ACC 2213 Dustin Holifield - Exam Ch 1-4

An accounting firm collected cash on account. As a result of this​ transaction, total​ assets, liabilities, and equity are all unchanged. True or false?

True

Financial statements are business documents used to communicate information needed to make business decisions. True or false?

True

An adjusting entry that debits Accounts Receivable is an example of​ a(n) _____

accrued revenue

A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is​ credited? A. Cash B. Accounts Receivable C. Service Revenue D. Accounts Payable

B. Accounts Receivable

Regarding a classified balance​ sheet, which of the following statements is​ correct? A. Accounts are classified by their purchase dates. B. Assets are listed in the order of their liquidity. C. Account balances are listed from the highest amount to the lowest amount. D. Assets are listed in alphabetical order

B. Assets are listed in the order of their liquiditY

Which of the following accounts has an ending balance equal to net income immediately before it is​ closed? A. ​Owner, Capital B. Income Summary C. Net Income D. ​Owner, Withdrawals

B. Income Summary

Which of the following accounts will be included in a post−closing trial​ balance? A. Service Revenue B. Interest Payable C. Utilities Expense D. Interest Expense

B. Interest Payable

Where does net income appear on a​ worksheet? A. Net income appears only in the income statement debit column. B. Net income appears in the balance sheet credit column and in the income statement debit column. C. Net income appears in the income statement credit column and in the balance sheet debit column. D. Net income appears only in the balance sheet credit column

B. Net income appears in the balance sheet credit column and in the income statement debit column.

Which of the following entries would be recorded by a company that uses the cash basis method of​ accounting? A. Cash ​1,000 (DR) Accounts Receivable ​1,000 (CR) B. Rent Expense ​1,000 (DR) Cash ​1,000 (CR) C. Prepaid Rent ​1,000 (DR) Cash ​1,000 (CR) D. Salaries Expense ​1,000 (DR) Salaries Payable ​1,000 (CR)

B. Rent Expense ​1,000 (DR) Cash ​1,000 (CR)

Which of the following is a permanent​ account? A. Service Revenue B. Salaries Payable C. Wages Expense D. Utilities Expense

B. Salaries Payable

Which of the following accounts would appear in the income statement credit column of the​ worksheet? A. Depreciation Expense B. Service Revenue C. Prepaid Insurance D. Unearned Revenue

B. Service Revenue

A business prepays four months of office rent. Which of the following accounts is​ debited? A. Rent Expense B. Unearned Rent C. Prepaid Rent D. Cash

C. Prepaid Rent

Which of the following accounts will be closed by crediting the Income Summary​ account? A. Accounts Payable B. Depreciation Expense C. Service Revenue D. Accumulated Depreciation

C. Service Revenue

Which of the following statements is true if the income statement debit column exceeds the income statement credit column of a​ worksheet? A. An error was made. B. The company made a net profit. C. The company incurred a net loss. D. The​ Owner's Capital account increased during the period

C. The company incurred a net loss.

The accountant for Barnes Auto Repair Company failed to make an adjusting entry to record​ $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is an effect of this​ omission? A. The total assets will be understated. B. The net income will be understated. C. The net income will be overstated. D. The total assets will be overstated.

C. The net income will be overstated.

The accountant for Eagle Financial Services Company failed to make an adjusting entry to record​ $3,000 of telephone expenses for the last two months of the year. Which of the following statements is​ true? A. The total liabilities will be overstated. B. The total assets will be understated. C. The total liabilities will be understated. D. The total assets will be overstated

C. The total liabilities will be understated.

A business receives​ $40,000 for services that it will perform over the next four months. Which of the following accounts is​ credited? A. Accounts Payable B. Cash C. Unearned Revenue D. Service Revenue

C. Unearned Revenue

Which of the following accounts would be used under the accrual basis of​ accounting, but not under cash basis​ accounting? A. Cash B. Service Revenue C. Unearned Revenue D. Salaries Expense

C. Unearned Revenue

Under which of the following categories would Accounts Receivable​ appear? A. long−term assets B. current liabilities C. current assets D. long−term liabilities

C. current assets

On the income statement columns of the​ worksheet, the debit column totals $8,000 and the credit column totals $11,600. What is the amount of net income or net​ loss? A. $19,600 net loss B. $3,600 net loss C. $3,600 net income D. $19,600 net income

C. $3,600 net income

Which of the following statements is true of a trial​ balance? A. A trial balance is the first step in the accounting cycle. B. A trial balance is also known as a balance sheet. C. A trial balance is a list of all accounts with their balances. D. A trial balance is also known as the chart of accounts.

