Question 1

During November 2015,Asler Inc.performs consulting services.The client does not pay Asler until January,2016.

Accepted Answer

A)  Using the accrual basis of accounting, the revenue is reported in January 2016. 
B)  Using the cash basis of accounting, the revenue is reported in November 2015. 
C)  Using the accrual basis of accounting, the revenue is reported in November 2015. 
D)  Using the accrual basis of accounting, the revenue is reported when Asler's expenses are paid. 
A)  Using the accrual basis of accounting, the revenue is reported in January 2016. 
B)  Using the cash basis of accounting, the revenue is reported in November 2015. 
C)  Using the accrual basis of accounting, the revenue is reported in November 2015. 
D)  Using the accrual basis of accounting, the revenue is reported when Asler's expenses are paid.

Question 2

The following activities took place during the month of July at a corporation that earns service revenue as a law firm.
1.The law firm completes legal work relating to a real estate transaction and is paid $5,500 when the papers are signed.
2.Legal work in the amount of $26,000 is performed on account for customers.
3.A customer makes a payment of $2,500 on account for legal services that were performed last month.
4.A new client calls to request assistance in filing the documents for a patent; a fee of $3,000 is paid and the parties agree that the work will commence next month.
5.A client pays a retainer (deposit)of $15,000 for legal work; one-third of the work is performed in the current month and the remainder will be provided over the next two months.
6.The law firm borrows $10,000 from a local bank.
Required:
For each activity,indicate the amount of revenue that would be recorded in July.

Accepted Answer

1.$5,500
2.$26,000
3.$0; the receipt of

Question 3

If a company is paid in full for services provided this month,how will the basic accounting equation be affected?

Accepted Answer

A)  Liabilities will decrease. 
B)  Stockholders' equity will increase as revenue is recorded. 
C)  Liabilities will increase. 
D)  Assets will decrease. 
A)  Liabilities will decrease. 
B)  Stockholders' equity will increase as revenue is recorded. 
C)  Liabilities will increase. 
D)  Assets will decrease.

Question 4

The following amounts were reported by the two companies:
   
Required:
Part a.Calculate each company's net profit margin expressed as a percent.
Part b Which company has generated a greater return of profit from each revenue dollar?

Accepted Answer

Part a
Net Profit Margin = Net Income ÷

Question 5

When Pizza Company delivers pizza to customers and bills its customer accounts,it should record a debit to ______ and a credit to ______:

Accepted Answer

A)  Accounts Payable; Sales Revenue 
B)  Cash; Sales Revenue 
C)  Accounts Receivable; Unearned Revenue 
D)  Accounts Receivable; Sales Revenue 
A)  Accounts Payable; Sales Revenue 
B)  Cash; Sales Revenue 
C)  Accounts Receivable; Unearned Revenue 
D)  Accounts Receivable; Sales Revenue

Question 6

What type of account is Accounts Receivable?

Accepted Answer

A)  Asset 
B)  Liability 
C)  Expense 
D)  Revenue 
A)  Asset 
B)  Liability 
C)  Expense 
D)  Revenue

Question 7

Which of the following items is reported on the income statement as an expense?

Accepted Answer

A)  This month's cash sales 
B)  The purchase of supplies 
C)  This month's utility bill 
D)  The purchase of land 
A)  This month's cash sales 
B)  The purchase of supplies 
C)  This month's utility bill 
D)  The purchase of land

Question 8

Jim's Gymnastics Training's operations for the month of October are summarized as follows:
A.Provided $5,000 of training to students on account.
B.Received $4,000 cash from students for training provided in October.
C.Received $1,000 cash for training to be provided in November.
D.Received $3,000 cash from students on account for training provided in September.
E.Paid September's gym rental bill on account in the amount of $1,000.
F.Received October's rental bill of $1,500; set it aside.
Required:
Prepare journal entries to record the transactions identified among activities (A)through (F).

Accepted Answer

The answer of Jim's Gymnastics Training's operations for the month...

Question 9

During January 2015, the first month of operations, a consulting firm had following transactions:
1.Issued common stock to owners in exchange for $20,000 cash.
2.Purchased $5,000 of equipment, paying $1,000 cash and signing a promissory note for $4,000.
3.Received $9,000 in cash for consulting services performed in January.
4.Purchased $1,500 of supplies on account; all of the supplies were used in January.
5.Provided consulting services on account in the amount of $16,000.
6.Paid $750 on account.
7.Paid $3,000 to employees for work performed during January.
8.Received a bill for utilities for January of $3,400; the bill remains unpaid.
-Use the information above to answer the following question.What is the amount to be reported as total liabilities on the balance sheet at the end of January?

