Question 1

The changes in revenues and expenses caused by accruals and deferrals are classified as which of the following?

Accepted Answer

A) investing activities 
B) financing activities 
C) operating activities 
D) all of these activities are affected by accruals and deferrals 
A) investing activities 
B) financing activities 
C) operating activities 
D) all of these activities are affected by accruals and deferrals

Question 2

At the end of 20C,Libby Company reported an ending balance for retained earnings of $50,000.During 20D,the company reported the following amounts: Dividends declared and paid,$30,000 and profit,$40,000.The 20D statement of Retained Earnings should report an ending balance for retained earnings of which of the following?

Accepted Answer

A) $60,000. 
B) $80,000. 
C) $90,000. 
D) $100,000. 
A) $60,000. 
B) $80,000. 
C) $90,000. 
D) $100,000.

Question 3

As prepaid expenses expire with the passage of time,the correct adjusting entry will be a

Accepted Answer

A) debit to an expense account and a credit to an asset account. 
B) debit to an asset account and a credit to an asset account. 
C) debit to an expense account and a credit to an expense account. 
D) debit to an asset account and a credit to an expense account. 
A) debit to an expense account and a credit to an asset account. 
B) debit to an asset account and a credit to an asset account. 
C) debit to an expense account and a credit to an expense account. 
D) debit to an asset account and a credit to an expense account.

Question 4

The statement of cash flows shows the cash inflows,cash outflows,and change in cash for a period.

Accepted Answer

A) True 
 B)False

Question 5

On March 1,20A,the premium on a two-year insurance policy on equipment was paid amounting to $1,800.At the end of 20A (end of the accounting period),the financial statements for 20A,would report which of the following?

Accepted Answer

A) Insurance expense,$0; Prepaid insurance $1,800. 
B) Insurance expense,$750; Prepaid insurance $1,050. 
C) Insurance expense,$900; Prepaid insurance $900. 
D) Insurance expense,$1,800; Prepaid insurance $0. 
A) Insurance expense,$0; Prepaid insurance $1,800. 
B) Insurance expense,$750; Prepaid insurance $1,050. 
C) Insurance expense,$900; Prepaid insurance $900. 
D) Insurance expense,$1,800; Prepaid insurance $0.

Question 6

The difference between the equipment account balance and the accumulated amortization equipment account balance is called which of the following?

Accepted Answer

A) market value 
B) acquisition cost 
C) net realizable value 
D) net book value 
A) market value 
B) acquisition cost 
C) net realizable value 
D) net book value

Question 7

The return on equity measures how well management used shareholders' investment to generate revenue during the period.

Accepted Answer

A) True 
 B)False

Question 8

A trial balance prepared after the closing entries have been posted would exclude which one of the following accounts?

Accepted Answer

A) Inventory. 
B) Trade receivables. 
C) Accumulated depreciation. 
D) Service revenue. 
A) Inventory. 
B) Trade receivables. 
C) Accumulated depreciation. 
D) Service revenue.

Question 9

Air Cargo Company recorded the following adjusting entries at the end of the accounting year,December 31,20B:
Give the closing entries for Air Cargo Company at December 31,20B.(You need not use the Income Summary account).

Accepted Answer

The answer of Air Cargo Company recorded the following adjusting...

Question 10

The dividends declared account should be closed to retained earnings at year-end.

Accepted Answer

A) True 
 B)False

Question 11

Analysts,investors,and creditors use these same statements to evaluate performance as part of their share valuation and credit evaluation judgments.

Accepted Answer

A) True 
 B)False

Question 12

Adjusting entries are necessary at the end of the accounting period to measure income properly and to provide appropriate amounts for financial statement accounts.

Accepted Answer

A) True 
 B)False

Question 13

Deferred expenses are previously recorded liabilities that must be adjusted for the amount of expense incurred during the period.

Accepted Answer

A) True 
 B)False

Question 14

A post-closing trial balance will show account balances for which of the following?

Accepted Answer

A) permanent and temporary accounts. 
B) permanent accounts only. 
C) temporary accounts only. 
D) income statement accounts only. 
A) permanent and temporary accounts. 
B) permanent accounts only. 
C) temporary accounts only. 
D) income statement accounts only.

Question 15

The unadjusted trial balance does not reflect adjusting entries.

Accepted Answer

A) True 
 B)False

Question 16

The comparative statements of financial positions of Savoy Company for December 31,20A and 20B,reported the following selected amounts:
A.The total amount of office supplies purchased during 20B was $___________.
B.The total amount of rent collected during 20B was $____________.
C.In what section of the statement of cash flows would the payments for office supplies appear?
D.In what section of the statement of cash flows would the collection for rents appear?