C. A trial balance is a list of all accounts with their balances.

A business performs services for a customer for​ $26,000 on account. Which of the following accounts is​ debited? A. Service Revenue B. Accounts Payable C. Accounts Receivable D. Cash

C. Accounts Receivable

Which of the following accounts will have an ending balance after the closing process is​ completed? A. Service Revenue B. ​Owner, Withdrawals C. Accumulated Depreciation D. Rent Expense

C. Accumulated Depreciation

A company receives payment from one of its customers on August 5 for services performed on July 21. Which of the following entries would be recorded if the company uses accrual basis​ accounting? A. Cash ​1,000 (DR) Service Revenue ​1,000 (CR) B. Service Revenue ​1,000 (DR) Cash ​1,000 (CR) C. Cash ​1,000 (DR) Accounts Receivable ​1,000 (CR) D. Accounts Payable ​1,000 (DR) Cash ​1,000 (CR)

C. Cash ​1,000 (DR) Accounts Receivable ​1,000 (CR)

Which of the following is a measure of how quickly an item can be converted to​ cash? A. Accounting cycle B. Return on assets ratio C. Liquidity D. Debt ratio

C. Liquidity

________ represent(s) the right to receive cash in the future from customers for goods sold or for services performed A. Accounts Payable B. Expenses C. Equity D. Accounts Receivable

D. Accounts Receivable

The advance cash receipts of future revenues are called​ _____

deferred revenues

Gulf Waterworks Company provides plumbing services. Transactions during the first year of operations are given below. ​a) Received $8,000 cash received from the​ owner, Jason Robinson. ​b) Paid $3,000 cash for equipment to be used for plumbing repairs. ​c) Borrowed $30,000 from a local bank and deposited the money in the checking account. ​d) Paid $600 rent for the year. ​e) Purchased $800 of office supplies on account. ​f) Completed a plumbing repair project for a local lawyer and received $3,200 cash. Calculate the amount of total equity at the end of the first year after recording the transactions. Assume office supplies of $800 are left at the end of the year.

$10,600

Following is a list of account balances of Tanner Lawn Services as of December​ 31, after the first year of operations. Accounts Receivable: $7,600 Accounts Payable: 6,200 Salaries Expense: 7,800 Repairs Expense: 1,800 Truck: 12,000 Equipment: 13,000 Notes Payable: 27,100 Cash: 14,900 Supplies Expense: 1,000 Service Revenue: 31,000 Gasoline Expense: 8,400 Salaries Payable: 2,200 Calculate the net income.

$12,000

Given the following account balances before closing​ entries, what would be the balance for​ Harris, Capital on the Post−Closing Trial Balance​ (assuming the beginning capital balance is​ zero)? ​Harris, Withdrawals ​$29,000 Service Revenue 302,000 Salaries Expense 69,000 Depreciation Expense−Building and Equipment 6,100 Supplies Expense 14,300 Insurance Expense 16,500 Utilities Expense 20,700

$146,400

The following is the adjusted trial balance for Baker Services. Cash $36,200 (DR) Accounts Receivable 26,000 (DR) Prepaid Insurance 6,500 (DR) Office Supplies 2,800 (DR) Land 49,000 (DR) Building 135,000 (DR) Accumulated Depreciation—Building $17,500 (CR) Equipment 75,000 (DR) Accumulated Depreciation—Equipment 9,500 (CR) Accounts Payable 20,000 (CR) Salaries Payable 5,000 (CR) Unearned Revenue 23,000 (CR) Mortgage Payable 102,000 (CR) ​Baker, Capital, beginning balance 13,000 (CR) ​Baker, Withdrawals 24,000 (DR) Service Revenue 275,000 (CR) Salaries Expense 60,000 (DR) Depreciation Expense—Building and Equipment 5,700 (DR) Supplies Expense 11,000 (DR) Insurance Expense 14,800 (DR) Utilities Expense 19,000 (DR) Total $465,000 (DR) $465,000 (CR) After the closing entries are​ posted, what is the balance in the​ Baker, Capital​ account?

$153,500

Which of the following appears on both the statement of​ owner's equity and the balance​ sheet? A. Ending capital B. Net income C. Total revenues D. Total assets

A. Ending capital

The Accounts Payable account of Waterford Company has the following​ postings: Accounts Payable- Credits: 14,000 9,000 Debits: 29,000 11,000 Calculate the ending balance of the account

$17,000 credit

​Wellness, a healthy living​ magazine, collected $480,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12​ months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account as of December​ 31?

$200,000

Johnson Waterworks Company provides plumbing services. Transactions during the first year of operations are provided below. ​a) Received $14,000 cash from the​ owner, Mitchell Johnson. ​b) Paid $1,100 for equipment to be used for plumbing repairs. ​c) Borrowed $10,000 from a local bank and deposited the money in the checking account. ​d) Paid $600 in rent for the year. ​e) Paid $200 for plumbing supplies to be used on various jobs next year. ​f) Completed a plumbing repair for a law firm and received $3,200. Calculate the amount of total assets at the end of the first year. Assume the plumbing supplies of $200 are left at the end of the year.

$26,600

The following are the current​ month's balances for ABC Financial Services Company before preparing the trial balance. Accounts Payable: $5,000 Revenue: 6,000 Cash: 5,000 Expenses: 18,500 Furniture: 13,000 Accounts Receivable: 14,000 ​Miller, Capital: ? Notes Payable: 5,500 What amount should be shown for​ Miller, Capital on the trial​ balance?

