Accounting Exam 1 example #20346

Liabilities are reported on the

The monetary value charged to customers for the performance of services sold is called a(n)

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

An end-of-period spreadsheet includes columns for

Which of the following is NOT an essential part of the accounting records

The increases in stockholders equity attributes to selling services or products to customers are called

A business's current assets divided by its current liabilities is equal to its

Accounts

The process of initially recording a business transaction is called

Which one of the fixed asset accounts listed below will NOT have a related contra asset account

The process of recording a transaction in the journal is called

Accrued expenses are ordinarily reported on the balance sheet as

Prepaid insurance is reported on the balance sheet as a

The process of transferring the debits and credits from the journal entries to the accounts is called

The account type and normal balance of unearned revenue is

What is the first account that should be listed on the post closing trial balance

The debt created by a business when it makes a purchase on account is referred to as an

What effect will this adjusting journal entry have on the accounting records? Supplies expense 760 Supplies 760

Which of the following groups of accounts have a normal debit balance?

Prepaid advertising, representing payments for the next quarter, would be reported on the balance sheet as a(n)

If there is a balance in the unearned subscription account after adjusting entries are made, it represents a(n)

The type of account and normal balance of prepaid insurance is

Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8400 and recorded it as a prepaid expense. Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month fo operations on March 31?

Many countries outside the U.S. use financial accounting standards issued by the

The ________ is where a transaction can first be found in the accounting records

Which of the following accounts is a stockholders equity account?

Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies

If an adjusting entry is made on the last day of the current accounting period by debiting Wages Expense and crediting Wages Payable for accrued wages earned but not yet paid, a reversing entry on the first day of the next accounting period will:

A list of the accounts used by a business is called the

Two common areas of accounting that respectively provide information to internal and external users are

The assets section of the balance sheet normally presents assets in

Diane's Design purchased a one year liability insurance policy on March 1 of a year for $4680 & recorded it as a prepaid expense. Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month of operations on March 31?

The income summary account is also called

Which of the following is a service business?

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

The classification and normal balance of the accounts payable account is

Which of the following is an example of a prepaid expense?

Which of the following accounts is a liability?

Generally accepted accounting principles require that companies use the ____ of accounting

Debts owed by a business are referred to as

A group of accounts for a business entity is called a

A list of accounts in the ledger is called a

Resources owned by the business entity

Debts owed to outsiders (creditors)

_______ account represents distributions of earnings to stockholders

a transaction is initially entered in a record is called a

When a business agrees that a customer may pay for services provided at a later date, a _____ is created

What occurs when the order of the digits is copied incorrectly, such as writing $542 as 452

A ____ is where the entire number is copied incorrectly one or more spaces to the right or the left, such as writing 542.00 as 54.20

Under the ____ revenues are reported on the income statement in the period in which a service has been performed or a product has been delivered

Under the ___, revenues and expenses are reported on the income statement in the period in which cash is received or paid

Under the _______ revenues are recorded when services have been performed or products have been delivered to customers

Under the _____, the expense incurred in generating revenue must be reported in the same period as the related revenue

The analysis and updating of accounts at the end of the period before the financial statements are prepared is called the

The journal entries that bring the accounts up to date at the end of the accounting period are called

The two general classifications of accounts requiring adjustment are

Physical resources that are owned and used by a business and are permanent or have a long life

Written promises by the customer to pay the amount of the note and interest

a temporary account that is only used during the closing process

The accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance is called the

The annual accounting period adopted by a business is known as its

When a corporation adopts a fiscal year that ends when business activities have reached the lowest point in its annual operating cycle, such as fiscal year is called

The ability to convert assets into cash is called

The ability of a business to pay its debts is called

The excess of the current assets of a business over its current liabilities

Accrued revenues are revenues that

All adjusting entries effect

Revenue is recorded when services have been performed or products have been delivered to customers. The accounting principle supporting this reporting is

if an adjustment for $7500 in accrued revenues is omitted, how will this affect the financial statements?

