Question 1

Prepaid rent is a(n)________.

Accepted Answer

A) expense representing rent used up during the period 
B) liability representing an obligation to pay for rent 
C) part of shareholders' equity 
D) asset representing rent that has been paid but not used 
A) expense representing rent used up during the period 
B) liability representing an obligation to pay for rent 
C) part of shareholders' equity 
D) asset representing rent that has been paid but not used

Question 2

Net income equals ________.

Accepted Answer

A) revenues minus liabilities 
B) assets minus liabilities 
C) the change in shareholders' equity from the beginning of the year to the end of the year 
D) revenues minus expenses 
A) revenues minus liabilities 
B) assets minus liabilities 
C) the change in shareholders' equity from the beginning of the year to the end of the year 
D) revenues minus expenses

Question 3

On January 1,2011,Beyers Company pays $205,000 cash for factory equipment that has an estimated useful life of 10 years and an expected residual value of $5,000.Calculate the annual amount of depreciation expense.

Accepted Answer

A) $20,500 
B) $20,000 
C) $500 
D) $200,000 
A) $20,500 
B) $20,000 
C) $500 
D) $200,000

Question 4

Enoch,Inc.began operations on July 1,2011.On August 1,it received $12,000 in advance for services to be performed evenly over the next 12 months.How much of this revenue should the company report on its income statement for the YEAR ended December 31,2011?

Accepted Answer

A) $12,000 
B) $1,000 
C) $11,000 
D) $5,000 
A) $12,000 
B) $1,000 
C) $11,000 
D) $5,000

Question 5

Which financial statement shows Interest payable?

Accepted Answer

A) income statement 
B) statement of changes in shareholders' equity 
C) statement of cash flows 
D) balance sheet 
A) income statement 
B) statement of changes in shareholders' equity 
C) statement of cash flows 
D) balance sheet

Question 6

Use the following code to identify each of the assets listed below:
a.a long-term asset subject to depreciation
b.a long-term asset that does NOT need to be depreciated
c.is NOT a long-term asset
______ 1.Office supplies
______ 2.Land
______ 3.Factory equipment
______ 4.Office computers
______ 5.Cash
______ 6.Accounts receivable
______ 7.Depreciation expense
______ 8.Office furniture
______ 9.Truck
______ 10.Building

Accepted Answer

The answer of Use the following code to identify each...

Question 7

to its monthly magazine Minks Stink.The company should report $12,000 of revenue on its income statement for the year ended December 31,2012.

Accepted Answer

A) True 
 B)False

Question 8

Mariner,Inc.bought a lobster boat on November 1,2011 in exchange for a 2-month,6%,$80,000 note.The note plus interest will be repaid on January 1,2012,the maturity date.How much interest payable should the company report on its balance sheet at December 31,2011?

Accepted Answer

A) $0 
B) $4,800 
C) $400 
D) $800 
A) $0 
B) $4,800 
C) $400 
D) $800

Question 9

On January 1,Needem,Inc.borrows $10,000 and agrees to repay the loan plus 8% interest in two years.If the proper adjustment is not made at the end of the first year,what will be wrong with the financial statements?

Accepted Answer

A) Nothing will be wrong with the financial statements. 
B) Cash will be overstated on the balance sheet. 
C) Expenses will be overstated on the income statement. 
D) Liabilities will be understated on the balance sheet. 
A) Nothing will be wrong with the financial statements. 
B) Cash will be overstated on the balance sheet. 
C) Expenses will be overstated on the income statement. 
D) Liabilities will be understated on the balance sheet.

Question 10

The Unearned revenue account represents the cash collected from customers in advance of performing the service or delivering the goods.

Accepted Answer

A) True 
 B)False

Question 11

Maxine,Inc.bought a machine on January 1,2010 for $24,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2011?

