Question 1

Time Corporation reported the following for 20A: What was the amount of earnings per share?

Accepted Answer

A) $1.00. 
B) $2.00. 
C) $19.00. 
D) $20.00. 
A) $1.00. 
B) $2.00. 
C) $19.00. 
D) $20.00.

Question 2

On July 1,20A,Goode Company borrowed $10,000.The company signed a note payable with interest at 12 percent per year.The note and interest are due on December 31,20A.On December 31,20A,Goode paid $10,600 to settle the debt in full.Transaction analysis of the $10,600 cash payment on December 31,20A,should reflect which of the following?

Accepted Answer

A) decrease assets,$10,600; decrease liabilities,$10,600. 
B) decrease assets,$10,000; decrease shareholders' equity,$600; and decrease liabilities,$10,600. 
C) decrease liabilities,$10,000; decrease shareholders' equity,$600; and decrease assets,$10,600. 
D) decrease shareholders' equity,$10,000; decrease liabilities,$600; and decrease assets,$10,600. 
A) decrease assets,$10,600; decrease liabilities,$10,600. 
B) decrease assets,$10,000; decrease shareholders' equity,$600; and decrease liabilities,$10,600. 
C) decrease liabilities,$10,000; decrease shareholders' equity,$600; and decrease assets,$10,600. 
D) decrease shareholders' equity,$10,000; decrease liabilities,$600; and decrease assets,$10,600.

Question 3

The primary purpose of the statement of cash flows is to report which of the following?

Accepted Answer

A) profit earned and dividends paid during the period. 
B) all inflows and outflows of cash during the period. 
C) assets owned and claims against those assets at the end of the period. 
D) liability changes made by the financial department of the company during the period. 
A) profit earned and dividends paid during the period. 
B) all inflows and outflows of cash during the period. 
C) assets owned and claims against those assets at the end of the period. 
D) liability changes made by the financial department of the company during the period.

Question 4

Which of the following statements is true about earnings per share?

Accepted Answer

A) It is the only ratio required to be disclosed on the income statement 
B) It assesses the ability of the firm to pay their bills as they come due 
C) It evaluates the efficiency with which the company uses their assets to generate sales revenue 
D) It represents the profit available to the preferred shareholders 
A) It is the only ratio required to be disclosed on the income statement 
B) It assesses the ability of the firm to pay their bills as they come due 
C) It evaluates the efficiency with which the company uses their assets to generate sales revenue 
D) It represents the profit available to the preferred shareholders

Question 5

Rent of $150 collected in advance was credited to rent revenue.At the end of the accounting period,it was still unearned.The related adjusting entry should be: Debit-- Rent revenue,$150; Credit--Unearned rent revenue,$150.

Accepted Answer

A) True 
 B)False

Question 6

Expenses paid in advance of the use of services or goods give rise to an asset until the goods and services are used,consumed,or expired.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following accounts is closed at the end of the year but does not enter the calculation of profit?

Accepted Answer

A) Interest receivable 
B) Dividends declared 
C) Depreciation expense 
D) Salaries payable 
A) Interest receivable 
B) Dividends declared 
C) Depreciation expense 
D) Salaries payable

Question 8

Because of its complexity and susceptibility to errors,which step in the process do independent auditors examine most closely?

Accepted Answer

A) financial statement preparation 
B) tax reports 
C) deferred and accrued adjustments 
D) closing entries 
A) financial statement preparation 
B) tax reports 
C) deferred and accrued adjustments 
D) closing entries

Question 9

Why is the statement of cash flows important?

Accepted Answer

A) of the three required financial statements,it is the only one which reports changes which took place during an accounting period. 
B) it indicates the asset and liability position of a company by reflecting the amounts and types of its assets and liabilities at the beginning and end of the period. 
C) it summarizes the information already reported in the income statement and statement of financial position. 
D) it explains the sources and uses of cash during the period. 
A) of the three required financial statements,it is the only one which reports changes which took place during an accounting period. 
B) it indicates the asset and liability position of a company by reflecting the amounts and types of its assets and liabilities at the beginning and end of the period. 
C) it summarizes the information already reported in the income statement and statement of financial position. 
D) it explains the sources and uses of cash during the period.

Question 10

Adjusting entries are recorded in the journal (i.e.,journalized)but they are not posted to the ledger.