The recording of adjusting entries is supported by the

Barry Company received $8000 full payment in advance for services that are 60 percent complete at the end of the period. The adjusting entry will

The $9,600 balance in Fellow's Company's prepaid insurance account represents 6 months of insurance. The insurance was purchased on December 1. Which of the following should be included in the adjusting journal of entry on December 31?

Which statement is true regarding the cash basis of accounting?

If the adjustment for accrues expenses is not recorded

The adjusting entry for accrued revenues includes a

If the adjustment for accrued revenue is not recorded

Clever Computers has a five-day work week and pays the office staff $3,050 each week. If the month ends on a Thursday, the adjusting entry will credit Wages Payable for

Which of the following represents an accrual?

The adjusting entry for accrued revenues

Brown Co. pays weekly salaries of $10,500 on Friday for a five-day workweek ending on that day. Assuming the end of the accounting period ends on Wednesday, the adjusting journal entry will include a

On December 15, Jay Cleaning Co. agreed to provide Kay Co. with bimonthly cleaning services for its offices. The services will be billed to Kay Co. on the fifteenth of each month at a rate of $400. As of December 31, Jay Cleaning has provided its first cleaning of Kay's offices. The adjusting entry for Jay's Cleaning should include a

Which of the following would be classified as unearned revenue?

Prepaid expenses

If the adjustment of unearned revenue is not recorded

The unearned subscriptions account reflected a balance of $32,500 prior to any adjustments. It is determined that $9,800 in subscriptions remain unearned at the end of the period. The adjusting journal entry should include a

Which of the following represents a deferral?

GreenSource Company began the period with $330 in supplies. During the month, an additional $1,500 of supplies were purchased. A physical inventory at the end of the period revealed that there were $585 of supplies on hand. The adjusting entry should include a

If the adjustment for unearned revenues is not recorded

The balance in the unearned rent account for Jackson Co. as of December 31 is $1,500. If Jackson, Co. failed to record the adjusting entry of $500 of rent earned in December, the effect on the balance sheet and income statement for December would be

Unearned revenues

If the adjustment for prepaid expenses is not recorded

Which of the following would be classified as unearned revenue?

If the adjustment for depreciation is not recorded

If the estimated amount of depreciation on equipment for a period is $3,500, the adjusting entry to record depreciation would be

The difference between the cost of a fixed asset and its accumulated depreciation is known as its

When recording the adjusting entry for depreciation expense, the fixed asset account balance

Boxer Company purchased store equipment for $12,000 on December 3. The store equipment depreciated $500 in December. The book value of the store equipment on December 31 is

If the following adjusting entry is omitted, what effect will it have on the financial statements? Unearned rent 1,900 Rent revenue 1,900

Adjusting entries are dated

When recording an adjusting entry for prepaid expenses

Which of the following is true regarding adjusting entries?

Because collecting the adjustment data requires time, the adjusting entries are often

If the following adjusting entry is omitted, what effect will it have on net income? Depreciation Expense 4,300 Accumulated Depreciation 4,300

When recording an adjusting entry for unearned revenues

All of the following are types of adjustments except

If an adjustment for salaries earned but not recorded or paid in the amount of $85,000 were to be omitted, how would this affect the financial statements?

After which of the following errors would the adjusted trial balance totals NOT agree?

Once the adjusted trial balance is balanced, it can be used to prepare

The purpose of the adjusted trial balance is to verify

Which of the following errors would cause the adjusted trial balance to be unequal?

Which of the following would not cause the adjusted trial balance totals to be unequal?

In the vertical analysis of an income statement

Which of the following statements is NOT true about vertical analysis?

Using the following information, prepare a vertical analysis of two years' income statements. Fees earned is $153,500 for year 2 and $149,700 for year 1. Operating expenses are $122,800 for year 2 and $127,245 for year 1. Which of the following statements is true?

Comparing each line of a financial statement with a total amount from the same financial statement is referred to as

Vertical analysis can be used to analyze changes

Which of the following statements is true about vertical analysis?

Which of the following is NOT true regarding the flow of information from the adjusted trial balance on the end-of-period spreadsheet?

