Question 1

Explain the difference between cash basis accounting and accrual basis accounting.

Accepted Answer

Accrual basis accounting recog

Question 2

Sharp Massage Co.unadjusted trial balance is as follows:   Use the following information to prepare any adjusting entries required:

Accepted Answer

The answer of Sharp Massage Co.unadjusted trial balance is as...

Question 3

The two main accounting principles used in the adjusting process are matching and full disclosure.

Accepted Answer

A) True 
 B)False

Question 4

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

Accepted Answer

A)  Operating cycle of a business. 
B)  Timeliness principle. 
C)  Going-concern principle. 
D)  Matching principle. 
E)  Accrual basis of accounting. 
A)  Operating cycle of a business. 
B)  Timeliness principle. 
C)  Going-concern principle. 
D)  Matching principle. 
E)  Accrual basis of accounting.

Question 5

Prepaid expenses,depreciation,and unearned revenues each reflect transactions where cash is received or paid ______________ a related expense or revenue is recognized.

Accepted Answer

The answer of Prepaid expenses,depreciation,and unearned revenues each reflect transactions...

Question 6

On May 1,2015.Bee Advertising Company received $2,500 from Julie Cee for advertising services to be completed by April 30,2016.Assume the receipt was recorded as unearned fees and that at December 31,2015,$1,000 of the fees had been earned.The adjusting entry prepared by Bee on December 31,2015,should include:

Accepted Answer

A)  A debit to Unearned Fees for $500. 
B)  A credit to Unearned Fees for $500. 
C)  A credit to Earned Fees for $1,000. 
D)  A debit to Earned Fees for $1,000. 
E)  A debit to Earned Fees for $500. 
A)  A debit to Unearned Fees for $500. 
B)  A credit to Unearned Fees for $500. 
C)  A credit to Earned Fees for $1,000. 
D)  A debit to Earned Fees for $1,000. 
E)  A debit to Earned Fees for $500.

Question 7

Generally,accrual basis accounting results in a more accurate measurement of net income for the period than does cash basis accounting.

Accepted Answer

A) True 
 B)False

Question 8

Under the alternative method for recording unearned revenue,the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 9

Discuss the importance of periodic reporting and the timeliness principle.

Accepted Answer

For information to be valuable to decisi

Question 10

On January 31 of this year,Gallery Corp.recorded 2 days of accrued salaries ($140)for its employees.On February 13,the company paid its employees a total of $700.The correct journal entries at January 31 and February 13 are:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
E) 
  
A) 
  
B) 
  
C) 
  
D) 
  
E)

Question 11

Lightning Advisory Service's unadjusted and adjusted trial balances on December 31,2015 are as follows:   In general journal form,prepare the adjusting entries that were recorded by Lightning Advisory Service.

Accepted Answer

The answer of Lightning Advisory Service's unadjusted and adjusted trial...

Question 12

An account the balance of which is subtracted from the balance of a related account so that more complete information than simply the net amount is provided is a(n):

Accepted Answer

A)  Accrued expense. 
B)  Contra account. 
C)  Accrued revenue. 
D)  Prepaid expense. 
E)  Withdrawal. 
A)  Accrued expense. 
B)  Contra account. 
C)  Accrued revenue. 
D)  Prepaid expense. 
E)  Withdrawal.

Question 13

The 12-month period that ends when a company's activities are at their lowest point is called the:

Accepted Answer

A)  Fiscal year. 
B)  Calendar year. 
C)  Natural business year. 
D)  Accounting period. 
E)  Interim period. 
A)  Fiscal year. 
B)  Calendar year. 
C)  Natural business year. 
D)  Accounting period. 
E)  Interim period.

Question 14

On April 1,Gallery Corp.entered into a two-month contract for $50,000.Gallery Corp.earned $25,000 of the contract in April and billed the customer.Gallery Corp.should recognize the revenue when it receives the customer's cheque.

Accepted Answer

A) True 
 B)False

Question 15

Lang leased a portion of its store to Pang for 12 months beginning on November 1,at a monthly rate of $400.Pang paid the entire $4,800 on November 1,which Lang recorded as unearned revenue.The journal entry made by Lang at year-end,December 31,would include:

Accepted Answer

A)  A debit to Rent Earned for $400. 
B)  A credit to Unearned Rent for $400. 
C)  A debit to Cash for $800. 
D)  A credit to Rent Earned for $800. 
E)  A debit to Unearned Rent for $4,800. 
A)  A debit to Rent Earned for $400. 
B)  A credit to Unearned Rent for $400. 
C)  A debit to Cash for $800. 
D)  A credit to Rent Earned for $800. 
E)  A debit to Unearned Rent for $4,800.

Question 16

Before recording adjusting entries,the Office Supplies account had a $359 debit balance while a physical count of the supplies showed $105 of unused supplies on hand.Thus,the required adjusting entry is:

Accepted Answer

A)  Debit Office Supplies $105 and credit Office Supplies Expense $105. 
B)  Debit Office Supplies Expense $254 and credit Office Supplies $254. 
C)  Debit Office Supplies Expense $105 and credit Office Supplies $105. 
D)  Debit Office Supplies $254 and credit Office Supplies Expense $254. 
E)  Some other entry. 
A)  Debit Office Supplies $105 and credit Office Supplies Expense $105. 
B)  Debit Office Supplies Expense $254 and credit Office Supplies $254. 
C)  Debit Office Supplies Expense $105 and credit Office Supplies $105. 
D)  Debit Office Supplies $254 and credit Office Supplies Expense $254. 
E)  Some other entry.