Accepted Answer

A) $24,000 
B) $16,000 
C) $3,000 
D) $6,000 
A) $24,000 
B) $16,000 
C) $3,000 
D) $6,000

Question 12

Revenue earned on the income statement will always equal Cash collected from customers on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 13

Indicate which financial statement would report the following items of information.Some items may appear on more than one statement.You should include all of them.
Your choices are as follows:
IS = Income statement
OE = Statement of changes in shareholders' equity
BS = Balance sheet
CF = Statement of cash flows
NONE = Item does not appear on any of the financial statements

Accepted Answer

The answer of Indicate which financial statement would report the...

Question 14

The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday).The total payroll is $5,000 per day of work.If the accounting period ends on Wednesday of a given week,what adjustment must be made to the company's accounting records?

Accepted Answer

A) Increase Salaries payable by $15,000 and increase shareholders' equity by recognizing Salaries expense for the same amount. 
B) Increase Salaries payable by $15,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
C) Decrease Cash by $15,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
D) No adjustment is necessary because there is no expense until the employees are paid on Friday. 
A) Increase Salaries payable by $15,000 and increase shareholders' equity by recognizing Salaries expense for the same amount. 
B) Increase Salaries payable by $15,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
C) Decrease Cash by $15,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
D) No adjustment is necessary because there is no expense until the employees are paid on Friday.

Question 15

On January 1,2011,Swinger,Inc.purchases a batting machine for $240,000 that has an estimated useful life of 5 years and an expected residual value of $20,000.What will the company report on its income statement for the year ended December 31,2012?

Accepted Answer

A) Financing activity cash outflow of $(44,000) 
B) Equipment will be reported as an asset at a book value of $152,000. 
C) Depreciation expense of $44,000 
D) Depreciation expense of $88,000 
A) Financing activity cash outflow of $(44,000) 
B) Equipment will be reported as an asset at a book value of $152,000. 
C) Depreciation expense of $44,000 
D) Depreciation expense of $88,000

Question 16

How much interest will accrue over three months on a $10,000,9% loan?

Accepted Answer

A) $300 
B) $225 
C) $900 
D) $2,700 
A) $300 
B) $225 
C) $900 
D) $2,700

Question 17

A computerized accounting system requires users to type in a password before they are allowed to enter data in the system.This control is primarily designed to ________.

Accepted Answer

A) prevent errors in recording and updating the financial accounting information 
B) prevent unauthorized access to the financial accounting records 
C) prevent loss of the data in the financial accounting records 
D) eliminate the risk of incorrect acceptance 
A) prevent errors in recording and updating the financial accounting information 
B) prevent unauthorized access to the financial accounting records 
C) prevent loss of the data in the financial accounting records 
D) eliminate the risk of incorrect acceptance

Question 18

A computerized accounting system will not allow anyone to enter data that puts the accounting equation out of balance.This control is primarily designed to prevent ________.

Accepted Answer

A) errors in recording and updating the financial accounting information 
B) unauthorized access to the financial accounting records 
C) loss of the data in the financial accounting records 
D) the risk of incorrect acceptance 
A) errors in recording and updating the financial accounting information 
B) unauthorized access to the financial accounting records 
C) loss of the data in the financial accounting records 
D) the risk of incorrect acceptance

Question 19

Match between columns
                        Premises: A party that borrows resources with the understanding that the resources will be repaid later
The amount borrowed or loaned
What you pay for the use of other people's money or what you earn by lending money
A party that lends resources with the understanding that the resources will be returned later
Assets created by selling goods to customers on credit

Accepted Answer

The Answer of Creditor and Interest and Accounts receivable and is...

Question 20

Which financial statement shows accumulated depreciation?

Accepted Answer

A) income statement 
B) balance sheet 
C) statement of cash flows 
D) statement of changes in shareholders' equity 
A) income statement 
B) balance sheet 
C) statement of cash flows 
D) statement of changes in shareholders' equity

Prepaid rent is a(n)________.

Net income equals ________.

On January 1,2011,Beyers Company pays $205,000 cash for factory equipment that has an estimated useful life of 10 years and an expected residual value of $5,000.Calculate the annual amount of depreciation expense.

