Accounting

C

A service vehicle might be depreciated over 5 years because A) income tax provisions require depreciation over the next five years. B) it will be paid for in 5 years. C) it will help generate revenue for the company over the next 5 years. D) it will lose most of its market value in 5 years.

D

Accrued expenses A) decrease assets B) decrease liabilities C) increase assets D) increase liabilities

C

Accrued revenues A) decrease assets B) decrease liabilities C) increase assets D) increase liabilities

C

Accrued salaries are A) salaries that were earned by employees and have been paid. B) salaries that have been paid. C) salaries that have been earned by employees but not paid. D) salaries that have been neither earned by employees nor paid. E) salaries that have been paid but not earned by employees.

C

Accumulated Depreciation-Equipment, is shown as A) an expense on the income statement. B) a liability on the balance sheet. C) a contra account on the balance sheet. D) a deduction from profit on the statement of owner's equity. E) an addition to equipment on the balance sheet.

C

An item that represents services provided by a firm for which it will receive a payment in the future is called A) a prepaid expense. B) an accrued expense. C) an accrued revenue. D) an unearned revenue.

A

An item that represents services received by the firm for which it will pay for in the future is called A) an accrued expense. B) an accrued revenue. C) an unearned revenue. D) a prepaid expense.

C

Depreciation is A) shown on the balance sheet as a liability. B) added to the cost of equipment on the balance sheet. C) an expense that is incurred during an accounting period. D) a decrease in the fair market value of an asset. E) a method of saving cash to replace plant assets.

C

If a ₱2,500 adjustment for depreciation is omitted, which of the following financial statement errors will occur? A) assets will be understated B) expenses will be overstated C) owner's equity will be overstated. D) profit will be understated

B

If an adjusting entry were not made at the end of a period to remove the earned revenue from the Unearned Revenues account, A) assets would be understated B) liabilities would be overstated C) liabilities would be understated D) owner's equity would be overstated

B

The amount of accrued but unpaid expenses at the end of the period is both an expense and A) a deferral B) a liability C) an asset D) an income

B

The cost of doing business is also known as A) a liability B) an expense C) an asset D) an income

A

The going concern assumption is not applied to A) entities about to file for bankruptcy. B) entities that have been in existence for less than a year. C) entities that have sustained losses for the previous two years. D) the partnership form of business.

D

The journal entry to record an accrued expense results in which of the following types of accounts being debited and credited? A) asset and income B) asset and liability C) expense and asset D) expense and liability

B

The matching rule is applied A) to help make the bookkeeper's job easier. B) to help produce a more accurate measurement of an entity's performance. C) because it is required by the Tax Code. D) by expensing certain items immediately and in their entirety.

D

The revenue principle says A) Divide time into annual periods to measure revenue properly. B) Measure revenues and expenses in order to compute for profit. C) Record revenue after you receive cash. D) Record revenue only after you have earned it.

A

Which types of adjusting entries are natural opposites? A) Prepaids and accruals B) Expenses and revenues C) Prepaids and depreciation D) Profit and Loss