Accepted Answer

A) True 
 B)False

Question 11

For the year 20A,Tally Corporation reported $50,000 pretax profit (average annual income tax rate of 40%).What was the after tax profit?

Accepted Answer

A) $10,000. 
B) $15,000. 
C) $20,000. 
D) $30,000. 
A) $10,000. 
B) $15,000. 
C) $20,000. 
D) $30,000.

Question 12

On December 1,20A,Widow Company paid $1,500 rent for some office space which was debited in full to the prepaid rent account.The rent was for three months.Assuming Widow's accounting year ends December 31,give the adjusting entry required on December 31,20A.

Accepted Answer

The answer of On December 1,20A,Widow Company paid $1,500 rent...

Question 13

Modern Woman magazine has received cash subscriptions on April 1,20A,in the amount of $3,600,000 for the next three years.Their year end is December 31,20A.Magazine delivery occurs monthly and started on April 1,20A.These were the only subscription sales for the year.Answer the following questions:
a.What amount of cash should be reported for the year on the statement of cash flows?
b.What amount of subscriptions revenue should be reported on the income statement?
c.What amount would be reported as unearned subscriptions revenue on the statement of financial position as of December 31,20A?

Accepted Answer

(a)$3,600,

Question 14

Failure to make an adjusting entry to recognize service revenue receivable would cause which of the following?

Accepted Answer

A) an overstatement of assets,profit,and shareholders' equity. 
B) an overstatement of assets and shareholders' equity and an understatement of profit. 
C) no effect on assets,liabilities,profit,nor shareholders' equity. 
D) an understatement of assets,profit,and shareholders' equity. 
A) an overstatement of assets,profit,and shareholders' equity. 
B) an overstatement of assets and shareholders' equity and an understatement of profit. 
C) no effect on assets,liabilities,profit,nor shareholders' equity. 
D) an understatement of assets,profit,and shareholders' equity.

Question 15

On July 1,20A,Hale Company paid a two-year insurance premium.On that date the following journal entry was made:
The annual accounting period ends on December 31.
A.How much of the premium should be reported as expense on the 20A income statement? $
B.What is the amount of prepaid insurance which should be reported on the statement of financial position at December 31,20A? $
C.Give the adjusting entry that should be made on December 31,20A.

Accepted Answer

A.$3,600 x

Question 16

At the end of its accounting period,December 31,20B,May Corporation owed $1,000 for property taxes which had not been recorded nor paid.Therefore,the 20B adjusting entry should be which of the following?

Accepted Answer

A) $1,000 credited to an expense account and debited to a liability account. 
B) $1,000 debited to an expense account and credited to an asset account. 
C) $1,000 credited to a liability account and debited to an expense account. 
D) $1,000 debited to a liability account and credited to an asset account. 
A) $1,000 credited to an expense account and debited to a liability account. 
B) $1,000 debited to an expense account and credited to an asset account. 
C) $1,000 credited to a liability account and debited to an expense account. 
D) $1,000 debited to a liability account and credited to an asset account.

Question 17

A list of the accounts of TIP Corporation is given below,followed by some selected transactions.Indicate the accounts that should be debited and credited for each transaction entry,adjusting entry,and closing entry by placing the appropriate account codes in the debit and credit columns provided.

Accepted Answer

The answer of A list of the accounts of TIP...

Question 18

On July 1,20A,Bill Company signed a two-year $8,000 note payable with 9 percent interest.At due date,July 1,20C,the principal and interest will be paid in full.Interest expense should be reported on the income statement for the year ended December 31,20A,in the amount of which of the following?

Accepted Answer

A) $360. 
B) $420. 
C) $720. 
D) $1,440. 
A) $360. 
B) $420. 
C) $720. 
D) $1,440.

Question 19

The statement of cash flows is designed to explain the causes of changes in the cash account during the period that resulted from the inflows and outflows of cash.

Accepted Answer

A) True 
 B)False

Question 20

Which is the correct order of the steps in the accounting cycle during the accounting period?

Accepted Answer

A) Transaction analysis,journal entries,trial balance 
B) Transaction analysis,posting to the accounts,journal entries 
C) Transaction analysis,posting to the accounts,adjusting the accounts 
D) Transaction analysis,journal entries,posting to the accounts 
A) Transaction analysis,journal entries,trial balance 
B) Transaction analysis,posting to the accounts,journal entries 
C) Transaction analysis,posting to the accounts,adjusting the accounts 
D) Transaction analysis,journal entries,posting to the accounts

Time Corporation reported the following for 20A: What was the amount of earnings per share?

