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Study Resources (Accounting)

11) Which of the following accounts does cash basis accounting ignore? A) Payables B) Revenue C) Cash D) Expenses 12) Two weeks earlier, a business had rendered services to one of its customers on account for which the payment was received today. Which of the following entries would be recorded if the company uses accrual.
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11) Which of the following accounts are included in an income statement? A) Land, Salaries Payable B) Owner's Name, Capital, Owner's Contribution C) Furniture, Cash D) Service Revenue, Utilities Expense 12) Property, plant and equipment are categorized as: A) current assets. B) fixed assets. C) long-term investments. D) short-term investments. 13) Patents, copyrights, and trademarks are examples of: A) short-term investments. B).
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Learning Objective 4-7 1) Generally Accepted Accounting Principles (GAAP) require every organization to prepare reversing entries. 2) Reversing entries ease the burden of accounting for transactions in a later period. 3) Reversing entries are dated on the first day of the new accounting period. 4) A reversing entry is: A) a journal entry used to.
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Learning Objective 3-1 1) Under accrual accounting, transactions are recorded only when cash is received or paid. 2) The owner of Recipes.org purchased $2,000 of supplies on account. Under the accrual basis of accounting, no entry is made until the $2,000 is paid. 3) In cash basis accounting, revenue is recognized when cash.
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71) Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost, $6,720 with useful life of 8 years; Furniture: Cost, $18,000 with useful life of 12 years; and Computer: Cost, $12,000 with useful life of 4 years. Ursula's monthly depreciation expense calculated using the straight-line method is: (Assume salvage.
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31) Which of the following account's balance is carried forward to the next accounting period? A) Accumulated Depreciation B) Depreciation Expense C) Owner's Name, Withdrawals D) Sales Revenue 32) Which is a permanent account? A) Wages Expense B) Salary Payable C) Service Revenue D) Utilities Expense 33) Which of the following accounts will be closed by debiting the Income Summary.
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Learning Objective 2-3 1) Source documents provide the evidence and data for accounting transactions. 2) Debits in the journal are always posted as debits in the ledger. 3) The process of transferring data from the ledger to the journal is called posting. 4) A journal entry under the double-entry system includes both debit and.
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21) Under which of the following categories would Accounts Payable appear? A) Long-term assets B) Current assets C) Long-term liabilities D) Current liabilities 22) Which of the following is a plant asset? A) Equipment B) Patents C) Trademark D) Accounts Receivable 23) The Notes Payable that are due within two years are classified as: A) current liabilities. B) current assets. C) long-term liabilities. D).
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Learning Objective 4-4 1) GAAP requires publicly traded companies to prepare a post-closing trial balance and publish it in their annual report. 2) The post-closing trial balance shows the updated capital balance. 3) The post-closing trial balance shows the net income for the period just ended. 4) Only permanent accounts appear on the post-closing.
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Learning Objective 3-4 1) An adjusted trial balance does not list the revenues and expenses of a business. 2) The adjusted trial balance helps to identify: A) account balances after adjustments. B) revenue accounts only. C) account balances before adjustments. D) amounts that are out of balance. 3) Deborah Consultants had the following accounts and account balances.
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Learning Objective 4-5 1) The steps of the accounting cycle are followed throughout the accounting period. 2) The operating cycle is the process by which companies produce their financial statements for a specific period. 3) In an accounting cycle, an analysis of transactions is performed at the end of each accounting period. 4) The.
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11) The assumption that the financial statements of a business can be prepared for specific periods is made by the: A) matching principle. B) revenue recognition principle. C) time period concept. D) adjusting entry principle. 12) The matching principle states that: A) financial statements can be prepared for specific periods. B) a business's activities can be sliced.
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21) The following are the current month's balances for Toys Galore: Accounts Payable $8,000 Revenue 10,000 Cash 5,000 Expenses 1,750 Furniture 12,000 Accounts Receivable 14,000 Jones, Capital 8,250 Notes Payable 6,500 Calculate the total amount of credits for the trial balance. A) $24,500 B) $22,750 C) $24,750 D) $32,750 22) The following are the current month's balances for Toys Galore: Accounts Payable $8,000 Revenue 10,000 Cash 5,000 Expenses 1,750 Furniture 12,000 Accounts Receivable 14,000 Jones, Capital 8,250 Notes Payable 6,500 What is the total amount of debits for the.
