Question 1

Expenses are incurred

Accepted Answer

A)  to generate revenue. 
B)  to produce liabilities. 
C)  only during the adjustment process. 
D)  to produce assets. 
A)  to generate revenue. 
B)  to produce liabilities. 
C)  only during the adjustment process. 
D)  to produce assets.

Question 2

An adjusting entry made to record accrued interest on a note payable due next year consists of

Accepted Answer

A)  Interest Expense - Debit; Cash - Credit 
B)  Interest Receivable - Debit; Interest Income - Credit 
C)  Interest Expense - Debit; Notes Payable - Credit 
D)  Interest Expense - Debit; Interest Payable - Credit 
A)  Interest Expense - Debit; Cash - Credit 
B)  Interest Receivable - Debit; Interest Income - Credit 
C)  Interest Expense - Debit; Notes Payable - Credit 
D)  Interest Expense - Debit; Interest Payable - Credit

Question 3

Which of the following is not a condition required by the SEC for the recognition of revenue?

Accepted Answer

A)  Delivery of goods or rendering of services 
B)  Transfer of cash from the buyer to the seller 
C)  Fixed or determinable price 
D)  Existence of an arrangement 
A)  Delivery of goods or rendering of services 
B)  Transfer of cash from the buyer to the seller 
C)  Fixed or determinable price 
D)  Existence of an arrangement

Question 4

When expenses exceed revenues, a net income has occurred.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following situations involves a deferral?

Accepted Answer

A)  Recording accrued interest 
B)  Recording depreciation 
C)  Recording unrecorded wages 
D)  Recording unrecorded revenue 
A)  Recording accrued interest 
B)  Recording depreciation 
C)  Recording unrecorded wages 
D)  Recording unrecorded revenue

Question 6

The continuity assumption acknowledges that estimates of net income are still useful.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an example of a deferral?

Accepted Answer

A)  Interest expense incurred but not yet paid 
B)  A commission collected in advance 
C)  Estimated income taxes for the year 
D)  Medical fees earned but not yet collected 
A)  Interest expense incurred but not yet paid 
B)  A commission collected in advance 
C)  Estimated income taxes for the year 
D)  Medical fees earned but not yet collected

Question 8

Which of the following accounts probably would contain a smaller dollar amount on the adjusted trial balance than on the trial balance?

Accepted Answer

A)  Office Supplies 
B)  Accumulated Depreciation-Equipment 
C)  Cash 
D)  Wages Expense 
A)  Office Supplies 
B)  Accumulated Depreciation-Equipment 
C)  Cash 
D)  Wages Expense

Question 9

Prepare year-end adjusting entries for each of the following situations.
a. The Office Supplies account showed a beginning debit balance of $600 and purchases of $1,000. The ending debit balance was $400.
b. Depreciation on buildings is estimated to be $7,600.
c. A one-year insurance policy was purchased for $6,000. Four months have passed since the purchase.
d. Accrued interest on notes payable amounted to $1,500.
e. The company received a $14,400 advance payment during the year on services to be performed. By the end of the year, two-thirds of the services had been performed.
f. Payroll for the five-day workweek, to be paid on Friday, is $14,000. The last day of the period is a Wednesday.
g. Services totaling $780 had been performed but not yet billed or recorded.

Accepted Answer

The answer of Prepare year-end adjusting entries for each of...

Question 10

Office Supplies was $900 at the end of January and $1,140 at the end of February. During February, Office Supplies Expense equaled $280. How much cash was paid for office supplies during February?

Accepted Answer

A)  $220 
B)  $1,420 
C)  $1,720 
D)  $520 
A)  $220 
B)  $1,420 
C)  $1,720 
D)  $520

Question 11

Adjusting entries affect cash flows in the current period.

Accepted Answer

A) True 
 B)False

Expenses are incurred

An adjusting entry made to record accrued interest on a note payable due next year consists of

Which of the following is not a condition required by the SEC for the recognition of revenue?

When expenses exceed revenues, a net income has occurred.

Which of the following situations involves a deferral?

The continuity assumption acknowledges that estimates of net income are still useful.

Which of the following is an example of a deferral?

Which of the following accounts probably would contain a smaller dollar amount on the adjusted trial balance than on the trial balance?

Office Supplies was $900 at the end of January and $1,140 at the end of February. During February, Office Supplies Expense equaled $280. How much cash was paid for office supplies during February?

Adjusting entries affect cash flows in the current period.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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Exam 3: Measuring Business Income

Expenses are incurred

An adjusting entry made to record accrued interest on a note payable due next year consists of

Which of the following is not a condition required by the SEC for the recognition of revenue?

When expenses exceed revenues, a net income has occurred.

Which of the following situations involves a deferral?

The continuity assumption acknowledges that estimates of net income are still useful.

Which of the following is an example of a deferral?

Which of the following accounts probably would contain a smaller dollar amount on the adjusted trial balance than on the trial balance?

Office Supplies was $900 at the end of January and $1,140 at the end of February. During February, Office Supplies Expense equaled $280. How much cash was paid for office supplies during February?

Adjusting entries affect cash flows in the current period.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Filters