The primary purpose of the statement of cash flows is to report which of the following?

Which of the following statements is true about earnings per share?

Rent of $150 collected in advance was credited to rent revenue.At the end of the accounting period,it was still unearned.The related adjusting entry should be: Debit-- Rent revenue,$150; Credit--Unearned rent revenue,$150.

Expenses paid in advance of the use of services or goods give rise to an asset until the goods and services are used,consumed,or expired.

Which of the following accounts is closed at the end of the year but does not enter the calculation of profit?

Because of its complexity and susceptibility to errors,which step in the process do independent auditors examine most closely?

Why is the statement of cash flows important?

Adjusting entries are recorded in the journal (i.e.,journalized)but they are not posted to the ledger.

For the year 20A,Tally Corporation reported $50,000 pretax profit (average annual income tax rate of 40%).What was the after tax profit?

On December 1,20A,Widow Company paid $1,500 rent for some office space which was debited in full to the prepaid rent account.The rent was for three months.Assuming Widow's accounting year ends December 31,give the adjusting entry required on December 31,20A.

Failure to make an adjusting entry to recognize service revenue receivable would cause which of the following?

At the end of its accounting period,December 31,20B,May Corporation owed $1,000 for property taxes which had not been recorded nor paid.Therefore,the 20B adjusting entry should be which of the following?

A list of the accounts of TIP Corporation is given below,followed by some selected transactions.Indicate the accounts that should be debited and credited for each transaction entry,adjusting entry,and closing entry by placing the appropriate account codes in the debit and credit columns provided.

On July 1,20A,Bill Company signed a two-year $8,000 note payable with 9 percent interest.At due date,July 1,20C,the principal and interest will be paid in full.Interest expense should be reported on the income statement for the year ended December 31,20A,in the amount of which of the following?

The statement of cash flows is designed to explain the causes of changes in the cash account during the period that resulted from the inflows and outflows of cash.

Which is the correct order of the steps in the accounting cycle during the accounting period?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

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Exam 4: Adjustments,financial Statements,and the Quality of Earnings

Time Corporation reported the following for 20A: What was the amount of earnings per share?

The primary purpose of the statement of cash flows is to report which of the following?

Which of the following statements is true about earnings per share?

Rent of $150 collected in advance was credited to rent revenue.At the end of the accounting period,it was still unearned.The related adjusting entry should be: Debit-- Rent revenue,$150; Credit--Unearned rent revenue,$150.

Expenses paid in advance of the use of services or goods give rise to an asset until the goods and services are used,consumed,or expired.

Which of the following accounts is closed at the end of the year but does not enter the calculation of profit?

Because of its complexity and susceptibility to errors,which step in the process do independent auditors examine most closely?

Why is the statement of cash flows important?

Adjusting entries are recorded in the journal (i.e.,journalized)but they are not posted to the ledger.

For the year 20A,Tally Corporation reported $50,000 pretax profit (average annual income tax rate of 40%).What was the after tax profit?

On December 1,20A,Widow Company paid $1,500 rent for some office space which was debited in full to the prepaid rent account.The rent was for three months.Assuming Widow's accounting year ends December 31,give the adjusting entry required on December 31,20A.

Failure to make an adjusting entry to recognize service revenue receivable would cause which of the following?

At the end of its accounting period,December 31,20B,May Corporation owed $1,000 for property taxes which had not been recorded nor paid.Therefore,the 20B adjusting entry should be which of the following?

A list of the accounts of TIP Corporation is given below,followed by some selected transactions.Indicate the accounts that should be debited and credited for each transaction entry,adjusting entry,and closing entry by placing the appropriate account codes in the debit and credit columns provided.

On July 1,20A,Bill Company signed a two-year $8,000 note payable with 9 percent interest.At due date,July 1,20C,the principal and interest will be paid in full.Interest expense should be reported on the income statement for the year ended December 31,20A,in the amount of which of the following?

The statement of cash flows is designed to explain the causes of changes in the cash account during the period that resulted from the inflows and outflows of cash.

Which is the correct order of the steps in the accounting cycle during the accounting period?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

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