Question 1

Which financial statement shows Cash paid to employees?

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 2

Selected data from Olympia,Inc.'s accounting system are provided below.All balances are BEFORE year-end adjustments and all data relate to the year ended Dec.31,2011.Complete the chart below to show the balances in each of the accounts AFTER the appropriate adjustments have been made,using the following additional information:
a.The note was issued on October 31,2011 at 12%.Both interest and principal are due on April 1,2012.
b.The equipment was purchased on January 1,2010.It has a seven-year estimated useful life with a $5,000 estimated residual value.
c.$300 of the supplies were used during the year.
d.The prepaid insurance balance relates to a $7,200,12-month policy purchased on April 1,2011.
e.$20,000 of the unearned revenue is now earned.
f.The salaries expense account balance does not include $10,000 of employee salaries earned but unpaid.

Accepted Answer

The answer of Selected data from Olympia,Inc.'s accounting system are...

Question 3

The total payroll is $4,000 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) Decrease Cash by $12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
B) Increase Salaries payable by $20,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
C) Increase Salaries payable by $12,000 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) Decrease Cash by $12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
B) Increase Salaries payable by $20,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount. 
C) Increase Salaries payable by $12,000 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 4

On January 1,2011,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.How much depreciation expense should the company report for the year ended December 31,2012?

Accepted Answer

A) $8,000 
B) $16,000 
C) $24,000 
D) $40,000 
A) $8,000 
B) $16,000 
C) $24,000 
D) $40,000

Question 5

Adjustments are usually made ________.

Accepted Answer

A) in the accounting period during which deferrals are discovered 
B) at the end of the accounting period after the financial statements are prepared 
C) in the accounting period when accruals get too large 
D) at the end of the accounting period before financial statements are prepared 
A) in the accounting period during which deferrals are discovered 
B) at the end of the accounting period after the financial statements are prepared 
C) in the accounting period when accruals get too large 
D) at the end of the accounting period before financial statements are prepared

Question 6

Ima Hogg wants to borrow money to expand her business.Her plan is to open a new store on each of the major islands in the Caribbean.She knows that her bank will want to see a full set of this year's financial statements before agreeing to lend the company money.Ima tells the company accountant,Tom Trueheart,to double the useful lives of all of the company's equipment before he prepares the financial statements this year.
1.What effect will doubling the useful lives for all of the equipment have on this year's income statement? How will the balance sheet be affected? Why would Ima Hogg ask Tom Trueheart to do this?
2.Would it be ethical for Tom to do as Ima asks? Why?

Accepted Answer

1.Doubling the assets useful lives will

Question 7

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 unearned revenue should the company report on its balance sheet at August 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 8

Clean Sweep,Inc.started the month of June with $600 worth of cleaning supplies.During the month,Clean Sweep purchased $400 of supplies for cash.At June 30,$300 worth of supplies was unused.How will the company report its unused supplies on June 30?

Accepted Answer

A) $400 of unused supplies will appear as an expense on the income statement. 
B) $700 of unused supplies will appear as an expense on the income statement. 
C) $300 of unused supplies will appear as an asset on the balance sheet. 
D) $700 of unused supplies will appear as an asset on the balance sheet. 
A) $400 of unused supplies will appear as an expense on the income statement. 
B) $700 of unused supplies will appear as an expense on the income statement. 
C) $300 of unused supplies will appear as an asset on the balance sheet. 
D) $700 of unused supplies will appear as an asset on the balance sheet.

Question 9

Match between columns
                        Premises: The cost of long-term assets used up during a single accounting period
What the income statement reports when revenues exceed expenses for a given accounting period
The cumulative amount of a long-term asset used up from the time it was purchased to the date of the financial statements
The successful operating results of a business based on matching accomplishment against efforts
What the income statement reports when expenses exceed revenues for a given accounting period

Accepted Answer

The Answer of Depreciation expense and Gross profit and Accumulated is...

Question 10

On January 1,2010,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.What is the book value of the truck at December 31,2012?

Accepted Answer

A) $48,000 
B) $24,000 
C) $32,000 
D) $40,000 
A) $48,000 
B) $24,000 
C) $32,000 
D) $40,000

Question 11

On April 1,Spring Floral,Inc.has a balance of $300 in Supplies.During April,the company buys another $900 of supplies.On April 30,the company counts the supplies and finds $200 of supplies remaining.What will the company report on its April 30 balance sheet?

Accepted Answer

A) Supplies expense of $1,000 
B) Supplies of $1,000 
C) Supplies of $200 
D) Supplies expense of $200 
A) Supplies expense of $1,000 
B) Supplies of $1,000 
C) Supplies of $200 
D) Supplies expense of $200

Question 12

Maxine,Inc.bought a machine on January 1,2012 for $48,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2012?

Accepted Answer

A) $48,000 
B) $8,000 
C) $6,000 
D) $0.Accumulated depreciation does not appear on the balance sheet. 
A) $48,000 
B) $8,000 
C) $6,000 
D) $0.Accumulated depreciation does not appear on the balance sheet.

Question 13

Avatar,Inc.bought a machine on January 1,2011 for $96,000.The machine is expected to last for 8 years,after which it will be worthless.How much depreciation expense will Avatar show on its balance sheet at December 31,2011?

Accepted Answer

A) $96,000 
B) $16,000 
C) $12,000 
D) $0.Depreciation expense does not appear on the balance sheet. 
A) $96,000 
B) $16,000 
C) $12,000 
D) $0.Depreciation expense does not appear on the balance sheet.