$34,000

Murphy​ Company: prepaid $7,200 on October​ 1, 2024 for a one−year insurance premium. Coverage begins October 1. On January​ 1, 2025​ (after December 31​ adjustments), the Prepaid Insurance account will have a debit balance of​ ________. (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ number.)

$5,400

The following are the current​ month's balances for selected accounts of Sandlin Marketing Company. Accounts Payable $7,000 Revenue 8,000 Cash 5,250 Expenses 1,500 Furniture 11,000 Accounts Receivable 13,000 ​Sandlin, Capital 9,250 Notes Payable 6,500 What is the net income for Sandlin Marketing for the current​ month?

$6,500

Watson Foods​ Company, a sole​ proprietorship, reported the following transactions for​ September: ​a) The business received $25,000 cash from the owner in exchange for capital. ​b) The business purchased office equipment for $11,500 for which $4,000 cash was paid and the balance was put on a note payable. ​c) Paid insurance expense of $1,700 cash. ​d) Paid the September utility bill for $900 cash. ​e) Paid $1,600 cash for September rent. ​f) The business had sales of $12,000 in September. Of these​ sales, 40​% were cash​ sales, and the balance was credit sales. ​g) The business paid $8,000 cash for office furniture. What are the total liabilities at the for​ September?

$7,500

The asset​ account, Office Supplies had a beginning balance of $5,600. During the accounting​ period, office supplies were​ purchased, on​ account, for $5,100. A physical​ count, on the last day of the accounting​ period, shows $3,000 of office supplies on hand. What is the amount of Supplies Expense for the accounting​ period?

$7,700

The following Office Supplies account information is available for Nabors​ Company: Beginning balance $1,200 Office Supplies expensed 8,000 Ending balance 3,000 From the above​ information, calculate the amount of office supplies purchased

$9,800

The following are selected current​ month's balances for Allbright Enterprises. Accounts Payable $6,000 Revenue 12,000 Cash 6,000 Expenses 1,600 Furniture 12,000 Accounts Receivable 14,000 ​Allbright, Capital 7,250 Notes Payable 8,350 Based on this​ information, calculate the total amount of debits for the trial​ balance?

33600

The accounts from the Adjusted Trial Balance are listed in alphabetical order. What is the net balance of long−term assets to appear on the balance​ sheet? Accounts Payable $9,800 (CR) Accounts Receivable $2,100 (DR) Accumulated​ Depreciation, Equipment 1,400 (CR) Cash 14,800 (DR) ​Conner, Capital, August​ 31, 2024 19,100 (CR) ​Conner, Withdrawals 1,300 (DR) Depreciation Expense − Equipment 500 (DR) Equipment 40,800 (DR) Notes Payable ​(long−​term) 18,100 (CR) Office Supplies 1,200 (DR) Prepaid Rent 4,600 (DR) Rent Expense 1,200 (DR) Salaries Expense 9,000 (DR) Service Revenue 27,000 (CR) Supplies Expense 500 (DR) Unearned Revenue ​(short−​term) 1,300 (CR) Utilities Expense 700 (DR) Total ​$76,700 (DR) ​$76,700 (CR)

39,400

Which of the following sequences is the normal sequence of flow of accounting​ data? A. Source document → Journal → Ledger B. Journal → Source document → Ledger C. Ledger → Journal → Source document D. Source document → Ledger → Journal

A

On January​ 1, the Accounts Receivable of Martha Company had a debit balance of $190,000. During​ January, the company provided services for $600,000 on account. The company collected $200,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of​ January?

590,000

Anthony Delivery Service has a weekly payroll of $36,000. December 31 falls on Tuesday and Anthony will pay its employees the following Monday​ (January 6) for the previous full week. Assume that Anthony has a five−day workweek and has an unadjusted balance in Salaries Expense of $890,000 at December 31. What is the December 31 balance of Salaries Expense after adjusting entries are recorded and​ posted?

904,400

Jones Financial Services Company performed accounting services for a client in December. A bill was mailed to the client on December 30. The company received the​ client's check by mail on January 5. Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services​ performed? A. Service Revenue B. Accounts Payable C. Prepaid Expense D. Unearned Revenue

A. Service Revenue

Which of the following is a financial statement that presents a​ business's accounting​ equation? A. Balance Sheet B. Income Statement C. Trial Balance D. Chart of Accounts

A. Balance Sheet

Which of the following is the record holding all the​ accounts, the changes in those​ accounts, and their​ balances? A. Ledger B. Trial balance C. Source document D. Journa

A. Ledger

Which of the following are NOT included in a post−closing trial​ balance? A. Revenues and expenses B. ​Owner, capital and liabilities C. ​Owner, capital and assets D. Assets and liabilities

A. Revenues and expenses

The accountant of Reliable Consulting Company failed to make an adjusting entry to record​ $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is​ true? A. The total liabilities will be overstated. B. The total assets will be overstated. C. The total liabilities will be understated. D. The total assets will be understated

