875 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 loss on sale of land of $1,950.Accounts receivable increased $6,320, inventory decreased $3,125, prepaid expenses decreased $720, and account payable increased $2,760.Reconcile a net income of $55,000 to net cash flow from operating activities.

Accepted Answer

The answer of BlueInk Corporation's accumulated depreciation increased by $14,000,...

Question 20

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in:

Accepted Answer

A)  the cash flows from financing activities section. 
B)  the cash flows from investing activities section. 
C)  a separate schedule. 
D)  the cash flows from operating activities section. 
A)  the cash flows from financing activities section. 
B)  the cash flows from investing activities section. 
C)  a separate schedule. 
D)  the cash flows from operating activities section.

The updating of accrual accounting records before preparing financial statements is referred to as the:

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be:

The unearned rent account has a balance of $60,000.If $4,000 of the $60,000 is unearned at the end of the accounting period, the amount of the adjusting entry is:

_____ represent rights of a long-term nature, such as patent rights, copyrights, and goodwill.

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

The expired amount of a prepaid expense is recorded as:

Land is an example of a current asset.

Why is a physical count of supplies necessary at the end of the accounting period?

On June 1, Unidevo, Inc.purchased $1,700 worth of supplies on account.Prior to the purchase, the balance in the supplies account was $0.On December 31, the fiscal year-end for Unidevo, it is determined that $800 of supplies still remain.What is the balance in the supplies account after adjustment?

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

The quick ratio is computed as _____.

A&M Co.provided services of $1,000,000 to clients on account.How does this transaction affect A&M's accounts?

Which of the following is an example of an intangible asset?

Using accrual accounting, revenue is recorded and reported only:

-Refer to Coke's Statement of Cash Flows.What amount of depreciation and amortization did Coke record in 2008?

If land costing $75,000 was sold for $135,000, the amount reported in the investing activities section of the statement of cash flows would be $135,000.

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in:

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

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Exam 3: Basic Accounting Systems: Accrual Basis

The updating of accrual accounting records before preparing financial statements is referred to as the:

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be:

The unearned rent account has a balance of $60,000.If $4,000 of the $60,000 is unearned at the end of the accounting period, the amount of the adjusting entry is:

_____ represent rights of a long-term nature, such as patent rights, copyrights, and goodwill.

It is easy to objectively determine the physical decline in the ability of fixed assets to provide service.

The expired amount of a prepaid expense is recorded as:

Land is an example of a current asset.

Why is a physical count of supplies necessary at the end of the accounting period?

On June 1, Unidevo, Inc.purchased $1,700 worth of supplies on account.Prior to the purchase, the balance in the supplies account was $0.On December 31, the fiscal year-end for Unidevo, it is determined that $800 of supplies still remain.What is the balance in the supplies account after adjustment?

Speedy Company's weekly payroll of $250 is paid on Fridays (five-day work week).Assume that the last day of the month falls on Thursday.Which of the following is the required month-end adjusting entry?

The quick ratio is computed as _____.

A&M Co.provided services of $1,000,000 to clients on account.How does this transaction affect A&M's accounts?

Which of the following is an example of an intangible asset?

Using accrual accounting, revenue is recorded and reported only:

-Refer to Coke's Statement of Cash Flows.What amount of depreciation and amortization did Coke record in 2008?

If land costing $75,000 was sold for $135,000, the amount reported in the investing activities section of the statement of cash flows would be $135,000.

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in:

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