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  Learning Objective 5-1 1) A wholesaler is a merchandiser who buys merchandise from a manufacturer and sells the same to a retailer. 2) Hitech Inc., a small, local grocer, without optical scanning cash registers and computer systems, wants to introduce an inventory system to track its inventory. The perpetual inventory system is.
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31) The balances of select accounts of Sandra Company as at December 31, 2015 are given below: Notes Payable—short term $1,200 Salaries Payable 4,000 Notes Payable—long term 25,000 Accounts Payable 3,200 Unearned Revenue 2,000 Interest Payable 2,500 The unearned revenue is the amount of cash received for services to be rendered in January, 2016. What are the total current liabilities shown on the.
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Learning Objective 4-6 1) The current ratio is calculated using the values from the income statement. 2) The current ratio shows the profitability of a firm. 3) The smaller the current ratio, the higher is the ability of a firm to repay its current debts. 4) A current ratio that has increased from the.
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Learning Objective 3-2 1) The revenue recognition principle is the basis for recording revenues—both when to record revenue and the amount of revenue to record. 2) In accounting terms, the calendar year is always called the fiscal year. 3) Which of the following is considered a fiscal year? A) six months B) three months C) twelve.
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  Learning Objective 4-1 1) In the balance sheet, assets are classified as either current or long-term depending on their liquidity. 2) Prepaid Rent is always classified as a long-term asset. 3) The operating cycle is the time span required for a business to repay its long-term liabilities. 4) A balance sheet prepared in the.
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11) Which of the following accounts will be included in a post-closing trial balance? A) Owner's Name, Withdrawals B) Salaries Expense C) Owner's Name, Capital D) Office Supplies Expense 12) The adjusted trial balance of Michael's Shutterbug Photography at December 31, 2015 is as follows: AccountsDebitCredit Cash$15,000 Accounts Receivable30,000 Prepaid Insurance7,500 Supplies3,200 Building160,000 Accumulated Depreciation—Building$12,000 Equipment75,000 Accumulated Depreciation—Equipment8,500 Land40,000 Accounts Payable12,000 Salaries Payable2,000 Unearned Service Revenue25,000 Mortgage Payable100,000 Michael, Capital21,290 Michael,.
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21) Which of the following accounts would appear in the income statement debit column? A) Unearned Service Revenue B) Service Revenue C) Depreciation Expense D) Prepaid Insurance 22) The following is the adjusted trial balance from the worksheet for Tuttle Photography. Tuttle Photography Worksheet For the Year Ended December 31, 2015 AccountsDebitCredit Cash$15,000 Accounts Receivable30,000 Prepaid Insurance7,500 Office Supplies3,200 Building160,000 Accumulated Depreciation—Building$12,000 Equipment75,000 Accumulated Depreciation—Equipment8,500 Land40,000 Accounts Payable12,000 Salaries Payable2,000 Unearned.
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11) The accountant of Hobson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following statements is true? A) The total revenue will be overstated. B) The total revenue will be understated. C) The total expenses.
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Learning Objective 4-2 1) The last two columns generally found on the right side of the worksheet are the income statement columns. 2) Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet. 3).
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11) The Office Supplies account is a temporary account. 12) The Office Supplies Expense account is a temporary account. 13) The Accounts Payable account is a temporary account. 14) The Salaries Payable account is a permanent account. 15) The Owner's Name, Capital account is a temporary account. 16) The Accumulated Depreciation account is a permanent.
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11) Which of the following is a financial statement that presents a business's accounting equation? A) chart of accounts B) trial balance C) income statement D) balance sheet 12) Which of the following is used by both internal and external users to the company? A) chart of accounts B) trial balance C) balance sheet D) costing reports 13) Which of.
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49) The following is the adjusted trial balance as of December 31, 2015 of Current Times Watch Company: AccountsDebitCredit Cash$18,000 Accounts Receivable30,000 Prepaid Insurance9,000 Office Supplies3,200 Building165,000 Accumulated Depreciation—Building$12,000 Equipment88,000 Accumulated Depreciation—Equipment8,500 Land45,000 Accounts Payable12,000 Salaries Payable2,000 Unearned service revenue25,000 Mortgage Payable100,000 Martin, Capital21,290 Martin, Withdrawals25,840 Service Revenue325,000 Salaries Expense63,000 Depreciation Expense—Building and Equipment6,250 Office Supplies Expense15,000 Insurance Expense14,500 Utilities Expense23,000_______ Total$505,790$505,790 Provide the closing entry for the Income Summary account. 50) The following is.
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11) An entity that buys goods and sells them to customers at a markup is a: A) merchandiser. B) service provider. C) manufacturer. D) producer. 12) Gross profit is calculated as the difference between net sales revenue and: A) purchases. B) cost of goods sold. C) cost of merchandise inventory. D) selling and administrative expenses. 13) The Gajet Store Inc..
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11) Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet? A) Rent Revenue B) Insurance Expense C) Salaries Payable D) Equipment 12) Where does Net Income appear on a worksheet? A) Net income appears only in the income statement debit column. B) Net income appears in the balance sheet.
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41) Which of the following is a contra account? A) Depreciation Expense B) Accumulated Depreciation C) Unearned Revenue D) Earned Revenue 42) Accrued revenue is revenue that: A) has been collected and earned. B) the business has collected in cash, but not yet earned. C) the business has earned, but not yet collected in cash. D) will be collected.
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51) Sharon Company reported the following transactions for September, 2015. A)Sharon started the business with a capital contribution of $25,000 cash. It was credited to Sharon, Capital. B)The business purchased office equipment for $11,500 for which $2,500 cash was paid and the balance was put on a note payable. C)Paid insurance expense of.
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Learning Objective 3-7 1) Patricia Event Planning Service records prepaid expenses and unearned revenues using the alternative treatments. Patricia makes adjusting entries as needed to bring her books to the full accrual basis once a year at the end of the year. On October 1, she paid $3,600 for insurance for.
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21) The Owner's Name, Withdrawals account is a permanent account. 22) The Owner's Name, Capital account is a permanent account. 23) The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance.
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Learning Objective 4-3 1) The adjusting process zeroes out all revenues and all expenses. 2) The closing process helps in measuring each period's net income separately from all other periods. 3) Permanent accounts are not closed at the end of the accounting period. 4) As a part of the closing process, revenues and expenses.
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41) A business pays cash back to the owner. Which of the following accounts will be debited? A) Cash B) Smith, Withdrawals C) Accounts Payable D) Smith, Capital 42) The owner of a business withdrew cash for personal use. Which of the following accounts will be credited? A) Smith, Capital B) Smith, Withdrawals C) Cash D) Accounts Payable 43) An.
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Learning Objective 3-3 1) Accrued revenues are the income that has been received but not earned. 2) Prepaid insurance is an asset account, and hence it appears on the balance sheet. 3) Prepaid rent is an expense account, and hence it appears on the income statement. 4) A contra account's normal balance (debit or.
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11) The current ratio measures a company's: A) overall ability to pay liabilities. B) ability to pay current liabilities with current assets. C) the proportion of assets that are financed by debt. D) rate of cash flow. 12) The following contains information from the records of the Wellborn Engineers and Architects. Current Assets $74,000 Current Liabilities 44,000 Long-term Assets 95,000 Long-term Liabilities 60,000 Total.
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31) The entry to record depreciation includes a credit to: A) the Depreciation Payable account. B) the Cash account. C) the Accumulated Depreciation account. D) the Depreciation Expense account. 32) If an adjusting entry includes a debit to Rent Expense, that would indicate that the payment of rent had been previously recorded as a(n): A) prepaid.
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Learning Objective 3-6 1) A worksheet is an external document that forms a part of the financial statements. 2) The worksheet is NOT a journal, a ledger, or a financial statement. 3) GAAP requires a public company to prepare a worksheet for financial reporting purposes. 4) An internal document that helps summarize data for.
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