Accounting Exam 3-4

Interest payable, income tax payable and salary payable are all examples of: A. retained earnings. B. accrued liabilities. C. prepaid expenses.

Accrued Liabilities

Which of the following accounts would have balances on a post closing trial balance? A. Accumulated depreciation B. Interest revenue C. Utilities expense D. Dividends E. Loss on Sale of Equipment

Accumulated Depreciation

Which account is credited in the adjusting entry to allocate the cost of equipment? A. Depreciation Expense-Equipment B. Accumulated Equipment C. Equipment Expense D. Accumulated Depreciation-Equipment

Accumulated Depreciation- Equipment

Adjusting Entries

Adjust Unearned Revenues

An accrued asset could also be called A. a prepaid expense. B. a deferred expense. C. an accrued expense. D. an accrued contra asset. E. an accrued revenue.

An Accrued Revenue

A deferred expense could also be called A. a contra revenue. B. a liability. C. an accrued expense. D. an asset. E. a contra asset.

An Asset

An accrued liability could also be called A. unearned revenue. B. an accrued expense. C. a deferred expense. D. an accrued revenue. E. an accrued contra asset.

An accused expense

Which of the following accounts would not have have a balance on the Post Closing Trial Balance? A. Prepaid expenses B. Unearned revenues C. Dividends D. Retained Earnings E. Accumulated deprecitaion

Dividends

Which one of the following is an example of an deferred expense? A. Wages have been earned by employees, but have not been paid at the end of the period. B. The utility bill for the current month has been paid. C. Cash has been received from customers for work that is to be completed in future periods. D. Equipment that has a useful life of ten years has been purchased. E. Customers made payments on their accounts.

Equipment that has a useful life of ten years has been purchased.

Prepaid expenses will become ________ when their future benefits expire. A. assets B. expenses C. liabilities D. revenues

Expenses

A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual accounting, the doctor recognizes revenue: A. In March B. In July C. In either March or July

In March

Which of the following would be items that would be subtracted from balance per bank in a bank reconciliation: A. Outstanding checks and a deposit of $1,100 that was recorded as $11,000 by the bank. B. Customer's NSF check and outstanding checks. C. Service charge for a lock box and outstanding checks. D. Deposit in transit and a customer's NSF check. E. Deposit in transit, interest earned on an account, and customer NSF check.

Outstanding checks and a deposit of $1,100 that was recorded as $11,000 by the bank.

A deferred revenue could also be called A. a contra asset. B. an accrued revenue. C. a contra revenue. D. a liability. E. an asset.

A Liability

A type of liability resulting from the receipt of cash before the recognition of revenue is A. an accrued asset B. an accrued liability C. a deferred revenue D. a cost allocation E. a deferred expense

A deferred revenue

The entry to close expense account(s) includes a: A. credit to Retained Earnings. B. debit to the expense accounts. C. debit to the revenue accounts. D. credit to the expense accounts.

Credit to the expense accounts

When preparing the financial statements of a company: A. liabilities are not classified on the balance sheet. B. he income statement can be prepared using the multistep or report format. C. current assets are the most liquid assets. D. the balance sheet must be prepared using the account format.

Current Assets are the most liquid assets.

In preparing a bank reconciliation, all of the following would be used to adjust the balance per books, EXCEPT: A. Bank service charges B. NSF customer checks C. Deposits in transit D. Customer note collected E. Interest on bank accounts

Deposits in Transit

Which of the following accounts are considered permanent accounts? A. Common Stock and Salary Expense B. Inventory and Cost of Goods Sold C. Land and Accounts Receivable D. Accounts Payable and Service Revenue

Land and Accounts Receivable

On a classified balance sheet: A. Salaries Payable is a long-term liability. B. Dividends is a current asset. C. Notes Payable due in one year is a current liability. D. Accounts Receivable is a current liability.

Notes Payable due in one year is a current liability.

In preparing a bank reconciliation, all of the following would be used to adjust the balance per books, EXCEPT: A. Outstanding checks. B. NSF customer checks. C. Interest on bank accounts. D. Bank service charges. E. Error made in company's records

Outstanding Checks

The closing entry for the Salaries Expense account includes a debit to: A. Net Income and a credit to Salaries Expense. B. Salaries Expense and a credit to Net Income. C. Salaries Expense and a credit to Retained Earnings. D. Retained Earnings and a credit to Salaries Expense.

Retained Earnings and a credit to Salaries Expense

Accounts that relate to a limited period of time are called

Temporary Account

After the closing entries are prepared and posted: A. the Retained Earnings account will have the correct ending balance. B. the temporary accounts will have debit balances. C. all asset accounts will have a zero balance. D. all liability accounts will have a zero balance.

The Retained Earnings account will have the correct ending balance.

With an accrual of revenue: A. plant assets can create an accrual adjustment. B. the cash is received before the revenue is recorded. C. prepaid expenses can create an accrual adjustment. D. the cash is received after the revenue is recorded.

The cash is received after the revenue is recorded.

________ will be increased when a company receives cash before performing the services. A. Accrued Salaries Payable B. Accumulated Depreciation C. Unearned Service Revenue D. Service Revenue

Unearned Service Revenue

Under accrual accounting, revenue is recorded: A. at the end of every month. B. when the services are performed, regardless of when the cash is received. C. only if the cash is received at the same time the services are performed. D. when the cash is received, regardless of when the services are performed.

When the services are performed, regardless of when the cash is received.

The revenue principle deals with the following: A. when to record revenue and where to record this revenue. B. when to record revenue and the amount of revenue to record. C. where to record revenue and the amount of revenue to record. D. when to record revenue and when to record related expenses.

When to record revenue and the amount of revenue to record.