You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
I'm doing a accounting quiz and i need help.?
- Thread starter Chris
- Start date
Here is the whole quiz, If you can answer any of the questions that would really help me out a lot, i'm having a hard time figuring some of them out, especially the math ones.
The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:
a. Recognition principle.
b. Cost principle.
c. Cash basis of accounting.
d. Matching principle.
e. Time period principle.
2. (Points: 1)
A company's month-end adjusting entry for Insurance Expense is $1,000. If this entry is not made then expenses are understated by $1,000 and net income is overstated by $1,000.
a. TRUE
b. FALSE<br/><br/>
3. (Points: 1)
Adjusting entries:
a. Affect only income statement accounts.
b. Affect only balance sheet accounts.
c. Affect both income statement and balance sheet accounts.
d. Affect only cash flow statement accounts.
e. Affect only equity accounts.
4. (Points: 1)
A contra account is an account linked with another account; it is added to that account to show the proper amount for the item recorded in the associated account.
a. TRUE
b. FALSE<br/><br/>
5. (Points: 1)
An adjusting entry could be made for each of the following except:
a. Prepaid expenses.
b. Depreciation.
c. Owner withdrawals.
d. Unearned revenues.
e. Accrued revenues.
6. (Points: 1)
The accrual basis of accounting:
a. Is generally accepted for external reporting because it is more useful than cash basis for most business decisions.
b. Is flawed because it gives complete information about cash flows.
c. Recognizes revenues when received in cash.
d. Recognizes expenses when paid in cash.
e. Eliminates the need for adjusting entries at the end of each period.
7. (Points: 1)
A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
a. Understate net income by $28,000.
b. Overstate net income by $28,000.
c. Have no effect on net income.
d. Overstate assets by $28,000.
e. Understate assets by $28,000.
8. (Points: 1)
Accrued revenues:
a. At the end of one accounting period often result in cash receipts from customers in the next period.
b. At the end of one accounting period often result in cash payments in the next period.
c. Are also called unearned revenues.
d. Are listed on the balance sheet as liabilities.
e. Are recorded at the end of an accounting period because cash has already been received for revenues earned.
9. (Points: 1)
If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is:
a. Debit Cash and credit Legal Fees Earned.
b. Debit Cash and credit Unearned Legal Fees.
c. Debit Unearned Legal Fees and credit Legal Fees Earned.
d. Debit Legal Fees Earned and credit Unearned Legal Fees.
e. Debit Unearned Legal Fees and credit Accounts Receivable.
10. (Points: 1)
On April 1, 2009, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31, 2009?
a. $1,350.
b. $450.
c. $1,012.50.
d. $337.50.
e. $37.50.
11. (Points: 1)
A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year?
a. $75.
b. $125.
c. $175.
d. $250.
e. $325.
12. (Points: 1)
On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:
a. Debit Prepaid Insurance, $1,800; credit Cash, $1,800.
b. Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440.
c. Debit Prepaid Insurance, $360; credit Insurance Expense, $360.
d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360.
e. Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440.
13. (Points: 1)
Unearned revenue is reported in the financial statements as:
a. A revenue on the balance sheet.
b. A liability on the balance sheet.
c. An unearned revenue on the income statement.
d. An asset on the balance sheet.
The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:
a. Recognition principle.
b. Cost principle.
c. Cash basis of accounting.
d. Matching principle.
e. Time period principle.
2. (Points: 1)
A company's month-end adjusting entry for Insurance Expense is $1,000. If this entry is not made then expenses are understated by $1,000 and net income is overstated by $1,000.
a. TRUE
b. FALSE<br/><br/>
3. (Points: 1)
Adjusting entries:
a. Affect only income statement accounts.
b. Affect only balance sheet accounts.
c. Affect both income statement and balance sheet accounts.
d. Affect only cash flow statement accounts.
e. Affect only equity accounts.
4. (Points: 1)
A contra account is an account linked with another account; it is added to that account to show the proper amount for the item recorded in the associated account.
a. TRUE
b. FALSE<br/><br/>
5. (Points: 1)
An adjusting entry could be made for each of the following except:
a. Prepaid expenses.
b. Depreciation.
c. Owner withdrawals.
d. Unearned revenues.
e. Accrued revenues.
6. (Points: 1)
The accrual basis of accounting:
a. Is generally accepted for external reporting because it is more useful than cash basis for most business decisions.
b. Is flawed because it gives complete information about cash flows.
c. Recognizes revenues when received in cash.
d. Recognizes expenses when paid in cash.
e. Eliminates the need for adjusting entries at the end of each period.
7. (Points: 1)
A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
a. Understate net income by $28,000.
b. Overstate net income by $28,000.
c. Have no effect on net income.
d. Overstate assets by $28,000.
e. Understate assets by $28,000.
8. (Points: 1)
Accrued revenues:
a. At the end of one accounting period often result in cash receipts from customers in the next period.
b. At the end of one accounting period often result in cash payments in the next period.
c. Are also called unearned revenues.
d. Are listed on the balance sheet as liabilities.
e. Are recorded at the end of an accounting period because cash has already been received for revenues earned.
9. (Points: 1)
If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is:
a. Debit Cash and credit Legal Fees Earned.
b. Debit Cash and credit Unearned Legal Fees.
c. Debit Unearned Legal Fees and credit Legal Fees Earned.
d. Debit Legal Fees Earned and credit Unearned Legal Fees.
e. Debit Unearned Legal Fees and credit Accounts Receivable.
10. (Points: 1)
On April 1, 2009, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31, 2009?
a. $1,350.
b. $450.
c. $1,012.50.
d. $337.50.
e. $37.50.
11. (Points: 1)
A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year?
a. $75.
b. $125.
c. $175.
d. $250.
e. $325.
12. (Points: 1)
On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:
a. Debit Prepaid Insurance, $1,800; credit Cash, $1,800.
b. Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440.
c. Debit Prepaid Insurance, $360; credit Insurance Expense, $360.
d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360.
e. Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440.
13. (Points: 1)
Unearned revenue is reported in the financial statements as:
a. A revenue on the balance sheet.
b. A liability on the balance sheet.
c. An unearned revenue on the income statement.
d. An asset on the balance sheet.