Question 1

Prepaid expenses are costs that are paid for before they are used.

Accepted Answer

A) True 
 B)False

Question 2

Prepaid expenses are

Accepted Answer

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

Question 3

Which of the following is not generally an accounting time period?

Accepted Answer

A)  a week 
B)  a month 
C)  a quarter 
D)  a year 
A)  a week 
B)  a month 
C)  a quarter 
D)  a year

Question 4

The adjustment for accrued salaries results from services being paid for after the services are performed.

Accepted Answer

A) True 
 B)False

Question 5

Under the accrual basis of accounting

Accepted Answer

A)  cash must be received before revenue is recognized. 
B)  net income is calculated by matching cash outflows against cash inflows. 
C)  revenue is recognized when earned, while expenses are recognized when incurred to generate revenue. 
D)  the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. 
A)  cash must be received before revenue is recognized. 
B)  net income is calculated by matching cash outflows against cash inflows. 
C)  revenue is recognized when earned, while expenses are recognized when incurred to generate revenue. 
D)  the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.

Question 6

Wong's Tune-Up Shop Limited uses the cash basis of accounting. Wong services a car on May 31. The customer picks up the vehicle on June 1 and mails payment to Wong on June 5. Wong receives the cheque in the mail on June 6. When would Wong recognize the revenue as being earned?

Accepted Answer

A)  June 6 
B)  June 5 
C)  June 1 
D)  May 31 
A)  June 6 
B)  June 5 
C)  June 1 
D)  May 31

Question 7

Adjusting entries are needed

Accepted Answer

A)  to produce relevant financial information. 
B)  only under the cash basis of accounting. 
C)  to update accounts at the beginning of the accounting period. 
D)  for budgeting purposes. 
A)  to produce relevant financial information. 
B)  only under the cash basis of accounting. 
C)  to update accounts at the beginning of the accounting period. 
D)  for budgeting purposes.

Prepaid expenses are costs that are paid for before they are used.

Prepaid expenses are

Which of the following is not generally an accounting time period?

The adjustment for accrued salaries results from services being paid for after the services are performed.

Under the accrual basis of accounting

Wong's Tune-Up Shop Limited uses the cash basis of accounting. Wong services a car on May 31. The customer picks up the vehicle on June 1 and mails payment to Wong on June 5. Wong receives the cheque in the mail on June 6. When would Wong recognize the revenue as being earned?

Adjusting entries are needed

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 4: Accrual Accounting Concepts

Prepaid expenses are costs that are paid for before they are used.

Prepaid expenses are

Which of the following is not generally an accounting time period?

The adjustment for accrued salaries results from services being paid for after the services are performed.

Under the accrual basis of accounting

Wong's Tune-Up Shop Limited uses the cash basis of accounting. Wong services a car on May 31. The customer picks up the vehicle on June 1 and mails payment to Wong on June 5. Wong receives the cheque in the mail on June 6. When would Wong recognize the revenue as being earned?

Adjusting entries are needed

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters