Question 1

Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

Accepted Answer

A) $7,496 
B) $7,218 
C) $7,444 
D) $7,270 
A) $7,496 
B) $7,218 
C) $7,444 
D) $7,270

Question 2

A customer paid $60,000 to Foley Marketing on December 30, 2020, to perform services from January 1, 2021 through December 31, 2024.If Foley fails to record the revenue that should be recognized, ________ would be understated by ________ each year.

Accepted Answer

A) net income, $15,000 
B) net income, $12,000 
C) liabilities, $15,000 
D) assets, $12,000 
A) net income, $15,000 
B) net income, $12,000 
C) liabilities, $15,000 
D) assets, $12,000

Question 3

Why was Apple required to spread their iPhone revenues over a two-year period?

Accepted Answer

A) Because of its newness, their returns might exceed the normal level of returns. 
B) Because they were required to provide software updates over that two year period. 
C) Because that was the estimated life of the iPhone. 
D) Because they needed to defer revenue recognition since they had a swap program available for future models. 
A) Because of its newness, their returns might exceed the normal level of returns. 
B) Because they were required to provide software updates over that two year period. 
C) Because that was the estimated life of the iPhone. 
D) Because they needed to defer revenue recognition since they had a swap program available for future models.

Question 4

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the:

Accepted Answer

A) market value of the asset. 
B) blue book value of the asset. 
C) book value of the asset. 
D) depreciated difference of the asset. 
A) market value of the asset. 
B) blue book value of the asset. 
C) book value of the asset. 
D) depreciated difference of the asset.

Question 5

Can financial statements be prepared directly from the adjusted trial balance?

Accepted Answer

A) They cannot.The general ledger must be used. 
B) Yes, the adjusted trial balance shows the adjusted balances from the general ledger. 
C) No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted.It has no other purpose. 
D) They can because that is the only reason that an adjusted trial balance is prepared. 
A) They cannot.The general ledger must be used. 
B) Yes, the adjusted trial balance shows the adjusted balances from the general ledger. 
C) No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted.It has no other purpose. 
D) They can because that is the only reason that an adjusted trial balance is prepared.

Question 6

Darting Company purchased equipment for $9,000 on January 1, 2022.The company expects to use the equipment for 3 years.It has no salvage value.Monthly depreciation expense on the asset is:

Accepted Answer

A) $0. 
B) $250. 
C) $3,000. 
D) $9,000. 
A) $0. 
B) $250. 
C) $3,000. 
D) $9,000.

Question 7

Depreciation is the process of:

Accepted Answer

A) valuing an asset at its fair value. 
B) increasing the value of an asset over the periods in which it is used. 
C) allocating the cost of an asset to the periods in which it is used. 
D) writing down an asset to its real value each accounting period. 
A) valuing an asset at its fair value. 
B) increasing the value of an asset over the periods in which it is used. 
C) allocating the cost of an asset to the periods in which it is used. 
D) writing down an asset to its real value each accounting period.

Question 8

Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting.

Accepted Answer

A) $19,000 
B) $28,000 
C) $21,000 
D) $12,000 
A) $19,000 
B) $28,000 
C) $21,000 
D) $12,000

Question 9

Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

Accepted Answer

A) $3,635 
B) $3,609 
C) $3,748 
D) $3,722 
A) $3,635 
B) $3,609 
C) $3,748 
D) $3,722

Question 10

Which of the statements below is not true?

Accepted Answer

A) An adjusted trial balance should show ledger account balances. 
B) An adjusted trial balance can be used to prepare financial statements. 
C) An adjusted trial balance proves the mathematical equality of debits and credits in the ledger. 
D) An adjusted trial balance is prepared before all transactions have been journalized. 
A) An adjusted trial balance should show ledger account balances. 
B) An adjusted trial balance can be used to prepare financial statements. 
C) An adjusted trial balance proves the mathematical equality of debits and credits in the ledger. 
D) An adjusted trial balance is prepared before all transactions have been journalized.

Question 11

Given the following adjusted trial balance:   After closing entries have been posted, the balance in retained earnings will be:

Accepted Answer

A) $6,440. 
B) $6,612. 
C) $6,980. 
D) $6,808. 
A) $6,440. 
B) $6,612. 
C) $6,980. 
D) $6,808.

Question 12

The Accounts Receivable account has a beginning balance of $52,000 and an ending balance of $74,000.If total sales on account were $42,000 for the year, what were the total collections on account?

Accepted Answer

A) $20,000 
B) $64,000 
C) $74,000 
D) $84,000 
A) $20,000 
B) $64,000 
C) $74,000 
D) $84,000

Question 13

Accumulated Depreciation is a(n):

Accepted Answer

A) expense account. 
B) stockholders' equity account. 
C) liability account. 
D) contra asset account. 
A) expense account. 
B) stockholders' equity account. 
C) liability account. 
D) contra asset account.

Question 14

An adjusting entry to a prepaid expense is required to recognize expired expenses.

Accepted Answer

A) True 
 B)False

Question 15

Under the cash basis of accounting:

Accepted Answer

A) revenue is recognized when services are performed. 
B) expenses are matched with the revenue that is produced. 
C) cash must be received before revenue is recognized. 
D) a promise to pay is sufficient to recognize revenue. 
A) revenue is recognized when services are performed. 
B) expenses are matched with the revenue that is produced. 
C) cash must be received before revenue is recognized. 
D) a promise to pay is sufficient to recognize revenue.

