Question 1

Unearned revenues are reported as liabilities on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

Selling inventory to a customer on account results in an increase in both assets and revenues.

Accepted Answer

A) True 
 B)False

Question 3

The operating cycle is the time that elapses between a company's cash payment to suppliers for inventory purchases and the collection of cash from sale of inventory to customers.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is correct?

Accepted Answer

A) Expense accounts result in decreases in net income and stockholders' equity and therefore have credit balances. 
B) Revenue accounts result in increases in net income and stockholders' equity and therefore have debit balances. 
C) Loss accounts result in decreases in net income and stockholders' equity and therefore have debit balances. 
D) Gain accounts result in increases in net income and stockholders' equity and therefore have debit balances. 
A) Expense accounts result in decreases in net income and stockholders' equity and therefore have credit balances. 
B) Revenue accounts result in increases in net income and stockholders' equity and therefore have debit balances. 
C) Loss accounts result in decreases in net income and stockholders' equity and therefore have debit balances. 
D) Gain accounts result in increases in net income and stockholders' equity and therefore have debit balances.

Question 5

The trial balance needs to be prepared prior to preparation of the income statement.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Accepted Answer

A) The cash account was credited for $47,000. 
B) Accounts payable was debited for $47,000. 
C) Supplies expense was increased by $47,000. 
D) Operating income was not changed by the payment to the suppliers. 
A) The cash account was credited for $47,000. 
B) Accounts payable was debited for $47,000. 
C) Supplies expense was increased by $47,000. 
D) Operating income was not changed by the payment to the suppliers.

Question 7

Which of the following best describes the expense recognition principle?

Accepted Answer

A) It requires expenses to be recorded when they are paid for. 
B) It requires expenses to be recorded when incurred to generate revenues. 
C) It requires expenses to be recorded consistent with the cash basis of accounting. 
D) It does not allow expenses to be recorded if they are incurred prior to being paiD.The expense recognition principle requires that expenses be recorded when incurred in generating revenue. 
A) It requires expenses to be recorded when they are paid for. 
B) It requires expenses to be recorded when incurred to generate revenues. 
C) It requires expenses to be recorded consistent with the cash basis of accounting. 
D) It does not allow expenses to be recorded if they are incurred prior to being paiD.The expense recognition principle requires that expenses be recorded when incurred in generating revenue.

Question 8

Which of the following best describes the operating cycle?

Accepted Answer

A) It is the length of the manufacturing process. 
B) It is the time that elapses from the purchase of inventory on account to the sale of inventory on account. 
C) It is the time that elapses from the completion of the manufacturing process to the cash collection from sale of the manufactured goods. 
D) It is the time that elapses from the cash payment to suppliers to collection of cash from customers. 
A) It is the length of the manufacturing process. 
B) It is the time that elapses from the purchase of inventory on account to the sale of inventory on account. 
C) It is the time that elapses from the completion of the manufacturing process to the cash collection from sale of the manufactured goods. 
D) It is the time that elapses from the cash payment to suppliers to collection of cash from customers.

Unearned revenues are reported as liabilities on the balance sheet.

Selling inventory to a customer on account results in an increase in both assets and revenues.

The operating cycle is the time that elapses between a company's cash payment to suppliers for inventory purchases and the collection of cash from sale of inventory to customers.

Which of the following statements is correct?

The trial balance needs to be prepared prior to preparation of the income statement.

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Which of the following best describes the expense recognition principle?

Which of the following best describes the operating cycle?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

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

PPA: Reporting and Interpreting Investments in Other Corporations

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Exam 3: Operating Decisions and the Accounting System

Unearned revenues are reported as liabilities on the balance sheet.

Selling inventory to a customer on account results in an increase in both assets and revenues.

The operating cycle is the time that elapses between a company's cash payment to suppliers for inventory purchases and the collection of cash from sale of inventory to customers.

Which of the following statements is correct?

The trial balance needs to be prepared prior to preparation of the income statement.

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Which of the following best describes the expense recognition principle?

Which of the following best describes the operating cycle?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

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

PPA: Reporting and Interpreting Investments in Other Corporations

Filters