Using an end-of-period spreadsheet, the flow of accounting information moves from the

The balance of the dividends account on the adjusted trial balance of the end-of-period spreadsheet flows into which of the following financial statements?

On the end-of-period spreadsheet, Prepaid Insurance has a balance of $2,400 in the Unadjusted Trial Balance Debit column and an adjustment of $200 in the adjustments credit column. What amount should appear for Prepaid Insurance in the Adjusted Trial Balance column and ultimately the balance sheet?

Which of the following is true regarding the end-of-period spreadsheet?

Which of the following is true regarding the flow of information from the adjusted trial balance on the end-of-period spreadsheet?

On the end-of-period spreadsheet, Accumulated Depreciation has a balance of $600 in the Unadjusted Trial Balance column and an adjustment of $200 in the Adjusted Credit column. What amount should appear for Accumulated Depreciation in the Adjusted Trial Balance column?

All of the following statements are true regarding retained earnings EXCEPT

Which of the following are examples of subsections found on a classified balance sheet?

The listing of expenses on the income statement is ordered

Total liabilities and stockholders' equity equals $44,750, total current assets equal $19,800, land equals $15,000, and accumulated depreciation-- equipment equals $1,550. What is the amount of equipment on the balance sheet?

Which of the following will increase retained earnings on the retained earnings statement?

The following is the retained earnings statement for Cloud Computer Service Company: Retained Earnings Jan. 1 $17,068 Net income $?????? Dividends (5,000) Change in RE $???? Retained Earnings Dec 31 $18,905 Calculate the net income to complete the statement

Which of the following will be reported in the subsection of the balance sheet called current assets?

Total revenues equal $25,700, and total expenses equal $17,500. What is the amount of net income or loss?

Which of the following is true regarding the income statement?

Which of the following accounts will be closed with a credit?

What is the purpose of the income summary account?

The following are income and expense items on the adjusted trial balance of Barker Company: Fees earned $18,791 Rent Expense $4,600 Wages Expense $5,678 Miscellaneous Expense $440 Which of the following will be included in the second closing entry?

After the first two closing entries have been made, the income summary account has a debit of $49,850 and a credit of $78,200. The third closing entry would include a

Which of the following accounts will NOT be closed at the end of the accounting cycle?

The following are SOME of the steps in the accounting cycle. Which of the following reflects the steps in the correct order? A) Financial statements are prepared B) An unadjusted trial balance is prepared C) Closing entries are journalized and posted to the ledger D) Journalized business transactions are posted to the ledger E) A post-closing trial balance is prepared

Of the following, which step is NOT a requirement during the accounting cycle?

Of the following steps of the accounting cycle, which step should be completed last?

In which of the following steps of the accounting cycle will the clearing account be used?

The journal entry to record $4,500 cash received from clients on account would include a

Which of the following is the last step of the posting process?

The posting of depreciation expense will be done during which step of the accounting cycle?

A company's net income or net loss for a period is determined during which of the following steps of the accounting cycle?

The journal entry to record a payment of dividends includes a

What is the major difference between the post-closing trial balance and the other two trial balances?

The journal entry to record $6,000 cash received for $7,000 services performed would include

The following are reasons to close the accounts at the end of the year EXCEPT

A calendar year ends

The annual accounting period (fiscal year) most commonly adopted by businesses is

The natural business year ends

The fiscal year selected by a company

Why is it favorable to select a fiscal year that ends when the operating cycle is at its lowest point?

The following data were taken from the records of Menendez Company: Current assets $ 5,000 Property, plant, and equipment 10,000 Current liabilities 3,500 Long-term liabilities 5,000 Stockholders' equity 6,500 What is Menendez Company's working capital?

Which of the following statements is true?

The numerator in the current ratio calculation is

The following data were taken from the records of Action Company and Brown Company: (Data are in thousands) Action Company Brown Company Current assets $15,000 $10,000 Current liabilities $14,500 $5,000 Working capital $500 $5,000 Current ratio 1.03 2.00 Based on these data, a supplier

Working capital is