Exam 2: A Review of the Accounting Cycle

For a given year,beginning and ending total liabilities were $8,400 and $10,000,respectively.At year-end,owners' equity was $26,000 and total assets were $2,000 larger than at the beginning of the year.If new capital stock issued exceeded dividends by $2,400,net income (loss)for the year was apparently

The balance in a deferred revenue account represents an amount that is Earned Collected

An example of a nominal account would be

Sky Company collected $12,350 in interest during 2013.Sky showed $1,850 in interest receivable on its December 31,2013,balance sheet and $5,300 on December 31,2012.The interest revenue on the income statement for 2013 was

Which of the following criteria must be met before an event should be recorded for accounting purposes?

Account balances taken from the ledger of Middler Company on December 31,2013,are as follows: Adjustments on December 31,2013,are required as follows:

If an expense has been incurred but not yet recorded,then the end-of-period adjusting entry would involve

Kite Company paid $24,900 in insurance premiums during 2013.Kite showed $3,600 in prepaid insurance on its December 31,2013,balance sheet and $4,500 on December 31,2012.The insurance expense on the income statement for 2013 was

The basic financial statements are listed below: In which of the following sequences does the accountant ordinarily prepare the statements?

Ryan Company purchased a machine on July 1,2013.The machine cost $250,000 and has a salvage value of $10,000 and a useful life of eight years.The adjusting entry for the year ending December 31,2014,would include a debit to Depreciation Expense of

Winston Company sells magazine subscriptions for one- to three-year subscription periods.Cash receipts from subscribers are credited to Magazine Subscriptions Collected in Advance,and this account had a balance of $9,600,000 at December 31,2013,before year-end adjustment.Outstanding subscriptions at December 31,2013,expire as follows: In its December 31,2013,balance sheet,what amount should Winston report as the balance for magazine subscriptions collected in advance?

A bond issued June 1,2013,by a calendar-year company pays interest on April 1 and October 1.A bond is a financial security issued by a corporation in return for cash borrowed from investors.Bonds typically pay interest twice per year.The investor makes the investment on the date the bond is issued.Interest expense for 2013 is recognized on these bonds by the issuer for a period of

Total net income over the life of an enterprise is

In November and December 2013,Bee Company,a newly organized newspaper publisher,received $72,000 for 1,000 three-year subscriptions at $24 per year,starting with the January 2,2014,issue of the newspaper.How much should Bee report in its 2013 income statement for subscription revenue?

Iowa Cattle Company uses a perpetual inventory system.Iowa purchased cattle from Big D Ranch at a cost of $19,500,payable at time of delivery.The entry to record the delivery would be

An adjusting entry will not take the format of which one of the following entries?

On September 1,2012,Star Corp.issued a note payable to Federal Bank in the amount of $450,000.The note had an interest rate of 12 percent and called for three equal annual principal payments of $150,000.The first payment for interest and principal was made on September 1,2013.At December 31,2013,Star should record accrued interest payable of

If an inventory account is understated at year end,the effect will be to overstate the