A. The total liabilities will be overstated.

The Interest Expense in the​ worksheet's unadjusted trial balance column is $4,000. Interest Expense in the income statement column is $13,000. Which of the following entries would have caused this​ difference? A. a $9,000 debit to Interest Expense in the​ worksheet's adjustments column B. a $13,000 credit to Interest Payable in the​ worksheet's adjustments column C. a $9,000 credit to Interest Expense in the​ worksheet's adjustments column D. a $13,000 credit to Interest Expense in the​ worksheet's adjustments column

A. a $9,000 debit to Interest Expense in the​ worksheet's adjustments column

The financial statements are prepared from the​ ________. A. adjusted trial balance B. unadjusted trial balance C. statement of accounts D. chart of accounts

A. adjusted trial balance

​Property, plant, and equipment are​ ________. A. also called fixed or plant assets B. easily converted to cash C. either tangible or intangible assets D. presented in order of the category​ name, with Land being presented last

A. also called fixed or plant assets

Martinville Company earned revenues of $17,000 and incurred expenses of $6,500. The​ company's owner withdrew $3,000. What is the balance in the Income Summary account prior to closing net income or loss to the​ Owner, Capital​ account? A. credit balance of $10,500 B. debit balance of $10,500 C. debit balance of $7,500 D. credit balance of $17,000

A. credit balance of $10,500

When preparing a​ worksheet, net income is recorded in the​ ________. A. income statement debit column B. adjusted trial balance debit column C. income statement credit column D. balance sheet debit column

A. income statement debit column

An account that is not closed at the end of the period is called​ a(n) ________. A. permanent account B. temporary account C. revenue account D. expense account

A. permanent account

To match expenses against revenues means to​ ________. A. subtract expenses incurred during one period from revenues earned during that same period B. add expenses incurred during one period to revenues earned during that same period C. add expenses incurred during one period to revenues earned during the previous period D. subtract expenses incurred during one period from revenues earned during the previous period

A. subtract expenses incurred during one period from revenues earned during that same period

Unearned revenue is recorded when​ ________. A. the business has collected​ cash, but not yet earned the revenue B. revenue will be both collected and earned in the future C. the business has​ earned, but not​ collected, cash for the revenue D. revenue has been collected and earned during the same accounting period

A. the business has collected​ cash, but not yet earned the revenue

Which of the following organizations is responsible for the creation and governance of accounting standards in the United​ States? A. Financial Accounting Standards Board B. Securities and Exchange Commission C. Institute of Management Accountants D. American Institute of Certified Public Accountants

A. Financial Accounting Standards Board

Which of the following is a decision made by an internal​ user? A. How much money should the business budget for​ production? B. Should I invest in the​ business? C. Should we lend money to the​ business? D. All of the above are correct

A. How much money should the business budget for production?

Which one of the following account groups normally has a debit​ balance? A. assets and expenses B. liabilities and revenues C. revenues and expenses D. assets and liabilities

A. assets and expenses

A depreciable​ asset's cost minus accumulated depreciation is called​ ________. A. book value B. accrued expense C. residual value D. depreciable value

A. book value

Which one of the following account groups will decrease with a​ debit? A. liabilities and revenues B. revenues and expenses C. assets and expenses D. assets and liabilities

A. liabilities and revenues

Saturn Company paid the rent for the current month in cash. Which of the following accounts will be used to record the transaction? A. Rent Expense B. Prepaid Rent C. Rent Payable D. Rent Revenue

A. rent expense

Maxwell Plumbing Services earned​ $500 by completing a job for Smith Company. The​ $500 earned by Maxwell Plumbing Services is its​ ________. A. revenue B. debt C. gain D. expenses

A. revenue

Which of the following is an example of a source document that provides the evidence and data for accounting​transactions? A. Sales invoice B. Trial balance C. Journal D. Ledger

A. sales invoice

Which of the following journal entries would be recorded if a business purchased office supplies on account in a previous accounting period and now makes a cash payment of​ $750 to the supplier to settle the​ account?

Accounts payable 750(debit) Cash 750 (credit)

Green Lawns Company earned​ $500 for landscaping services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this​ transaction? A. Cash B. Accounts Payable C. Accounts Receivable D. Supplies

Accounts receivable

Accounts Receivable is​ a(n) ________ account and has a normal​ ________ balance.

Asset; debit

Which of the following is the correct accounting​ equation?