Question 16

A flower shop makes a large sale for $1,000 on November 30.The customer is sent a statement on December 5 and a check is received on December 10.The flower shop follows GAAP and applies the revenue recognition principle.When is the $1,000 considered to be recognized?

Accepted Answer

A) December 5 
B) December 10 
C) November 30 
D) December 1 
A) December 5 
B) December 10 
C) November 30 
D) December 1

Question 17

Kingman Consulting uses the cash basis of accounting and a fiscal year ending December 31.Beginning on September 1, 2021, Kingman performs services for Renfro International at a rate of $5,000 per month.On February 12, 2022, Renfro pays Kingman $25,000 in full for all services rendered from September 1, 2021 to January 31, 2022.Kingman understated revenues by ________ on its 2021 income statement.

Accepted Answer

A) $20,000 
B) $5,000 
C) $25,000 
D) $15,000 
A) $20,000 
B) $5,000 
C) $25,000 
D) $15,000

Question 18

Given the following adjusted trial balance:   Net income for the year is:

Accepted Answer

A) $99. 
B) $184. 
C) $212. 
D) $298. 
A) $99. 
B) $184. 
C) $212. 
D) $298.

Question 19

The following information is from the Income Statement of the Campus Laundry Service:   The entry to close the expense accounts includes a:

Accepted Answer

A) credit to Income Summary for $3,550. 
B) debit to Income Summary for $3,550. 
C) debit to Salaries and Wages Expense for $2,450. 
D) credit to Retained Earnings for $3,550. 
A) credit to Income Summary for $3,550. 
B) debit to Income Summary for $3,550. 
C) debit to Salaries and Wages Expense for $2,450. 
D) credit to Retained Earnings for $3,550.

Question 20

Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause:

Accepted Answer

A) net income to be understated. 
B) an overstatement of assets and an overstatement of liabilities. 
C) an understatement of expenses and an understatement of liabilities. 
D) an overstatement of expenses and an overstatement of liabilities. 
A) net income to be understated. 
B) an overstatement of assets and an overstatement of liabilities. 
C) an understatement of expenses and an understatement of liabilities. 
D) an overstatement of expenses and an overstatement of liabilities.

Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

A customer paid $60,000 to Foley Marketing on December 30, 2020, to perform services from January 1, 2021 through December 31, 2024.If Foley fails to record the revenue that should be recognized, would be understated by each year.

Why was Apple required to spread their iPhone revenues over a two-year period?

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the:

Can financial statements be prepared directly from the adjusted trial balance?

Darting Company purchased equipment for $9,000 on January 1, 2022.The company expects to use the equipment for 3 years.It has no salvage value.Monthly depreciation expense on the asset is:

Depreciation is the process of:

Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting.

Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

Which of the statements below is not true?

Given the following adjusted trial balance: After closing entries have been posted, the balance in retained earnings will be:

The Accounts Receivable account has a beginning balance of $52,000 and an ending balance of $74,000.If total sales on account were $42,000 for the year, what were the total collections on account?

Accumulated Depreciation is a(n):

An adjusting entry to a prepaid expense is required to recognize expired expenses.

Under the cash basis of accounting:

A flower shop makes a large sale for $1,000 on November 30.The customer is sent a statement on December 5 and a check is received on December 10.The flower shop follows GAAP and applies the revenue recognition principle.When is the $1,000 considered to be recognized?

Given the following adjusted trial balance: Net income for the year is:

The following information is from the Income Statement of the Campus Laundry Service: The entry to close the expense accounts includes a:

Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 4: Accrual Accounting Concepts

Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

A customer paid $60,000 to Foley Marketing on December 30, 2020, to perform services from January 1, 2021 through December 31, 2024.If Foley fails to record the revenue that should be recognized, ________ would be understated by ________ each year.

Why was Apple required to spread their iPhone revenues over a two-year period?

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the:

Can financial statements be prepared directly from the adjusted trial balance?

Darting Company purchased equipment for $9,000 on January 1, 2022.The company expects to use the equipment for 3 years.It has no salvage value.Monthly depreciation expense on the asset is:

Depreciation is the process of:

Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting.

Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

Which of the statements below is not true?

Given the following adjusted trial balance: After closing entries have been posted, the balance in retained earnings will be:

The Accounts Receivable account has a beginning balance of $52,000 and an ending balance of $74,000.If total sales on account were $42,000 for the year, what were the total collections on account?

Accumulated Depreciation is a(n):

An adjusting entry to a prepaid expense is required to recognize expired expenses.

Under the cash basis of accounting:

A flower shop makes a large sale for $1,000 on November 30.The customer is sent a statement on December 5 and a check is received on December 10.The flower shop follows GAAP and applies the revenue recognition principle.When is the $1,000 considered to be recognized?

Given the following adjusted trial balance: Net income for the year is:

The following information is from the Income Statement of the Campus Laundry Service: The entry to close the expense accounts includes a:

Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

A customer paid $60,000 to Foley Marketing on December 30, 2020, to perform services from January 1, 2021 through December 31, 2024.If Foley fails to record the revenue that should be recognized, would be understated by each year.