Exam 4: Accrual Accounting Concepts

Wang Company had the following transactions during 2021: -Sales of $10,800 on account -Collected $4,800 for services to be performed in 2022 -Paid $2,600 cash in salaries -Purchased airline tickets for $600 in December for a trip to take place in 2022 What is Wang's 2021 net income using cash basis accounting?

Skypress Company collected $11,200 in September of 2021 for 4 months of service which would take place from October of 2021 through January of 2022.The revenue reported from this transaction during 2022 would be:

At March 1, I.Repo Inc.reported a balance in Supplies of $200.During March, the company purchased supplies for $950 and consumed supplies of $800.If no adjusting entry is made for supplies:

The revenue recognition principle dictates that revenue should be recognized in the accounting records:

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be:

The worksheet does not contain columns for the:

The following information is from the Income Statement of Ike's Lawn Service for the quarter ending September 2022: The balance in Retained Earnings at July 1 was $3,200.Ike's distributed dividends of $2,200 during the period.After closing revenue and expenses, Income Summary will have a balance of

Which trial balance will consist of the greatest number of accounts?

Beringer Company places an order for supplies with Picasso Company on December 17.Picasso delivers the supplies on December 20 and invoices Beringer on December 21.Beringer pays the invoice on December 29.On what date does Picasso satisfy its performance obligation?

Why do generally accepted accounting principles require the application of the revenue recognition principle?

The adjusting entry to an unearned revenue account will

The only accounts that are closed are temporary accounts.

The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is:

Raxon Company borrowed $50,000 from the bank signing a 6%, 3-month note on September 1.Principal and interest are payable to the bank on December 1.If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be:

A law firm received $2,000 cash for legal services to be rendered in the future.The full amount was credited to the liability account Unearned Service Revenue.If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause:

The primary difference between prepaid and accrued expenses is that prepaid expenses have:

The first required step in the accounting cycle is:

From an accounting standpoint, the acquisition of long-lived assets is essentially a(n):

On November 1, 2021, Weller Industries, which uses a calendar year as its fiscal year, signs a $30,000, 7%, six-month note payable.Which of the following entries correctly records the payment of the note and entire interest on May 1, 2022?

The following information is from the Income Statement of Ike's Lawn Service for the quarter ending September 2022: The balance in Retained Earnings at July 1 was $3,200.Ike's distributed dividends of $2,200 during the period.After closing entries have been posted, Retained Earnings will have a balance of