Acc study guide

The journal entry for an accrued revenue (fees earned) includes a debit to _____ and a credit to ______. 1.) Accounts Receivable, Fees Earned 2.) Fees Earned, Accounts Receivable 3.) Accounts Payable, Fees Earned 4.) Fees Earned, Accounts Payable

1.) Account receivable, Fees earned

Under the _________, revenues and expenses are reported on the income statement in the period in which cash is received or paid. 1.) cash basis of accounting 2.) accrual basis of accounting 3.) historical cost concept 4.) None of these are correct.

1.) Cash basis of accounting

Which of the following accounts does not have a contra asset account? 1.) Land 2.) Buildings 3.) Plant and Machinery 4.) Equipment

1.) Land

A company's accounting records reveal that Supplies had a beginning balance of $1,000. During the accounting period, the company purchased $500 of supplies. A physical count at the end of the accounting period confirmed that $1,400 of supplies were used. What will be the balance of the supplies account on the adjusted trial balance? 1.) $1,500 2.) $100 3.) $1,400 4.) $500

2.) $100

is the amount that has been earned but has not been recorded. 1.) Advance Revenue 2.) Accrued Revenue 3.) Cash Revenue 4.) None of these are correct.

2.) Accrued revenue

In a balance sheet, accrued expense is recorded under the heading _____. 1.) Assets 2.) Liabilities 3.) Owner's Equity 4.) None of these are correct.

2.) Liabilities

Which of the following shows the correct order of events? 1.) Unadjusted trial balance, adjusting entries, financial statements, adjusted trial balance 2.) Unadjusted trial balance, adjusting entries, adjusted trial balance, financial statements 3.) Financial statements, unadjusted trial balance, adjusting entries, adjusted trial balance 4.) Financial statements, adjusted trial balance, unadjusted trial balance, adjusting entries

2.) Unadjusted trial balance, adjusting entries, adjusted trial balance, financial statement

Under the_____, revenues and their related expenses are reported on the income statement in the period in which a service has been performed or a product has been delivered. 1.) cash basis of accounting 2.) accrual basis of accounting 3.) historical cost concept 4.) None of these are correct.

2.) accrual basis accounting

The adjusting entry for accrued revenues will include a debit to a/an _____ and a credit to a/an _____. 1.) revenue account, asset account 2.) asset account, revenue account 3.) revenue account,liability account 4.) liability account, revenue account

2.) asset account, revenue account

Comparing each item on a financial statement with a total amount from the same statement is called _____. 1.) horizontal analysis 2.) vertical analysis 3.) revenue recognition 4.) None of these are correct.

2.) vertical analysis

If depreciation for a period is not adjusted, which of the following would occur? 1.) Assets and expenses would be overstated. 2.) Assets and expenses would be understated. 3.) Net income would be overstated, and expenses would be understated. 4.) Net income would be understated, and owner's equity would be overstated.

3.) Net income would be overstated, and expense would be understated

Prior to recording adjusting entries, the office supplies account had a $360 debit balance. A count of the supplies showed $105 of unused supplies remaining. The required adjusting entry will include a debit to _____ and a credit to _____. 1.) Office Supplies for $105, Office Supplies Expense for $105 2.) Office Supplies Expense for $105, Office Supplies for $105 3.) Office Supplies Expense for $255, Office Supplies for $255 4.) Office Supplies for $255, Office Supplies Expense for $255

3.) Office supplies expense for $255, Office supplies for $255

Which of the following statements is not true about adjusting entries? 1.) Adjusting entries should be dated as of the last day of the accounting period. 2.) An explanation is normally included with each adjusting entry. 3.) After adjusting entries are made in the journal, they are posted to the ledger. 4.) Adjusting entries are typically recorded on the last day of the accounting period.

4.) Adjusting entries are typically recorded on the last day of the accounting period

If the supplies account is not adjusted for the supplies used during a period, which of the following would occur? 1.) Assets and expenses would be overstated. 2.) Assets and expenses would be understated. 3.) Assets would be understated, and expenses would be overstated. 4.) Net income and owner's equity would be overstated.

4.) Net income and owner's equity would be overstated

BizWorld Company pays weekly salaries of $12,500 on Friday for a five-day week ending on that day. The necessary adjusting journal entry at the end of the accounting period assuming that the period ends on Thursday will include a debit to _____ and a credit to _____. 1.) Salaries Payable for $12,500, Salaries Expense for $12,500 2.) Salaries Payable for $10,000, Salaries Expense for $10,000 3.) Salaries Expense for $12,500, Salaries Payable for $12,500 4.) Salaries Expense for $10,000, Salaries Payable for $10,000

4.) Salaries Expense for $10,000 Salaries Payable for $10,000

An adjusting entry will always involve a revenue or an expense account and an asset or a liability account.

True

In a vertical analysis, revenues are most likely to represent 100 percent.

True