Assets = Liabilities + Equity

The adjusted trial balance shows​ ________. A. revenue and expense accounts only B. account balances after adjustments C. account balances before adjustments D. balance sheet accounts only

B. account balances after adjustments

Woods Company earned revenues of $11,000 and incurred expenses of $4,500. The​ company's owner withdrew $2,500. What is the balance in the Income Summary account after closing net income or loss to the​ Owner, Capital​ account? A. credit balance of $6,500 B. balance of​ $0 C. credit balance of $4,500 D. debit balance of $11,000

B. balance of​ $0

A company received​ $5,000 for 100 one−year subscriptions on July 1. The journal entry to record this cash receipt would include a​ ________. The company uses a liability account for revenue received in advance. A. debit to Prepaid Expenses for​ $5,000 B. credit to Unearned Revenue for​ $5,000 C. debit to Note Payable for​ $5,000 D. credit to Accounts Payable for​ $5,000

B. credit to Unearned Revenue for​ $5,000

Salaries​ Payable, Accounts​ Payable, and Unearned Revenue are examples of​ ________. A. fixed assets B. current liabilities C. long−term liabilities D. short−term investments

B. current liabilities

In an accounting​ cycle, which of the following steps takes place only at the end of the accounting​ period? A. journalize transactions that occur B. journalize adjusting entries C. analyze transactions as they occur D. start with the beginning account balances

B. journalize adjusting entries

Which of the following are temporary accounts that are closed at the end of the​ year? A. ​assets, liabilities, and​ owner's equity B. ​revenues, expenses, and owner withdrawals C. ​revenues, expenses, and​ owner's equity D. ​assets, liabilities, and owner withdrawals

B. ​revenues, expenses, and owner withdrawals

Which of the following entries is necessary to close the appropriate depreciation account at the end of the​ year? A. debit Depreciation Expense and credit Income Summary B. debit Income Summary and credit Accumulated Depreciation C. debit Income Summary and credit Depreciation Expense D. debit Accumulated Depreciation and credit Income Summary

C. debit Income Summary and credit Depreciation Expense

If a company is using accrual basis​ accounting, when should it record​ revenue? A. when cash is​ received, 30 days after the completion of the services B. before services are performed C. when services are​ performed, even though cash may be received at a later date D. when cash is​ received, even though services may be performed at a later date

C. when services are​ performed, even though cash may be received at a later date

Revenue is earned when ​ ________. A. the business has received cash from the customer B. the journal entry to record revenue has been prepared C. ​(or as) the business satisfies each performance obligation D. there is a binding agreement to provide goods or services

C. ​(or as) the business satisfies each performance obligation

Precision Camera Services started the year with total assets of $90,000 and total liabilities of $45,000. The revenues and the expenses for the year amounted to $110,000 and $80,000​, respectively. During the​ year, the company did not receive any additional​ capital, but the owner did withdrawal $70,000. What is the amount of equity at the end of the​ year? A. $70,000 B. $110,000 C. $5,000 D. $80,000

C. $5,000 ; A=L+E; Equity = Beg. Own. Cap - Own. W/D + Rev - Expense ; Beg Cap = 90,000-45,000 = 45,000; Equity = 45,000 - 70,000 + 110,000 - 80,000

Jones Supply Services paid​ $350 cash, the amount owed from the previous​ month, to a materials supplier. Which of the following accounts​ decrease? A. Office Supplies B. Supplies Expense C. Accounts Payable D. Accounts Receivable

C. accounts payable

A listing of all accounts in numerical order is called​ a(n) _____

Chart of accounts

To which of the following accounts should the balance in the Income Summary account be​ closed? A. Service Revenue B. Net Income C. ​Owner, Withdrawals D. ​Owner, Capital

D. ​Owner, Capital

Which one of the following account groups normally has a credit​ balance? A. assets and expenses B. assets and liabilities C. equity and assets D. liabilities and revenues

D liabilities and revenues

Which of the following is a contra​ account? A. Book Value B. Unearned Revenue C. Depreciation Expense D. Accumulated Depreciation

D. Accumulated Depreciation

Which of the following​ accounts' balance is carried forward to the next accounting​ period? A. Service Revenue B. Depreciation Expense C. ​Owner, Withdrawal D. Accumulated Depreciation

D. Accumulated Depreciation

Princeton Financial Services Company purchased computers that are to be used in its consulting services. Based on the matching​ principle, what​ account, other than​ Computers, should appear on the balance sheet as of December​ 31? A. Depreciation Expense − Computers B. Service Revenue C. Computers Expense D. Accumulated Depreciation − Computers

D. Accumulated Depreciation − Computers

A business purchased equipment for $130,000 on January 1 of the current year. The equipment will be depreciated over the five years of its estimated useful life using the straight−line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the end of the first​ year? (Assume the residual value of the acquired equipment to be​ zero.) A. Debit $130,000 to​ Equipment, and credit $130,000 to Cash. B. Debit $26,000 to Depreciation​ Expense, and credit $26,000 to Equipment. C. Debit $130,000 to Depreciation Expense—​Equipment, and credit $130,000 to Accumulated Depreciation—Equipment. D. Debit $26,000 to Depreciation Expense—​Equipment, and credit $26,000 to Accumulated Depreciation—Equipment.