Question 14

If a company buys an asset that will be used for more than one accounting period,an expense associated with the asset will be recognized ________.

Accepted Answer

A) when the asset is purchased 
B) in the periods during which the asset is used to generate revenue 
C) when the asset is sold 
D) in the accounting periods during which the company has a profit 
A) when the asset is purchased 
B) in the periods during which the asset is used to generate revenue 
C) when the asset is sold 
D) in the accounting periods during which the company has a profit

Question 15

Mac,Inc.purchased a truck on October 1,2011 in exchange for a 12-month,9%,$100,000 note.What effect does the October 31,2011 adjusting entry for interest have on the company's total liabilities?

Accepted Answer

A) increase 
B) decrease 
C) no effect 
A) increase 
B) decrease 
C) no effect

Question 16

Adjusting entries cause changes in the balance sheet and statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 17

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.Calculate the amount of accumulated depreciation at December 31,2012.

Accepted Answer

A) $48,000 
B) $88,000 
C) $172,000 
D) $152,000 
A) $48,000 
B) $88,000 
C) $172,000 
D) $152,000

Question 18

Prepaid insurance had a balance of $1,000 on the company's December 31,2011 balance sheet.On June 1,2012,the company paid an additional insurance premium of $3,000.Prepaid insurance had a balance of $1,250 on the company's December 31,2012 balance sheet.How much cash paid for insurance will be reported on the company's statement of cash flows for the year ended December 31,2012?

Accepted Answer

A) $(1,000) 
B) $(3,000) 
C) $(1,250) 
D) $(4,000) 
A) $(1,000) 
B) $(3,000) 
C) $(1,250) 
D) $(4,000)

Question 19

What is depreciation?

Accepted Answer

Depreciation is the allocation of the hi

Question 20

Adjusting entries for accruals will never affect ________.

Accepted Answer

A) shareholders' equity 
B) expenses 
C) liabilities 
D) cash 
A) shareholders' equity 
B) expenses 
C) liabilities 
D) cash

Which financial statement shows Cash paid to employees?

The total payroll is $4,000 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,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.How much depreciation expense should the company report for the year ended December 31,2012?

Adjustments are usually made ________.

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 unearned revenue should the company report on its balance sheet at August 31,2011?

Clean Sweep,Inc.started the month of June with $600 worth of cleaning supplies.During the month,Clean Sweep purchased $400 of supplies for cash.At June 30,$300 worth of supplies was unused.How will the company report its unused supplies on June 30?

On January 1,2010,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.What is the book value of the truck at December 31,2012?

On April 1,Spring Floral,Inc.has a balance of $300 in Supplies.During April,the company buys another $900 of supplies.On April 30,the company counts the supplies and finds $200 of supplies remaining.What will the company report on its April 30 balance sheet?

Maxine,Inc.bought a machine on January 1,2012 for $48,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2012?

Avatar,Inc.bought a machine on January 1,2011 for $96,000.The machine is expected to last for 8 years,after which it will be worthless.How much depreciation expense will Avatar show on its balance sheet at December 31,2011?

If a company buys an asset that will be used for more than one accounting period,an expense associated with the asset will be recognized ________.

Mac,Inc.purchased a truck on October 1,2011 in exchange for a 12-month,9%,$100,000 note.What effect does the October 31,2011 adjusting entry for interest have on the company's total liabilities?

Adjusting entries cause changes in the balance sheet and statement of cash flows.

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.Calculate the amount of accumulated depreciation at December 31,2012.

What is depreciation?

Adjusting entries for accruals will never affect ________.

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

Which financial statement shows Cash paid to employees?

The total payroll is $4,000 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,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.How much depreciation expense should the company report for the year ended December 31,2012?

Adjustments are usually made ________.

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 unearned revenue should the company report on its balance sheet at August 31,2011?

Clean Sweep,Inc.started the month of June with $600 worth of cleaning supplies.During the month,Clean Sweep purchased $400 of supplies for cash.At June 30,$300 worth of supplies was unused.How will the company report its unused supplies on June 30?

On January 1,2010,We Haul,Inc.bought a $48,000 truck,which has no residual value and an expected life of 6 years.What is the book value of the truck at December 31,2012?

On April 1,Spring Floral,Inc.has a balance of $300 in Supplies.During April,the company buys another $900 of supplies.On April 30,the company counts the supplies and finds $200 of supplies remaining.What will the company report on its April 30 balance sheet?

Maxine,Inc.bought a machine on January 1,2012 for $48,000.The machine is expected to last for 8 years,after which it will be worthless.How much accumulated depreciation will Maxine report at December 31,2012?

Avatar,Inc.bought a machine on January 1,2011 for $96,000.The machine is expected to last for 8 years,after which it will be worthless.How much depreciation expense will Avatar show on its balance sheet at December 31,2011?

If a company buys an asset that will be used for more than one accounting period,an expense associated with the asset will be recognized ________.

Mac,Inc.purchased a truck on October 1,2011 in exchange for a 12-month,9%,$100,000 note.What effect does the October 31,2011 adjusting entry for interest have on the company's total liabilities?

Adjusting entries cause changes in the balance sheet and statement of cash flows.

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.Calculate the amount of accumulated depreciation at December 31,2012.

What is depreciation?

Adjusting entries for accruals will never affect ________.

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