Enoch,Inc.began operations on July 1,2011.On August 1,it received $12,000 in advance for services to be performed evenly over the next 12 months.How much of this revenue should the company report on its income statement for the YEAR ended December 31,2011?

Which financial statement shows Interest payable?

to its monthly magazine Minks Stink.The company should report $12,000 of revenue on its income statement for the year ended December 31,2012.

Mariner,Inc.bought a lobster boat on November 1,2011 in exchange for a 2-month,6%,$80,000 note.The note plus interest will be repaid on January 1,2012,the maturity date.How much interest payable should the company report on its balance sheet at December 31,2011?

On January 1,Needem,Inc.borrows $10,000 and agrees to repay the loan plus 8% interest in two years.If the proper adjustment is not made at the end of the first year,what will be wrong with the financial statements?

The Unearned revenue account represents the cash collected from customers in advance of performing the service or delivering the goods.

Maxine,Inc.bought a machine on January 1,2010 for $24,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2011?

Revenue earned on the income statement will always equal Cash collected from customers on the statement of cash flows.

The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday).The total payroll is $5,000 per day of work.If the accounting period ends on Wednesday of a given week,what adjustment must be made to the company's accounting records?

On January 1,2011,Swinger,Inc.purchases a batting machine for $240,000 that has an estimated useful life of 5 years and an expected residual value of $20,000.What will the company report on its income statement for the year ended December 31,2012?

How much interest will accrue over three months on a $10,000,9% loan?

A computerized accounting system requires users to type in a password before they are allowed to enter data in the system.This control is primarily designed to ________.

A computerized accounting system will not allow anyone to enter data that puts the accounting equation out of balance.This control is primarily designed to prevent ________.

Which financial statement shows accumulated depreciation?

Business: Whats It All About

Qualities of Accounting Information

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters

Exam 3: Accruals and Deferrals: Timing Is Everything in Accounting

Prepaid rent is a(n)________.

Net income equals ________.

On January 1,2011,Beyers Company pays $205,000 cash for factory equipment that has an estimated useful life of 10 years and an expected residual value of $5,000.Calculate the annual amount of depreciation expense.

Enoch,Inc.began operations on July 1,2011.On August 1,it received $12,000 in advance for services to be performed evenly over the next 12 months.How much of this revenue should the company report on its income statement for the YEAR ended December 31,2011?

Which financial statement shows Interest payable?

to its monthly magazine Minks Stink.The company should report $12,000 of revenue on its income statement for the year ended December 31,2012.

Mariner,Inc.bought a lobster boat on November 1,2011 in exchange for a 2-month,6%,$80,000 note.The note plus interest will be repaid on January 1,2012,the maturity date.How much interest payable should the company report on its balance sheet at December 31,2011?

On January 1,Needem,Inc.borrows $10,000 and agrees to repay the loan plus 8% interest in two years.If the proper adjustment is not made at the end of the first year,what will be wrong with the financial statements?

The Unearned revenue account represents the cash collected from customers in advance of performing the service or delivering the goods.

Maxine,Inc.bought a machine on January 1,2010 for $24,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2011?

Revenue earned on the income statement will always equal Cash collected from customers on the statement of cash flows.

The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday).The total payroll is $5,000 per day of work.If the accounting period ends on Wednesday of a given week,what adjustment must be made to the company's accounting records?

On January 1,2011,Swinger,Inc.purchases a batting machine for $240,000 that has an estimated useful life of 5 years and an expected residual value of $20,000.What will the company report on its income statement for the year ended December 31,2012?

How much interest will accrue over three months on a $10,000,9% loan?

A computerized accounting system requires users to type in a password before they are allowed to enter data in the system.This control is primarily designed to ________.

A computerized accounting system will not allow anyone to enter data that puts the accounting equation out of balance.This control is primarily designed to prevent ________.

Which financial statement shows accumulated depreciation?

Business: Whats It All About

Qualities of Accounting Information

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters