Question 1

The matching principle requires that revenue not be assigned to the accounting period in which it is earned.

Accepted Answer

A) True 
 B)False

Question 2

List the steps in the accounting cycle.

Accepted Answer

The accounting cycle consists of ten ste

Question 3

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery.
   
* $2,000 of the long-term note payable is due during the next year.

Accepted Answer

*Net income = $145,000 - $8,0

Question 4

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet.Prepare the necessary closing entries.

Accepted Answer

None

Question 5

Profit margin can also be called return on sales.

Accepted Answer

A) True 
 B)False

Question 6

Shown below are a company's ledger accounts and their end-of-period balances before closing entries are posted.What amount will be posted to Retained Earnings in the process of closing the Income Summary account? (Assume all accounts have normal balances.)
$\begin{array}{|l|r|}
\hline \text { Retained earnings } & \$ 14,000 \
\hline \text { Dividends } & 19,200 \
\hline \text { Sales Revenue } & 58,000 \
\hline \text { Rent expense } & 7,200 \
\hline \text { Salaries expense } & 14,400 \
\hline \text { Insurance expense } & 840 \
\hline \text { Depr. Expense - equipment } & 900 \
\hline \text { Accum depr. - equipment } & 2,500\
\hline
\end{array}$

Accepted Answer

A) $16,780 debit 
B) $15,460 credit 
C) $48,660 credit 
D) $34,660 credit 
E) $17,960 credit 
A) $16,780 debit 
B) $15,460 credit 
C) $48,660 credit 
D) $34,660 credit 
E) $17,960 credit

Question 7

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.
On June 30,2011 Apricot should record:

Accepted Answer

A) A credit to an expense for $5,000 
B) A debit to an expense for $5,000 
C) A credit to a prepaid expense for $5,000 
D) A debit to a prepaid expense for $5,000 
E) A debit to Cash for $5,000 
A) A credit to an expense for $5,000 
B) A debit to an expense for $5,000 
C) A credit to a prepaid expense for $5,000 
D) A debit to a prepaid expense for $5,000 
E) A debit to Cash for $5,000

Question 8

Which of the following statements is incorrect?

Accepted Answer

A) Prepaid expenses,depreciation and unearned revenues involve previously recorded assets and liabilities 
B) Accrued expenses and accrued revenues involve assets and liabilities that were not previously been recorded 
C) Adjusting entries can be used to record both accrued expenses and accrued revenues 
D) Prepaid expenses,depreciation and unearned revenues often require adjusting entries to record the effects of the passage of time 
E) Adjusting entries affect the cash account 
A) Prepaid expenses,depreciation and unearned revenues involve previously recorded assets and liabilities 
B) Accrued expenses and accrued revenues involve assets and liabilities that were not previously been recorded 
C) Adjusting entries can be used to record both accrued expenses and accrued revenues 
D) Prepaid expenses,depreciation and unearned revenues often require adjusting entries to record the effects of the passage of time 
E) Adjusting entries affect the cash account

Question 9

Match between columns
                        Premises:  Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue, expense and dividends accounts to retained earnings
 Tangible long-lived assets used to produce or sell products or services
 A balance sheet that broadly groups assets, liabilities and equity items
 Long-term assets used to produce or sell products or services; these assets usually lack physical form and their benefits are uncertain
 Obligations that are due to be paid or settled within one year or the operating cycle of a business whichever is longer
 Cash or other assets that are expected to be sold, collected or used within one year or the company's operating cycle whichever is longer
 The owner's claim on the assets of a company
 A balance sheet that organizes the assets and liabilities into important subgroups
 A ratio that is used to help evaluate a company's ability to pay its short-term obligations, calculated by dividing current assets by current liabilities
 Assets such as notes receivable or investments in stocks which are held for the longer of one year or the operating cycle of the company

Accepted Answer

The Answer of Equity and Plant assets and Current assets is...

Question 10

Match the following terms with the appropriate definition.
-     Time period principle

Accepted Answer

A)  The expense created by allocating the cost of plant and equipment to the periods in which they are used 
B)  The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses 
C)  Items paid for in advance of receiving their benefits 
D)  Allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life 
E)  The accounting system that recognizes revenues when earned and expenses when incurred 
F) A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years 
G) Revenues earned in a period that are both unrecorded and not yet received in cash or other assets 
H) Net income divided by net sales 
I) The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid 
A)  The expense created by allocating the cost of plant and equipment to the periods in which they are used 
B)  The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses 
C)  Items paid for in advance of receiving their benefits 
D)  Allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life 
E)  The accounting system that recognizes revenues when earned and expenses when incurred 
F) A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years 
G) Revenues earned in a period that are both unrecorded and not yet received in cash or other assets 
H) Net income divided by net sales 
I) The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid

Question 11

Prepare an income statement from the adjusted trial balance of Hanson Storage.

Accepted Answer

The answer of Prepare an income statement from the adjusted...

Question 12

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Accepted Answer

The answer of ______________________ are required at the end of...

Question 13

The account form of the balance sheet matches the accounting equation.That is,assets are on the left side of the statement and liabilities and equity are on the right side of the statement.

Accepted Answer

A) True 
 B)False

Question 14

Profit margin is calculated by dividing net sales by net income.

Accepted Answer

A) True 
 B)False

Question 15

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

Accepted Answer

A) An expense amount entered in the Balance Sheet Debit column 
B) A revenue amount entered in the Balance Sheet Credit column 
C) An asset amount entered in the Income Statement Debit column 
D) A liability amount entered in the Income Statement Credit column 
E) An expense amount entered in the Balance Sheet Credit column 
A) An expense amount entered in the Balance Sheet Debit column 
B) A revenue amount entered in the Balance Sheet Credit column 
C) An asset amount entered in the Income Statement Debit column 
D) A liability amount entered in the Income Statement Credit column 
E) An expense amount entered in the Balance Sheet Credit column

Question 16

The main purpose of adjusting entries is to:

Accepted Answer

A) Record external transactions and events 
B) Record internal transactions and events 
C) Recognize assets purchased during the period 
D) Recognize debts paid during the period 
E) Correct errors 
A) Record external transactions and events 
B) Record internal transactions and events 
C) Recognize assets purchased during the period 
D) Recognize debts paid during the period 
E) Correct errors

Question 17

All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet,including the net income or net loss.

Accepted Answer

A) True 
 B)False

Question 18

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following:
Office supplies used during the period,$1,200.
Expiration of prepaid rent,$700.
Accrued salaries expense,$500.
Depreciation expense,$800.
Accrued service fees receivable,$400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A) $80,400 
B) $84,000 
C) $85,700 
D) $85,900 
E) $87,600 
A) $80,400 
B) $84,000 
C) $85,700 
D) $85,900 
E) $87,600

Question 19

A trial balance prepared after the closing entries have been journalized and posted is the:

Accepted Answer

A) Unadjusted trial balance 
B) Post-closing trial balance 
C) General ledger 
D) Adjusted trial balance 
E) Work sheet 
A) Unadjusted trial balance 
B) Post-closing trial balance 
C) General ledger 
D) Adjusted trial balance 
E) Work sheet

Question 20

Explain how accounting adjustments affect financial statements.

Accepted Answer

Without accounting adjustments many acco

The matching principle requires that revenue not be assigned to the accounting period in which it is earned.

List the steps in the accounting cycle.

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet.Prepare the necessary closing entries.

Profit margin can also be called return on sales.

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On June 30,2011 Apricot should record:

Which of the following statements is incorrect?

Match the following terms with the appropriate definition. - Time period principle

Prepare an income statement from the adjusted trial balance of Hanson Storage.

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

The account form of the balance sheet matches the accounting equation.That is,assets are on the left side of the statement and liabilities and equity are on the right side of the statement.

Profit margin is calculated by dividing net sales by net income.

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

The main purpose of adjusting entries is to:

All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet,including the net income or net loss.

A trial balance prepared after the closing entries have been journalized and posted is the:

Explain how accounting adjustments affect financial statements.

Introducing Accounting in Business

Analyzing and Recording Transactions

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 3: Adjusting Accounts and Preparing Financial Statements

The matching principle requires that revenue not be assigned to the accounting period in which it is earned.

List the steps in the accounting cycle.

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet.Prepare the necessary closing entries.

Profit margin can also be called return on sales.

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On June 30,2011 Apricot should record:

Which of the following statements is incorrect?

Match the following terms with the appropriate definition. - Time period principle

Prepare an income statement from the adjusted trial balance of Hanson Storage.

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

The account form of the balance sheet matches the accounting equation.That is,assets are on the left side of the statement and liabilities and equity are on the right side of the statement.

Profit margin is calculated by dividing net sales by net income.

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

The main purpose of adjusting entries is to:

All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet,including the net income or net loss.

A trial balance prepared after the closing entries have been journalized and posted is the:

Explain how accounting adjustments affect financial statements.

Introducing Accounting in Business

Analyzing and Recording Transactions

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters