Question 1

A 10-column worksheet is a permanent accounting record.

Accepted Answer

A) True 
 B)False

Question 2

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Accepted Answer

A) True 
 B)False

Question 3

An accounting time period that is one year in length is called:

Accepted Answer

A)  a fiscal year. 
B)  an interim period. 
C)  the time period assumption. 
D)  a reporting period. 
A)  a fiscal year. 
B)  an interim period. 
C)  the time period assumption. 
D)  a reporting period.

Question 4

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

Accepted Answer

A)  accrual of expense. 
B)  accrual of revenue. 
C)  accrual of unearned revenue. 
D)  prepaid expense. 
A)  accrual of expense. 
B)  accrual of revenue. 
C)  accrual of unearned revenue. 
D)  prepaid expense.

Question 5

Prepare adjusting entries for the following transactions. Omit explanations.
1. Depreciation on equipment is $1,340 for the accounting period.
2. Interest owed on a loan but not paid or recorded is $275.
3. There was no beginning balance of supplies and $550 of office supplies were purchased during the period. At the end of the period $100 of supplies were on hand.
4. Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $700 had expired.
5. Accrued salaries at the end of the period amounted to $900.

Accepted Answer

The answer of Prepare adjusting entries for the following transactions....

Question 6

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

Accepted Answer

A)  revenue. 
B)  liability. 
C)  expense. 
D)  prepaid expense. 
A)  revenue. 
B)  liability. 
C)  expense. 
D)  prepaid expense.

Question 7

The Scarlet Pages, a semi-professional hockey team, prepare financial statements on a monthly basis. Their season begins in October, but in September the team engaged in the following transactions:
(a) Paid $150,000 to Oklahoma City as advance rent for use of Oklahoma City Arena for the six-month period October 1 through March 31.
(b) Collected $450,000 cash from sales of season tickets for the team's 30 home games. This amount was credited to Unearned Ticket Revenue.
(c) During the month of October, the Scarlet Pages played five home games.
Instructions:
Prepare the adjusting entries required at October 31 for the transactions above.

Accepted Answer

The answer of The Scarlet Pages, a semi-professional hockey team,...

Question 8

Which statement is correct?

Accepted Answer

A)  As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use. 
B)  The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles. 
C)  The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received. 
D)  As long as management is ethical, there are no problems with using the cash basis of accounting. 
A)  As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use. 
B)  The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles. 
C)  The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received. 
D)  As long as management is ethical, there are no problems with using the cash basis of accounting.

Question 9

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

Accepted Answer

A)  Salaries and Wages Expense for the year is overstated. 
B)  Liabilities at the end of the year are understated. 
C)  Assets at the end of the year are understated. 
D)  Stockholders' equity at the end of the year is understated. 
A)  Salaries and Wages Expense for the year is overstated. 
B)  Liabilities at the end of the year are understated. 
C)  Assets at the end of the year are understated. 
D)  Stockholders' equity at the end of the year is understated.

Question 10

The following information is from the Income Statement of the Dirt Poor Laundry Service:   The entry to close the Income Summary includes a:

Accepted Answer

A)  credit to Income Summary for $2,450. 
B)  debit to Income Summary for $2,450. 
C)  debit to Retained Earnings for $2,450. 
D)  credit to Common Stock for $2,450. 
A)  credit to Income Summary for $2,450. 
B)  debit to Income Summary for $2,450. 
C)  debit to Retained Earnings for $2,450. 
D)  credit to Common Stock for $2,450.

Question 11

Mary Richardo has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Mary make?

Accepted Answer

A)  Debit Cash and credit Unearned Service Revenue 
B)  Debit Accounts Receivable and credit Unearned Service Revenue 
C)  Debit Accounts Receivable and credit Service Revenue 
D)  Debit Unearned Service Revenue and credit Service Revenue 
A)  Debit Cash and credit Unearned Service Revenue 
B)  Debit Accounts Receivable and credit Unearned Service Revenue 
C)  Debit Accounts Receivable and credit Service Revenue 
D)  Debit Unearned Service Revenue and credit Service Revenue

Question 12

The expense recognition principle requires that efforts be related to accomplishments.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  $6,340. 
B)  $6,512. 
C)  $6,880. 
D)  $6,708. 
A)  $6,340. 
B)  $6,512. 
C)  $6,880. 
D)  $6,708.