D. Debit $26,000 to Depreciation Expense—​Equipment, and credit $26,000 to Accumulated Depreciation—Equipment.

Bayside Technical Services signed a contract on a six−month job for a​ client, starting on March 1. Bayside will collect $36,000 from its customer when the job is finished but the revenue is earned evenly over the six months. On March​ 31, before adjusting entries are​ made, Bayside's Accounts Receivable account had a debit balance of $3,000. After the March 31 monthly adjusting entry has been​ made, what will be the balance in Accounts​ Receivable? A. Debit balance of $6,000 B. Debit balance of $36,000 C. Credit balance of $30,000 D. Debit balance of $9,000

D. Debit balance of $9,000

Revenues and expenses may be transferred to the​ ________ account before their final transfer into the​ Owner's, Capital account. A. Assets B. Net Income C. ​Owner, Withdrawals D. Income Summary

D. Income Summary

The net income of Hendley Company for the year is $25,000. The owner withdrew during the year $30,000. Which of the following statements is​ true? A. The capital account decreases by $25,000. B. The capital account increases by $30,000. C. The capital will remain the same. D. The capital account decreases by $5,000

D. The capital account decreases by $5,000

Which of the following is true of a completed​ worksheet? A. The total debits in the income statement column equal the total debits in the balance sheet column. B. The total debits in the income statement column equal the total credits in the balance sheet column. C. The total debits in the unadjusted trial balance column equal the total debits in the adjusted trial balance column. D. The total of all the debit columns is equal to the total of all the credit columns.

D. The total of all the debit columns is equal to the total of all the credit columns

Which of the following statements is true of the​ worksheet? A. The worksheet is a financial statement issued to the public to communicate the financial results of a company. B. The worksheet is a type of journal. C. The worksheet is a tool that takes the place of financial statement preparation. D. The worksheet is a document used to summarize data to prepare financial statements

D. The worksheet is a document used to summarize data to prepare financial statements

An adjusting entry that credits Salaries Payable is an example of​ a(n) ________. A. deferred revenue B. accrued revenue C. deferred expense D. accrued expense

D. accrued expense

Closing entries are journalized and posted​ ________. A. throughout the accounting period B. after preparing the post−closing trial balance C. before posting the adjusting entries D. after preparing the financial statement

D. after preparing the financial statement

For accounting​ purposes, depreciation refers to the process of​ ________. A. recording the decline in the market value of an asset to its book value B. estimating an​ asset's current market value C. determining the selling price of an asset D. allocating the cost of a plant asset to expense over its useful life

D. allocating the cost of a plant asset to expense over its useful life

Assets that are expected to be converted to​ cash, sold, or used up during the next 12​ months, or within the​ business's normal operating cycle if the cycle is longer than a​ year, are called​ ________ assets. A. long−term B. intangible C. plant D. current

D. current

Under which of the following categories would Accounts Payable​ appear? A. long−term assets B. current assets C. long−term liabilities D. current liabilities

D. current liabilities

On September​ 1, 2024, Real Estate Professionals Company paid $6,000 in advance for an eight−month rental space covering the period of September​ 1, 2024 through April​ 30, 2025. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year−end. The adjusting entry on December​ 31, 2025 would include a​ _______ A. credit of $6,000 to Prepaid Rent B. debit of $6,000 to Cash C. credit of $3,000 to Rent Expense D. debit of $3,000 to Rent Expense

D. debit of $3,000 to Rent Expense

At the time the transaction​ occurred, which of the following would result in an increase in net income under the accrual basis of​ accounting, but would not result in an increase in net income under the cash basis of​ accounting? A. purchase of supplies for cash B. receipt of cash for services that were performed earlier on account C. use of supplies purchased earlier D. performance of services on account

D. performance of services on account

A list of the accounts and their balances at the end of the​ period, after journalizing and posting the closing​ entries, is called​ a(n) ________. A. chart of accounts B. pre−closing balance sheet C. adjusted trial balance D. post−closing trial balance

D. post−closing trial balance

Adams Company recorded the following journal entry on March 2nd. Cash 4,000(debit) Unearned Revenue 4,000(credit) From the journal entry​ above, identify the transaction on March 2nd A. Adams paid $4,000 for services to be received at a later date. B. Adams purchased goods worth $4,000 and signed a one−year note for the same amount. C. Adams sold goods for $4,000 cash. D. Adams received $4,000 for services to be performed at a later period

D. Adams received $4,000 for services to be performed at a later period

The entry to record depreciation includes a debit to the​ ________ account

Depreciation Expense

GAAP refers to guidelines for accounting information in the United States. The acronym GAAP in this statement refers to​ ________

Generally Accepted Accounting Principles

The balance sheet is prepared after the statement of owner's equity. True or false?

True

The income statement is also called the statement of earnings. True or false?