Question 17

For the current year,the net income of Alpha and Omega was incorrectly calculated as $547,715 for the year ended December 31.You are called in as the accountant to determine the correct net income.After examination of the accounts,you find the following errors:   Calculate the correct net income for this year.

Accepted Answer

The answer of For the current year,the net income of...

Question 18

In January,Denton Mabrey College received $120,000 in Unearned Tuition Revenue from its students for the spring semester,which lasts four months.On January 31,the college should recognize which amount for tuition revenue?

Accepted Answer

A)  $30,000. 
B)  $60,000. 
C)  $80,000. 
D)  $90,000. 
E)  $120,000. 
A)  $30,000. 
B)  $60,000. 
C)  $80,000. 
D)  $90,000. 
E)  $120,000.

Question 19

In accrual basis accounting,accrued revenues are recorded as liabilities.

Accepted Answer

A) True 
 B)False

Question 20

Gallery Corp.owes its employees $7,000 for the week ended March 31.The company will pay the employees on April 5.The adjusting journal entry prepared on March 31 will include a debit to Salaries Expense and a credit to Cash.

Accepted Answer

A) True 
 B)False

Explain the difference between cash basis accounting and accrual basis accounting.

Sharp Massage Co.unadjusted trial balance is as follows: Use the following information to prepare any adjusting entries required:

The two main accounting principles used in the adjusting process are matching and full disclosure.

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

Prepaid expenses,depreciation,and unearned revenues each reflect transactions where cash is received or paid ______________ a related expense or revenue is recognized.

Generally,accrual basis accounting results in a more accurate measurement of net income for the period than does cash basis accounting.

Under the alternative method for recording unearned revenue,the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

Discuss the importance of periodic reporting and the timeliness principle.

On January 31 of this year,Gallery Corp.recorded 2 days of accrued salaries ($140)for its employees.On February 13,the company paid its employees a total of $700.The correct journal entries at January 31 and February 13 are:

Lightning Advisory Service's unadjusted and adjusted trial balances on December 31,2015 are as follows: In general journal form,prepare the adjusting entries that were recorded by Lightning Advisory Service.

An account the balance of which is subtracted from the balance of a related account so that more complete information than simply the net amount is provided is a(n):

The 12-month period that ends when a company's activities are at their lowest point is called the:

On April 1,Gallery Corp.entered into a two-month contract for $50,000.Gallery Corp.earned $25,000 of the contract in April and billed the customer.Gallery Corp.should recognize the revenue when it receives the customer's cheque.

Lang leased a portion of its store to Pang for 12 months beginning on November 1,at a monthly rate of $400.Pang paid the entire $4,800 on November 1,which Lang recorded as unearned revenue.The journal entry made by Lang at year-end,December 31,would include:

Before recording adjusting entries,the Office Supplies account had a $359 debit balance while a physical count of the supplies showed $105 of unused supplies on hand.Thus,the required adjusting entry is:

In January,Denton Mabrey College received $120,000 in Unearned Tuition Revenue from its students for the spring semester,which lasts four months.On January 31,the college should recognize which amount for tuition revenue?

In accrual basis accounting,accrued revenues are recorded as liabilities.

Gallery Corp.owes its employees $7,000 for the week ended March 31.The company will pay the employees on April 5.The adjusting journal entry prepared on March 31 will include a debit to Salaries Expense and a credit to Cash.

Accounting in Business

Analyzing and Reporting Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters

Exam 3: Adjusting Accounts for Financial Statements

Explain the difference between cash basis accounting and accrual basis accounting.

Sharp Massage Co.unadjusted trial balance is as follows: Use the following information to prepare any adjusting entries required:

The two main accounting principles used in the adjusting process are matching and full disclosure.

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

Prepaid expenses,depreciation,and unearned revenues each reflect transactions where cash is received or paid ______________ a related expense or revenue is recognized.

Generally,accrual basis accounting results in a more accurate measurement of net income for the period than does cash basis accounting.

Under the alternative method for recording unearned revenue,the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

Discuss the importance of periodic reporting and the timeliness principle.

On January 31 of this year,Gallery Corp.recorded 2 days of accrued salaries ($140)for its employees.On February 13,the company paid its employees a total of $700.The correct journal entries at January 31 and February 13 are:

Lightning Advisory Service's unadjusted and adjusted trial balances on December 31,2015 are as follows: In general journal form,prepare the adjusting entries that were recorded by Lightning Advisory Service.

An account the balance of which is subtracted from the balance of a related account so that more complete information than simply the net amount is provided is a(n):

The 12-month period that ends when a company's activities are at their lowest point is called the:

On April 1,Gallery Corp.entered into a two-month contract for $50,000.Gallery Corp.earned $25,000 of the contract in April and billed the customer.Gallery Corp.should recognize the revenue when it receives the customer's cheque.

Lang leased a portion of its store to Pang for 12 months beginning on November 1,at a monthly rate of $400.Pang paid the entire $4,800 on November 1,which Lang recorded as unearned revenue.The journal entry made by Lang at year-end,December 31,would include:

Before recording adjusting entries,the Office Supplies account had a $359 debit balance while a physical count of the supplies showed $105 of unused supplies on hand.Thus,the required adjusting entry is:

In January,Denton Mabrey College received $120,000 in Unearned Tuition Revenue from its students for the spring semester,which lasts four months.On January 31,the college should recognize which amount for tuition revenue?

In accrual basis accounting,accrued revenues are recorded as liabilities.

Gallery Corp.owes its employees $7,000 for the week ended March 31.The company will pay the employees on April 5.The adjusting journal entry prepared on March 31 will include a debit to Salaries Expense and a credit to Cash.

Accounting in Business

Analyzing and Reporting Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters