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Top of Form A business pays weekly salaries of $2...

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Top of Form A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is Answer debit Salaries Payable, $8,000; credit Cash, $8,000 debit Salary Expense, $8,000; credit Drawing, $8,000 debit Salary Expense, $8,000; credit Salaries Payable, $8,000 debit Drawing, $8,000; credit Cash, $8,000 2 points Question 2 Accrued expenses are ordinarily reported on the balance sheet as Answer assets liabilities fixed assets prepaid expenses 2 points Question 3 Accrued revenues would appear on the balance sheet as Answer assets liabilities capital prepaid expenses 2 points Question 4 Adjusting entries affect at least one Answer income statement account and one balance sheet account revenue and the drawing account asset and one owner's equity account revenue and one capital account 2 points Question 5 Adjusting entries are Answer the same as correcting entries needed to bring accounts up to date and match revenue and expense optional under generally accepted accounting principles rarely needed in large companies 2 points Question 6 As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called Answer equipment allocation depreciation accumulation matching 2 points Question 7 Austin, Inc. made a Prepaid Rent payment of $2,800 on January 1st. The company?s monthly rent is $700. The amount of Prepaid Rent that would appear on the January 31 balance sheet after adjustment is: Answer $2,100 $700 $3,500 $1,400 2 points Question 8 By matching revenues and expenses in the same period in which they incur Answer net income or loss will always be underestimated. net income or loss will always be overestimated. net income or loss will be properly reported on the income statement net income or loss will not be determined. 2 points Question 9 Depreciation Expense and Accumulated Depreciation are classified, respectively, as Answer expense, contra asset asset, contra liability revenue, asset contra asset, expense 2 points Question 10 Generally accepted accounting principles requires that companies use the ____ of accounting. Answer cash basis deferral basis accrual basis account basis 2 points Question 11 Prepaid expenses are eventually expected to Answer become expenses when their future economic value expires. become revenues when services are performed. become expenses in the period when they are paid. become revenues when the liability is no longer owed. 2 points Question 12 The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed Answer historical cost contra asset book value market value 2 points Question 13 The entry to adjust for the cost of supplies used during the accounting period is Answer debit Supplies Expense; credit Supplies debit Owner Capital; credit Supplies debit Accounts Payable; credit Supplies debit Supplies; credit Owner Capital 2 points Question 14 Which of the following is considered to be unearned revenue? Answer Concert tickets sold for tonight?s performance. Concert tickets sold yesterday on credit. Concert tickets that were not sold for the current performance. Concert tickets sold for next month?s performance. 2 points Question 15 Which of the following is an example of an accrued expense? Answer Salary owed but not yet paid Fees received but not yet earned Supplies on hand A two-year premium paid on a fire insurance policy 2 points Question 16 Which of the following is an example of accrued revenue? Answer Swimming pool cleaning that has been paid for three months in advance. Swimming pool cleaning that has been provided but has not been billed or paid. An agreement has been signed for swimming pool cleaning for the next three months. Swimming pool cleaning that has been provided and paid on the same day. 2 points Question 17 Which of the accounting steps in the accounting process below would be completed last? Answer preparing the adjusted trial balance posting preparing the financial statements journalizing 2 points Question 18 When is the adjusted trial balance prepared? Answer Before adjusting journal entries are posted After adjusting journal entries are posted. After the adjusting journal entries are journalized Before the adjusting journal entries are journalized. 2 points Question 19 What is the purpose of the adjusted trial balance? Answer to verify that all of the adjusting entries have been posted to verify that the net income is correctly reported to verify that no adjusting journal entry has been omitted. to verify that the debits and credits balance 2 points Question 20 What is the proper adjusting entry at April 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $16,000, and unexpired amounts per analysis of policies, $6,000? Answer debit Insurance Expense, $6,000; credit Prepaid Insurance, $6,000 debit Insurance Expense, $16,000; credit Prepaid Insurance, $16,000 debit Prepaid Insurance, $10,000; credit Insurance Expense, $10,000 debit Insurance Expense, $10,000; credit Prepaid Insurance, $10,000 2 points Question 21 Using accrual accounting, revenue is recorded and reported only Answer when cash is received without regard to when the services are rendered when the services are rendered without regard to when cash is received when cash is received at the time services are rendered if cash is received after the services are rendered 2 points Question 22 Using accrual accounting, expenses are recorded and reported only Answer when they are incurred, whether or not cash is paid when they are incurred and paid at the same time if they are paid before they are incurred if they are paid after they are incurred 2 points Question 23 The net book value of a fixed asset is determined by Answer Original cost less accumulated depreciation Original cost less depreciation expense Original cost less accumulated depreciation plus depreciation expense Original cost plus accumulated depreciation 2 points Question 24 Which one of the following accounts below would likely be included in a deferral adjusting entry? Answer Interest Revenue Unearned Revenue Salaries Payable Accounts Receivable 2 points Question 25 The type of account and normal balance of Accumulated Depreciation is Answer asset, credit asset, debit contra asset, credit contra asset, debit

 

Paper#10031 | Written in 18-Jul-2015

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