Exam 4: Accrual Accounting Concepts

On August 15, 2022, Kinney Industries signs a $200,000, 8%, twelve-month note payable.Which of the following entries correctly records the accrued interest on December 31, 2022?

When closing entries are prepared, each income statement account is closed directly to retained earnings.

The trial balance for Greenway Corporation appears as follows: If, on December 31, 2022, the insurance still unexpired amounted to $20, the adjusting entry would contain a:

The worksheet is:

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 for 2021 -Purchased airline tickets for $600 in December for a trip to take place in 2022 What is Wang's 2021 net income using accrual accounting?

Unearned revenue is classified as a(n):

As prepaid expenses expire with the passage of time, the correct adjusting entry will be a:

The accounts of a business, before an adjusting entry is made to record accrued revenue, reflect an:

The trial balance for Greenway Corporation appears as follows: If as of December 31, 2022, rent of $150 for December had not been recorded or paid, the adjusting entry would include a:

Under the accrual basis of accounting:

Accrued revenues are revenues that have been performed but not yet recorded.

James & Younger Corporation purchased a one-year insurance policy in February 2021 for $42,000.The insurance policy is in effect from March 2021 through February 2022.If the company neglects to make the proper year-end adjustment for the expired insurance:

Under the cash basis of accounting, an amount received from a customer in advance of providing the services would be reported as a(n):

Accrued revenues are:

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

Which of the following is a true statement about closing the books of a corporation?

Given the following adjusted trial balance:

The difference between the balance of a plant asset account and the related accumulated depreciation account is termed:

Which type of accounts will not appear in the post-closing trial balance?

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.Which of the following is not one of the closing entries that the company will make?