Accepted Answer

A)  $4,750. 
B)  $4,150. 
C)  $8,150. 
D)  $8,500. 
A)  $4,750. 
B)  $4,150. 
C)  $8,150. 
D)  $8,500.

Question 10

Which of the following is the correct sequence of steps in the accounting cycle?

Accepted Answer

A)  Preparation of journal entries, posting to T-accounts, preparation of financial statements, and preparation of unadjusted trial balance. 
B)  Posting to T-accounts, preparation of journal entries, preparation of unadjusted trial balance, and preparation of financial statements. 
C)  Preparation of journal entries, posting to T-accounts, preparation of unadjusted trial balance, and preparation of financial statements. 
D)  Preparation of financial statements, preparation of journal entries, posting to T-accounts, preparation of unadjusted trial balance. 
A)  Preparation of journal entries, posting to T-accounts, preparation of financial statements, and preparation of unadjusted trial balance. 
B)  Posting to T-accounts, preparation of journal entries, preparation of unadjusted trial balance, and preparation of financial statements. 
C)  Preparation of journal entries, posting to T-accounts, preparation of unadjusted trial balance, and preparation of financial statements. 
D)  Preparation of financial statements, preparation of journal entries, posting to T-accounts, preparation of unadjusted trial balance.

Question 11

Which of the following statements about revenues and expenses is correct?

Accepted Answer

A)  Both revenues and expenses typically have credit balances. 
B)  Revenues and expenses are considered assets and liabilities, respectively. 
C)  Revenue is the same as cash. 
D)  Expenses decrease the amount of stockholders' equity. 
A)  Both revenues and expenses typically have credit balances. 
B)  Revenues and expenses are considered assets and liabilities, respectively. 
C)  Revenue is the same as cash. 
D)  Expenses decrease the amount of stockholders' equity.

Question 12

A company had the following assets and liabilities at the beginning and end of the current year:
 
Common stock in the amount of $15,000 was issued and dividends of $5,000 were paid during the year.What is the amount of net income for the year?

Accepted Answer

A)  $44,000. 
B)  $34,000. 
C)  $24,000. 
D)  $54,000. 
A)  $44,000. 
B)  $34,000. 
C)  $24,000. 
D)  $54,000.

Question 13

Your company receives advance payment in October for services that are provided during November.Which of the following statements is correct?

Accepted Answer

A)  A liability is recorded in October; revenue will be recorded in November. 
B)  Revenue is recorded in October and an expense will be recorded in November. 
C)  An expense is recorded in October; revenue will be recorded in November. 
D)  Revenue and expenses are recorded in October. 
A)  A liability is recorded in October; revenue will be recorded in November. 
B)  Revenue is recorded in October and an expense will be recorded in November. 
C)  An expense is recorded in October; revenue will be recorded in November. 
D)  Revenue and expenses are recorded in October.

Question 14

The period of time from buying goods and services to collecting cash from customers is the accounting cycle.

Accepted Answer

A) True 
 B)False

Question 15

CJ Inc.provides tax services on April 14th.They receive payment for their services on April 29.Which of the following is an appropriate journal entry for April 14th?

Accepted Answer

A)  No journal entry is made until payment is received. 
B)  Debit Unearned Revenue and credit Tax Preparation Revenue. 
C)  Debit Cash and credit Tax Revenue. 
D)  Debit Accounts Receivable and credit Tax Preparation Revenue. 
A)  No journal entry is made until payment is received. 
B)  Debit Unearned Revenue and credit Tax Preparation Revenue. 
C)  Debit Cash and credit Tax Revenue. 
D)  Debit Accounts Receivable and credit Tax Preparation Revenue.

Question 16

If an apartment leasing company receives the rent for January 2016 from a tenant in December 2015,this will be reported by the leasing company as:

Accepted Answer

A)  revenue in 2015. 
B)  an expense in 2015. 
C)  a liability in 2015. 
D)  stockholders' equity in 2015. 
A)  revenue in 2015. 
B)  an expense in 2015. 
C)  a liability in 2015. 
D)  stockholders' equity in 2015.

Question 17

Which of the following statements is correct about the unadjusted trial balance?

Accepted Answer

A)  Only balance sheet accounts are listed. 
B)  Typically, accounts are listed in order of all debit balance accounts first and all credit balance accounts next. 
C)  When it balances, transactions have been properly recorded. 
D)  Total debits should equal total credits. 
A)  Only balance sheet accounts are listed. 
B)  Typically, accounts are listed in order of all debit balance accounts first and all credit balance accounts next. 
C)  When it balances, transactions have been properly recorded. 
D)  Total debits should equal total credits.

