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    The revenue recognition principle dictates that revenue should be recognized when it is earned, not when cash is received or taxes are paid. Under accrual-basis accounting, financial statements reflect events when they occur rather than when cash is paid or received. Unearned revenues are recorded as liabilities before they are earned and received.

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    The revenue recognition principle dictates that revenue should be recognized when it is earned, not when cash is received or taxes are paid. Under accrual-basis accounting, financial statements reflect events when they occur rather than when cash is paid or received. Unearned revenues are recorded as liabilities before they are earned and received.

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    The revenue recognition principle dictates that revenue should be recognized when it is earned, not when cash is received or taxes are paid. Under accrual-basis accounting, financial statements reflect events when they occur rather than when cash is paid or received. Unearned revenues are recorded as liabilities before they are earned and received.

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    5K views9 pages

    Acc 100 Quiz Answers

    Uploaded by

    scribdpdfs
    The revenue recognition principle dictates that revenue should be recognized when it is earned, not when cash is received or taxes are paid. Under accrual-basis accounting, financial statements reflect events when they occur rather than when cash is paid or received. Unearned revenues are recorded as liabilities before they are earned and received.

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    The revenue recognition principle dictates that revenue should be recognized in the accounting records

    in the period that income taxes are paid. when it is earned. when cash is received. at the end of the month. Under accrual-basis accounting

    events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. cash must be received before revenue is recognized. net income is calculated by matching cash outflows against cash inflows. Unearned revenues are

    earned and recorded as liabilities before they are received. earned but not yet received or recorded. earned and already received and recorded. received and recorded as liabilities before they are earned. As prepaid expenses expire with the passage of time, the correct adjusting entry will be a

    debit to an expense account and a credit to an expense account. debit to an asset account and a credit to an asset account. debit to an asset account and a credit to an expense account. debit to an expense account and a credit to an asset account.

    The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the

    depreciated difference of the asset. market value of the asset. blue book value of the asset. book value of the asset. Speedy Clean Laundry purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is

    Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $4,500. Debit Laundry Supplies, $4,500; Credit Laundry Supplies Expense, $4,500. Debit Laundry Supplies Expense, $2,000; Credit Laundry Supplies, $2,000. Debit Laundry Supplies, $2,000; Credit Laundry Supplies Expense, $2,000. Henry-K Company purchased a computer system for $3,600 on January 1, 2010. The company expects to use the computer system for 3 years. It has no salvage value. Monthly depreciation expense on the asset is

    $3,600. $0. $100. $1,200.

    Niagara Corporation purchased a one-year insurance policy in January 2010 for $66,000. The insurance policy is in effect from March 2010 through February 2011. If the company neglects to make the proper year-end adjustment for the expired insurance

    Net income and assets will be understated by $55,000. Net income and assets will be overstated by $11,000. Net income and assets will be overstated by $55,000. Net income and assets will be understated by $11,000.

    Betty Carson has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Betty make?

    Debit Unearned Revenue and credit Service Revenue Debit Accounts Receivable and credit Service Revenue Debit Cash and credit Unearned Revenue Debit Accounts Receivable and credit Unearned Revenue Becki Jean Corporation issued a one-year, 9%, $200,000 note on April 30, 2010. Interest expense for the year ended December 31, 2010 was

    $13,500. $18,000. $10,500. $12,000

    The normal balance of any account is the

    side which increases that account. right side. side which decreases that account. left side. Which one of the following represents the expanded basic accounting equation?

    Assets = Revenues + Expenses Liabilities. Assets = Liabilities + Owner's Capital + Owner's Drawings Revenue Expenses. Assets + Owner's Drawings + Expenses = Liabilities + Owner's Capital + Revenues. Assets Liabilities Owner's Drawings = Owner's Capital + Revenues Expenses Which of the following is not true of the terms debit and credit?

    They can be abbreviated as Dr. and Cr. They can be used to describe the balance of an account. They can be interpreted to mean increase and decrease. They can be interpreted to mean left and right. Assets normally show

    debit and credit balances. debit or credit balances. credit balances. debit balances.

    When an owner makes a withdrawal

    the drawing account will be decreased with a debit. the drawing account will be increased with a credit. the capital account will be directly increased with a debit. it doesn't have to be cash, it could be another asset.

    During 2010, its first year of operations, Yaspo's Bakery had revenues of $60,000 and expenses of $33,000. The business had owner drawings of $18,000. What is the amount of owner's equity at December 31, 2010?

    $9,000 credit $0 $18,000 debit $27,000 credit A complete journal entry does not show

    the date of the transaction. the new balance in the accounts affected by the transaction. a brief explanation of the transaction. the accounts and amounts to be debited and credited. Robitaille Company received a cash advance of $500 from a customer. As a result of this event,

    assets increased by $500. owner's equity increased by $500. liabilities decreased by $500. assets increased by $500 and owner's equity increased by $500.

    Posting

    should be performed in account number order. accumulates the effects of journalized transactions in the individual accounts. involves transferring all debits and credits on a journal page to the trial balance. is accomplished by examining ledger accounts and seeing which ones need updating. Customarily, a trial balance is prepared

    at the end of an accounting period. at the end of each day. only at the inception of the business. after each journal entry is posted. Financial accounting provides economic and financial information for all of the following except

    creditors. investors. managers. other external users. The final step in solving an ethical dilemma is to

    identify the alternatives and weigh the impact of each alternative on stakeholders. recognize an ethical situation. identify and analyze the principal elements in the situation. recognize the ethical issues involved.

    Generally accepted accounting principles are

    principles that have been proven correct by academic researchers. income tax regulations of the Internal Revenue Service. standards that indicate how to report economic events. theories that are based on physical laws of the universe. The private sector organization involved in developing accounting principles is the

    Feasible Accounting Standards Body. Financial Accounting Studies Board. Financial Auditors' Standards Body. Financial Accounting Standards Board. Which of the following is not a characteristic of the cost principle?

    Reliability. Subjectivity. Objectivity. Verifiability. If supplies that have been purchased are used in the course of business, then

    an asset will increase. owner's equity will decrease. owner's equity will increase. a liability will increase.

    The accounting equation for Gudgeyes Enterprises is as follows: Assets $120,000 Liabilities $60,000 Owner's Equity $60,000

    If Gudgeyes purchases office equipment on account for $12,000, the accounting equation will change to Assets $120,000 $132,000 $132,000 $132,000 = = = = Liabilities $60,000 $66,000 $72,000 $60,000 + + + + Owner's Equity $60,000 $66,000 $60,000 $72,000

    Net income results when

    Revenues = Expenses. Revenues > Expenses. Assets > Liabilities. Revenues < Expenses.

    Metzger Company compiled the following financial information as of December 31, 2010: Revenues Metzger, Capital (1/1/10) Equipment Expenses Cash Metzger, Drawings Supplies Accounts payable Accounts receivable Metzger's assets on December 31, 2010 are $235,000. $170,000. $80,000. $95,000. Metzger Company compiled the following financial information as of December 31, 2010: Revenues Metzger, Capital (1/1/10) Equipment Expenses Cash Metzger, Drawings Supplies Accounts payable Accounts receivable Metzger's owner's equity on December 31, 2010 is $70,000. $85,000. $60,000. $75,000. $140,000 70,000 40,000 125,000 35,000 10,000 5,000 20,000 15,000 $140,000 70,000 40,000 125,000 35,000 10,000 5,000 20,000 15,000

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