True

Revenue that has been earned but not yet collected in cash is called​ a(n) ______

accrued revenue

The sum of all the depreciation expense recorded to date for a depreciable asset is called​ _____

accumulated depreciation

Transactions are first recorded in a ______. A. ledger B. chart of accounts C. journal D. trial balance

c. journal

The entries that transfer the​ revenue, expense, and​ owner, withdrawals balances to the​ owner's capital account to prepare the​ company's books for the next period are called​ ________ entries

closing

Advance cash payments of future expenses are called​ ______

deferred expenses

The liability created when a business collects cash from its customers before completing a service or delivering a product is called​ ______

deferred revenue

An internal document that helps summarize data for the preparation of financial statements is called a​ _____

worksheet

The equity of Alliance Company is $200,000 and the total liabilities are $90,000. The total assets are​ ________. A. $110,000 B. $290,000 C. $180,000 D. $400,000

$290,000

The following are selected current​ month's balances for Morgan Company. Accounts Payable $10,000 Revenue 8,000 Cash 6,000 Expenses 1,750 Furniture 11,000 Accounts Receivable 13,000 ​Morgan, Capital 7,250 Notes Payable 6,500 Based on this​ information, calculate the total amount of credits for the trial balance

$31,750

Following is an extract of account balances of Aztec Moving Services as of December​ 31, after the first year of operation. Accounts Receivable: $5,000 Accounts Payable: 6,000 Salaries Expense: 5,000 Repairs Expense: 700 Truck: 9,000 Equipment: 11,000 Notes Payable: 8,100 Cash: 7,400 Supplies Expense: 1,400 Service Revenue: 34,000 Gasoline Expense: 3,900 Salaries Payable: 400 What is the amount of total assets at the end of the​ year?

$32,400

​Improvements, a home improvement​ magazine, collected $1,440,000 in subscription revenue on June 30. Each subscriber will receive an issue of the magazine in each of the next 12​ months, beginning with the July issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of​ December? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ number.

$720,000

The following transactions have been journalized and posted to the proper accounts. March is the first month of business operations for the sole proprietorship. Mar. 1 The business received $8,000 cash from the owner in exchange for capital. Mar. 2 Paid the first​ month's rent of $700. Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $6,000. Mar. 4 Purchased office supplies for $650 cash. Mar. 5 Billed a client for $11,000 of design services completed. Mar. 6 Received $9,000 on account for the services previously recorded. What is the ending balance in the Service Revenue​ account?

11,000

The following transactions for the month of March have been journalized and posted to the proper accounts of a sole proprietorship. Mar. 1 The business received $7,000 cash from the owner of the​ business, Morris Tharps. The business gave capital to Morris Tharps. Mar. 2 Paid the first​ month's rent of $600. Mar. 3 Purchased equipment by paying $3,500 cash and executing a note payable for $9,000. Mar. 4 Purchased office supplies for $710 cash. Mar. 5 Billed a client for $8,000 of design services completed. Mar. 6 Received $7,600 on account for the services previously recorded. What is the balance in Cash on March​ 6?

9790

The accountant of Omega Company failed to make an adjusting entry to record​ $6,000 of unearned service revenue that has now been earned. Assume the deferred revenue was initially recorded as a liability. Which of the following statements is​ true? A. The total revenue will be understated. B. The total expenses will be overstated. C. The total expenses will be understated. D. The total revenue will be overstated

A. The total revenue will be understated.

When is a trial balance usually​ prepared? A. before the financial statements are prepared B. after each entry is journalized C. after the financial statements are prepared D. at the beginning of an accounting period

A. before the financial statements are prepared

Journalizing a transaction involves​ ________. A. recording the data only in the journal B. preparing a summary of account balances C. calculating the balance in an account using journal entries D. posting the account balances in the chart of accounts

A. recording the data only in the journal

A posting reference column is used​ ________. A. when the information is transferred from the journal to the ledger B. while preparing the trial balance using the ledger C. while preparing the balance sheet using the trial balance D. when the information is transferred from the ledger to the post−closing trial balance

A. when the information is transferred from the journal to the ledger

The net income of Thomas Company was $75,000 for this year. The beginning balance for capital was $28,000 and the ending balance was $71,000. The company had no additional capital investments during the year. What was the amount of withdrawals during the​ year? A. $32,000 B. $71,000 C. $28,000 D. $146,000

A. $32,000

​Diamond, Inc. had the following transactions during​ June: Performed services for $2,000 on​ account; received cash on​ account, $7,000​; paid $800 for repair​ expense; paid $1,800 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June​ transactions? A. $4,400 increase B. $2,600 decrease C. $4,400 decrease D. $7,000 increase

A. $4400 increase

Marcus has decided to open an auto−detailing business. He will pick up an automobile from the​ client, take it to his​parents' garage, detail​ it, and return it to the client. If he does all of the work himself and takes no legal steps to form a special​ organization, which type of business​ organization, in​ effect, has he​ chosen? A. A sole proprietorship B. A corporation C. A partnership D. A limited−liability company

A. A sole proprietorship

Which of the following financial statements reports that total assets are equal to total liabilities plus total​ equity? A. Balance sheet B. Statement of owner's equity C. Statement of cash flows D. Income statement

A. Balance sheet

Mars Electronic Company receives cash from the​ owner, John Tilden as an investment in the business The two accounts involved in this transaction are​ ________. A. Cash and​ Tilden, Capital B. Tilden, Capital and Accounts Payable C. Accounts Payable and Cash D. Tilden, Capital and Accounts Receivable