Accepted Answer

A.$800 - $2,000 + $15,000 = $1

Question 17

On December 31,20A,the manager of Selfstorage Warehouses noticed that four tenants had not paid their December rent amounting to $50 each (and not yet recorded).Assuming the calendar year is the accounting year,give the adjusting entry required on December 31,20A.

Accepted Answer

The answer of On December 31,20A,the manager of Selfstorage Warehouses...

Question 18

On July 1,20A,Liz Company borrowed $5,000 cash and signed a one year note payable,interest 10 percent,payable on the maturity date,June 30,20B.The accounting period ends on December 31; therefore,the required adjusting entry on December 31,20A would be: Debit--Interest payable,$250; Credit--Interest expense,$250.

Accepted Answer

A) True 
 B)False

Question 19

A post-closing trial balance is the last trial balance that is prepared before the start of the next accounting period.

Accepted Answer

A) True 
 B)False

Question 20

Income tax payable is a temporary account; therefore,it is closed at the end of the accounting period.

Accepted Answer

A) True 
 B)False

The changes in revenues and expenses caused by accruals and deferrals are classified as which of the following?

As prepaid expenses expire with the passage of time,the correct adjusting entry will be a

The statement of cash flows shows the cash inflows,cash outflows,and change in cash for a period.

On March 1,20A,the premium on a two-year insurance policy on equipment was paid amounting to $1,800.At the end of 20A (end of the accounting period),the financial statements for 20A,would report which of the following?

The difference between the equipment account balance and the accumulated amortization equipment account balance is called which of the following?

The return on equity measures how well management used shareholders' investment to generate revenue during the period.

A trial balance prepared after the closing entries have been posted would exclude which one of the following accounts?

Air Cargo Company recorded the following adjusting entries at the end of the accounting year,December 31,20B: Give the closing entries for Air Cargo Company at December 31,20B.(You need not use the Income Summary account).

The dividends declared account should be closed to retained earnings at year-end.

Analysts,investors,and creditors use these same statements to evaluate performance as part of their share valuation and credit evaluation judgments.

Adjusting entries are necessary at the end of the accounting period to measure income properly and to provide appropriate amounts for financial statement accounts.

Deferred expenses are previously recorded liabilities that must be adjusted for the amount of expense incurred during the period.

A post-closing trial balance will show account balances for which of the following?

The unadjusted trial balance does not reflect adjusting entries.

On December 31,20A,the manager of Selfstorage Warehouses noticed that four tenants had not paid their December rent amounting to $50 each (and not yet recorded).Assuming the calendar year is the accounting year,give the adjusting entry required on December 31,20A.

A post-closing trial balance is the last trial balance that is prepared before the start of the next accounting period.

Income tax payable is a temporary account; therefore,it is closed at the end of 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

The changes in revenues and expenses caused by accruals and deferrals are classified as which of the following?

As prepaid expenses expire with the passage of time,the correct adjusting entry will be a

The statement of cash flows shows the cash inflows,cash outflows,and change in cash for a period.

On March 1,20A,the premium on a two-year insurance policy on equipment was paid amounting to $1,800.At the end of 20A (end of the accounting period),the financial statements for 20A,would report which of the following?

The difference between the equipment account balance and the accumulated amortization equipment account balance is called which of the following?

The return on equity measures how well management used shareholders' investment to generate revenue during the period.

A trial balance prepared after the closing entries have been posted would exclude which one of the following accounts?

Air Cargo Company recorded the following adjusting entries at the end of the accounting year,December 31,20B: Give the closing entries for Air Cargo Company at December 31,20B.(You need not use the Income Summary account).

The dividends declared account should be closed to retained earnings at year-end.

Analysts,investors,and creditors use these same statements to evaluate performance as part of their share valuation and credit evaluation judgments.

Adjusting entries are necessary at the end of the accounting period to measure income properly and to provide appropriate amounts for financial statement accounts.

Deferred expenses are previously recorded liabilities that must be adjusted for the amount of expense incurred during the period.

A post-closing trial balance will show account balances for which of the following?

The unadjusted trial balance does not reflect adjusting entries.

On December 31,20A,the manager of Selfstorage Warehouses noticed that four tenants had not paid their December rent amounting to $50 each (and not yet recorded).Assuming the calendar year is the accounting year,give the adjusting entry required on December 31,20A.

A post-closing trial balance is the last trial balance that is prepared before the start of the next accounting period.

Income tax payable is a temporary account; therefore,it is closed at the end of 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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