Chapter 3 Study Quiz Questions (EXAM 2)

The revenue recognition concept...

The matching concept...

Using accrual accounting, revenue is recorded and reported only...

Using accrual accounting, expenses are recorded and reported only...

The accounting concept upon which deferrals and accruals are based is... A) Matching B) Cost C) Price-level Adjustment D) Conservation

Prior to the adjusting process, accrued expenses have... A) not yet been incurred, paid, or recorded B) been incurred, not paid, but have been recorded C) been incurred, not paid, and not recorded D) been paid but have not yet been incurred

Prior to the adjusting process, accrued revenue has...

Deferred expenses have... A) not yet been recorded as expenses but have been paid B) been recorded as expenses and paid C) been incurred and paid D) not yet been recorded as expenses

Deferred revenue is revenue that is...

Adjusting entries are...

Adjusting entries affect at leas one...

Which of the following is NOT a characteristic of the accrual basis of accounting? A) revenues and expenses are reported in the period in which cash is received or paid B) revenues are reported on the income statement in the period in which they are earned C) accrual basis of accounting supports the matching concept D) expenses are reported in the same period as the revenues to which they relate

Generally accepted accounting principles require that companies use the ___________________ of accounting?

By matching revenues and expenses in the same period in which they are incurred....

Adjusting entries always include...

Prepaid expenses are eventually expected to become...

Which of the following is considered to be unearned revenue? A) Theater tickets sold last month for yesterday's performance B) Theater tickets sold yesterday on credit for yesterday's performance C) Theater tickets that were not sold for the current performance D) Theater tickets sold for next month's performance

Which of the following is an example of accrued revenue? A) Snow removal services that have been paid for three months in advance B) Snow removal services that have been provided but have not been billed or paid C) An agreement that has been signed for snow removal services for the next three months D) Snow removal services that has been provided and paid on the same day

If there is a balance in the prepaid rent account after adjusting entries are made, it represents a(n)...

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

The entry to adjust for the cost of supplies used during the accounting period is...

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed...

The adjusting entry to record the depreciation of a building for the fiscal period is...

As time passes, fixed assets other than land lose their capacity to provide useful service. To account for this decrease in usefulness, the cost of fixed asset is systematically allocated to expense through a process called...

Accumulated Depreciation and Depreciation Expense are classified, respectively, as...

The type of account and normal balance of Unearned Consulting Fees is...

Data for an adjusting entry described as "Accrued wages, $2,020" requires a.... A) debit to Wages Expense and a credit to Wages Payable B) Debit to Wages Expense and a credit to Wages Expense C) Debit to Accounts Receivable and a credit to wages expense D) Debit to Dividends and a credit to wages Payable

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

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

Which of the following is an example of prepaid expense? A) Supplies B) Accounts Receivable C) Unearned Subscriptions D) Unearned Fees

Accrued revenues would appear on the balance sheet as...

Accrued expenses are ordinarily reported on the balance sheet as...

Fees payable would appear on the balance sheet as a(n)...

The adjusting entry for gym memberships earned that were previously recorded in the unearned gym membership account is....

Which of the following is NOT true regarding depreciation? A) Depreciation allocates the cost of a fixed asset over its estimated life. B) depreciation expense reflects the decrease in market value each year C) Depreciation is an allocation not a valuation method D) Depreciation expense does not measure changes in market value.

The account type and normal balance of Unearned Revenue is...

The net book value of a fixed asset is determined by the original cost...

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having....

Which of the accounting steps in the accounting process below would be completed last? A) Preparing the adjusted trial balance B) Posting C) Preparing the financial statements D) Journalizing

What is the purpose of the adjusted trial balance?

All of the following statements regarding vertical analysis are true EXCEPT... A) Vertical analysis may be prepared for several periods to analyze charges in relationships over time B) In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets. C) In a vertical analysis of an income statement, each item is stated as a process of total expenses. D) Major differences between a company's vertical analysis and industry averages should be investigated.