Question 18

CSI Inc.uses accrual basis accounting.During April,the company recorded sales revenue of $50,000 from sales of goods to customers who promised to pay in May.During May,the company received payment from these customers of $45,000.No other transactions with customers took place during these two months.Which of the following statements about income statement accounts is correct?

Accepted Answer

A)  The Sales Revenue account will have a $45,000 balance at April 30. 
B)  The Accounts Receivable account has a balance of $5,000 at May 31. 
C)  The Accounts Payable account has a balance of $5,000 at May 31. 
D)  The Sales Revenue account will have a $45,000 balance at May 31. 
A)  The Sales Revenue account will have a $45,000 balance at April 30. 
B)  The Accounts Receivable account has a balance of $5,000 at May 31. 
C)  The Accounts Payable account has a balance of $5,000 at May 31. 
D)  The Sales Revenue account will have a $45,000 balance at May 31.

Question 19

Which of the following statements regarding the expanded accounting equation is correct?

Accepted Answer

A)  Debits reduce expenses. 
B)  The total credits recorded in revenue accounts must equal the total debits recorded in expense accounts. 
C)  Across all revenue accounts, the total value of all debits must equal the total value of all credits. 
D)  Credits increase revenues. 
A)  Debits reduce expenses. 
B)  The total credits recorded in revenue accounts must equal the total debits recorded in expense accounts. 
C)  Across all revenue accounts, the total value of all debits must equal the total value of all credits. 
D)  Credits increase revenues.

Question 20

The entry to record the payment of accounts payable:

Accepted Answer

A)  decreases assets. 
B)  increases expenses. 
C)  increases liabilities. 
D)  increases stockholder's equity. 
A)  decreases assets. 
B)  increases expenses. 
C)  increases liabilities. 
D)  increases stockholder's equity.

During November 2015,Asler Inc.performs consulting services.The client does not pay Asler until January,2016.

If a company is paid in full for services provided this month,how will the basic accounting equation be affected?

The following amounts were reported by the two companies: Required: Part a.Calculate each company's net profit margin expressed as a percent. Part b Which company has generated a greater return of profit from each revenue dollar?

When Pizza Company delivers pizza to customers and bills its customer accounts,it should record a debit to and a credit to :

What type of account is Accounts Receivable?

Which of the following items is reported on the income statement as an expense?

Which of the following is the correct sequence of steps in the accounting cycle?

Which of the following statements about revenues and expenses is correct?

A company had the following assets and liabilities at the beginning and end of the current year: Common stock in the amount of $15,000 was issued and dividends of $5,000 were paid during the year.What is the amount of net income for the year?

Your company receives advance payment in October for services that are provided during November.Which of the following statements is correct?

The period of time from buying goods and services to collecting cash from customers is the accounting cycle.

CJ Inc.provides tax services on April 14th.They receive payment for their services on April 29.Which of the following is an appropriate journal entry for April 14th?

If an apartment leasing company receives the rent for January 2016 from a tenant in December 2015,this will be reported by the leasing company as:

Which of the following statements is correct about the unadjusted trial balance?

Which of the following statements regarding the expanded accounting equation is correct?

The entry to record the payment of accounts payable:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 3: Reporting Operating Results on the Income Statement

During November 2015,Asler Inc.performs consulting services.The client does not pay Asler until January,2016.

If a company is paid in full for services provided this month,how will the basic accounting equation be affected?

The following amounts were reported by the two companies: Required: Part a.Calculate each company's net profit margin expressed as a percent. Part b Which company has generated a greater return of profit from each revenue dollar?

When Pizza Company delivers pizza to customers and bills its customer accounts,it should record a debit to ______ and a credit to ______:

What type of account is Accounts Receivable?

Which of the following items is reported on the income statement as an expense?

Which of the following is the correct sequence of steps in the accounting cycle?

Which of the following statements about revenues and expenses is correct?

A company had the following assets and liabilities at the beginning and end of the current year: Common stock in the amount of $15,000 was issued and dividends of $5,000 were paid during the year.What is the amount of net income for the year?

Your company receives advance payment in October for services that are provided during November.Which of the following statements is correct?

The period of time from buying goods and services to collecting cash from customers is the accounting cycle.

CJ Inc.provides tax services on April 14th.They receive payment for their services on April 29.Which of the following is an appropriate journal entry for April 14th?

If an apartment leasing company receives the rent for January 2016 from a tenant in December 2015,this will be reported by the leasing company as:

Which of the following statements is correct about the unadjusted trial balance?

Which of the following statements regarding the expanded accounting equation is correct?

The entry to record the payment of accounts payable:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

When Pizza Company delivers pizza to customers and bills its customer accounts,it should record a debit to and a credit to :