Question 14

Financial statements can be prepared from the information provided by an adjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 15

Greese Company purchased office supplies costing $4,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

Accepted Answer

A)  debit Supplies Expense, $1,500; credit Supplies, $1,500. 
B)  debit Supplies, $2,500; credit Supplies Expense, $2,500. 
C)  debit Supplies Expense, $2,500; credit Supplies, $2,500. 
D)  debit Supplies, $1,500; credit Supplies Expense, $1,500. 
A)  debit Supplies Expense, $1,500; credit Supplies, $1,500. 
B)  debit Supplies, $2,500; credit Supplies Expense, $2,500. 
C)  debit Supplies Expense, $2,500; credit Supplies, $2,500. 
D)  debit Supplies, $1,500; credit Supplies Expense, $1,500.

Question 16

On January 1, the Biddle & Biddle, CPAs received a $7,500 cash retainer for accounting services to be provided rateably over the next 3 months. The full amount was credited to the liability account Service Unearned Revenue. Assuming that the revenue is recognized rateably over the 3 month period, what adjusting journal entry should be made at January 31?

Accepted Answer

Unearned Service Rev

Question 17

An adjusting entry:

Accepted Answer

A)  affects two balance sheet accounts. 
B)  affects two income statement accounts. 
C)  affects a balance sheet account and an income statement account. 
D)  is always a compound entry. 
A)  affects two balance sheet accounts. 
B)  affects two income statement accounts. 
C)  affects a balance sheet account and an income statement account. 
D)  is always a compound entry.

Question 18

A company spends $20 million dollars for an office building. Over what period should the cost be written off?

Accepted Answer

A)  When the $20 million is expended in cash. 
B)  All in the first year. 
C)  After $20 million in revenue is earned. 
D)  None of these answer choices are correct. 
A)  When the $20 million is expended in cash. 
B)  All in the first year. 
C)  After $20 million in revenue is earned. 
D)  None of these answer choices are correct.

Question 19

Expenses paid and recorded in an asset account before they are used or consumed are called _______________. Revenue received and recorded as a liability before it is earned is referred to as _________________.

Accepted Answer

prepaid ex

Question 20

Accrued expenses are:

Accepted Answer

A)  incurred but not yet paid or recorded. 
B)  paid and recorded in an asset account after they are used or consumed. 
C)  paid and recorded in an asset account before they are used or consumed. 
D)  incurred and already paid or recorded. 
A)  incurred but not yet paid or recorded. 
B)  paid and recorded in an asset account after they are used or consumed. 
C)  paid and recorded in an asset account before they are used or consumed. 
D)  incurred and already paid or recorded.

A 10-column worksheet is a permanent accounting record.

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

An accounting time period that is one year in length is called:

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

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

Which statement is correct?

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

The following information is from the Income Statement of the Dirt Poor Laundry Service: The entry to close the Income Summary includes a:

Mary Richardo has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Mary make?

The expense recognition principle requires that efforts be related to accomplishments.

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

Financial statements can be prepared from the information provided by an adjusted trial balance.

Greese Company purchased office supplies costing $4,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

An adjusting entry:

A company spends $20 million dollars for an office building. Over what period should the cost be written off?

Expenses paid and recorded in an asset account before they are used or consumed are called _. Revenue received and recorded as a liability before it is earned is referred to as ___.

Accrued expenses are:

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 and Acquisitions in Accounting

Filters

Exam 4: Accrual Accounting Concepts

A 10-column worksheet is a permanent accounting record.

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

An accounting time period that is one year in length is called:

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

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

Which statement is correct?

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

The following information is from the Income Statement of the Dirt Poor Laundry Service: The entry to close the Income Summary includes a:

Mary Richardo has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Mary make?

The expense recognition principle requires that efforts be related to accomplishments.

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

Financial statements can be prepared from the information provided by an adjusted trial balance.

Greese Company purchased office supplies costing $4,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

An adjusting entry:

A company spends $20 million dollars for an office building. Over what period should the cost be written off?

Expenses paid and recorded in an asset account before they are used or consumed are called _______________. Revenue received and recorded as a liability before it is earned is referred to as _________________.

Accrued expenses are:

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 and Acquisitions in Accounting

Filters

Expenses paid and recorded in an asset account before they are used or consumed are called _. Revenue received and recorded as a liability before it is earned is referred to as ___.