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accounting mcqs - A business pays weekly salaries of $20,000 on Friday for a five-day




Question;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 isAnswerdebit Salaries Payable, $8,000, credit Cash, $8,000debit Salary Expense, $8,000, credit Drawing, $8,000debit Salary Expense, $8,000, credit Salaries Payable, $8,000debit Drawing, $8,000, credit Cash, $8,0002 pointsQuestion 2Accrued expenses are ordinarily reported on the balance sheet asAnswerassetsliabilitiesfixed assetsprepaid expenses2 pointsQuestion 3Accrued revenues would appear on the balance sheet asAnswerassetsliabilitiescapitalprepaid expenses2 pointsQuestion 4Adjusting entries affect at least oneAnswerincome statement account and one balance sheet accountrevenue and the drawing accountasset and one owner's equity accountrevenue and one capital account2 pointsQuestion 5Adjusting entries areAnswerthe same as correcting entriesneeded to bring accounts up to date and match revenue and expenseoptional under generally accepted accounting principlesrarely needed in large companies2 pointsQuestion 6As 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 calledAnswerequipment allocationdepreciationaccumulationmatching2 pointsQuestion 7Austin, 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$1,4002 pointsQuestion 8By matching revenues and expenses in the same period in which they incurAnswernet income or loss will always be income or loss will always be income or loss will be properly reported on the income statementnet income or loss will not be determined.2 pointsQuestion 9Depreciation Expense and Accumulated Depreciation are classified, respectively, asAnswerexpense, contra assetasset, contra liabilityrevenue, assetcontra asset, expense2 pointsQuestion 10Generally accepted accounting principles requires that companies use the ____ of accounting.Answercash basisdeferral basisaccrual basisaccount basis2 pointsQuestion 11Prepaid expenses are eventually expected toAnswerbecome 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 pointsQuestion 12The difference between the balance of a fixed asset account and the related accumulated depreciation account is termedAnswerhistorical costcontra assetbook valuemarket value2 pointsQuestion 13The entry to adjust for the cost of supplies used during the accounting period isAnswerdebit Supplies Expense, credit Suppliesdebit Owner Capital, credit Suppliesdebit Accounts Payable, credit Suppliesdebit Supplies, credit Owner Capital2 pointsQuestion 14Which of the following is considered to be unearned revenue?AnswerConcert 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.Question 15Which of the following is an example of an accrued expense?AnswerSalary owed but not yet paidFees received but not yet earnedSupplies on handA two-year premium paid on a fire insurance policy2 pointsQuestion 16Which of the following is an example of accrued revenue?AnswerSwimming 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 pointsQuestion 17Which of the accounting steps in the accounting process below would be completed last?Answerpreparing the adjusted trial balancepostingpreparing the financial statementsjournalizing2 pointsQuestion 18When is the adjusted trial balance prepared?AnswerBefore adjusting journal entries are postedAfter adjusting journal entries are posted.After the adjusting journal entries are journalizedBefore the adjusting journal entries are journalized.2 pointsQuestion 19What is the purpose of the adjusted trial balance?Answerto verify that all of the adjusting entries have been postedto verify that the net income is correctly reportedto verify that no adjusting journal entry has been verify that the debits and credits balance2 pointsQuestion 20What 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?Answerdebit Insurance Expense, $6,000, credit Prepaid Insurance, $6,000debit Insurance Expense, $16,000, credit Prepaid Insurance, $16,000debit Prepaid Insurance, $10,000, credit Insurance Expense, $10,000debit Insurance Expense, $10,000, credit Prepaid Insurance, $10,0002 pointsQuestion 21Using accrual accounting, revenue is recorded and reported onlyAnswerwhen cash is received without regard to when the services are renderedwhen the services are rendered without regard to when cash is receivedwhen cash is received at the time services are renderedif cash is received after the services are rendered2 pointsQuestion 22Using accrual accounting, expenses are recorded and reported onlyAnswerwhen they are incurred, whether or not cash is paidwhen they are incurred and paid at the same timeif they are paid before they are incurredif they are paid after they are incurred2 pointsQuestion 23The net book value of a fixed asset is determined byAnswerOriginal cost less accumulated depreciationOriginal cost less depreciation expenseOriginal cost less accumulated depreciation plus depreciation expenseOriginal cost plus accumulated depreciation2 pointsQuestion 24Which one of the following accounts below would likely be included in a deferral adjusting entry?AnswerInterest RevenueUnearned RevenueSalaries PayableAccounts Receivable2 pointsQuestion 25The type of account and normal balance of Accumulated Depreciation isAnswerasset, creditasset, debitcontra asset, creditcontra asset, debit


Paper#43073 | Written in 18-Jul-2015

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