A. Cash and​ Tilden, Capital

A journal entry for a $240 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $590 and a credit to Cash for $240. Which of the following statements correctly states the effect of the error on the trial​ balance? A. The sum of the credits will exceed the sum of the debits by $350. B. The sum of the debits will exceed the sum of the credits by $350. C. The sum of the debits will exceed the sum of the credits by $590. D. The sum of the debits will exceed the sum of the credits by $240

B. The sum of the debits will exceed the sum of the credits by $350.

An adjusting entry is completed​ ________. A. at the beginning of the accounting period B. at the end of the accounting period C. when accounts need to be balanced in the ledger D. after all performance obligations are satisfied

B. at the end of the accounting period

Posting a transaction means​ ________. A. finding the account number in the chart of accounts B. transferring data from the journal to the ledger C. preparing a summary of account balances D. calculating the balance in an account

B. transferring data from the journal to the ledger

Athens Delivery Service is hired on October​ 31, 20Y8 to perform​ services, beginning on November​ 1, 20Y8. The delivery services will be performed for six months at a rate of $3,500 per month.​ Athens' fiscal year ends on December 31. What amount of service revenue should be recorded as an adjusting entry on December​ 31, 20Y8? A. $10,500 B. $7,000 C. $3,500 D. ​$0

B. 7,000

Dynamic Production Services started the year with total assets of $100,000 and total liabilities of $55,000. The revenues and the expenses for the year amounted to $130,000 and $50,000​, respectively. During the​ year, the company did not receive any additional​ capital, but the owner did withdrawal $60,000. Calculate​ Dynamic's net income for the year. A. $130,000 B. $80,000 C. $100,000 D. $50,000

B. 80,000

Westwood Supply Services received​ $1,000 cash from a​ customer; the amount was owed to the business from the previous month. Which of the following accounts will decrease as a result of this​ transaction? A. Cash B. Accounts Receivable C. Accounts Payable D. Revenue

B. Accounts receivable

Which of the following users would rely on managerial accounting information for decision−making ​purposes? A. customers B. company managers C. potential investors D. creditors

B. Company managers

Which of the following is the order of steps to journalize an​ entry? A. Identify the accounts and the account type → Record the transaction → Decide whether each account increases or​ decreases, then apply the rules of debits and credits B. Identify the accounts and the account type → Decide whether each account increases or​ decreases, then apply the rules of debits and credits → Record the transaction C. Decide whether each account increases or​ decreases, then apply the rules of debits and credits → Identify the accounts and the account type → Record the transaction D. Record the transaction → Identify the accounts and the account type → Decide whether each account increases or​ decreases, then apply the rules of debits and credits

B. Identify the accounts and the account type → Decide whether each account increases or​ decreases, then apply the rules of debits and credits → Record the transaction

Which of the following financial statements reports cash receipts and cash payments during a period of​ time? A. Balance sheet B. Statement of cash flows C. Statement of​ owner's equity D. Cash receipts budget

B. Statement of Cash flows

The amount of net income is transferred from​ ________ to​ _____ A. the balance​ sheet; the income statement B. the income​ statement; the statement of​ owner's equity C. the income​ statement; the statement of expenditures D. the balance​ sheet; the statement of cash flows

B. The income statement; the statement of owner's equity

Which of the following transactions will affect the balance of​ owner's capital? A. paid accounts payable B. paid rent expense for the month C. collection on account D. purchased land for cash

B. paid rent expense for the month

Which of the following statements is true of accrual basis​ accounting? A. Accrual basis accounting always results in greater net income than cash basis accounting. B. Accrual basis accounting records expenses only when cash has been paid for them. C. Accrual basis accounting is required by Generally Accepted Accounting Principles​ (GAAP). D. Accrual basis accounting records revenue only when cash is received.

C. Accrual basis accounting is required by Generally Accepted Accounting Principles​ (GAAP).

Which of the following is used by both internal and external​ users? A. Trial Balance B. Chart of Accounts C. Balance Sheet D. Costing Reports

C. Balance Sheet

A business purchases equipment by paying $5,500 in cash and issuing a note payable of $16,500. Which of the following​ occurs? A. Cash is debited for $5,500​, Equipment is debited for $16,500​, and Notes Payable is credited for $22,000. B. Cash is debited for $5,500​, Equipment is credited for $16,500​, and Notes Payable is debited for $11,000. C. Cash is credited for $5,500​, Equipment is debited for $22,000​, and Notes Payable is credited for $16,500. D. Cash is credited for $5,500​, Equipment is credited for $22,000​, and Notes Payable is debited for $16,500

C. Cash is credited for $5,500​, Equipment is debited for $22,000​, and Notes Payable is credited for $16,500.

Which of the following statements is true of​ expenses? A. Expenses increase​ equity, so an expense​ account's normal balance is a credit balance. B. Expenses increase​ equity, so an expense​ account's normal balance is a debit balance. C. Expenses decrease​ equity, so an expense​ account's normal balance is a debit balance. D. Expenses decrease​ equity, so an expense​ account's normal balance is a credit balance.

C. Expenses decrease​ equity, so an expense​ account's normal balance is a debit balance.

What is the effect of the adjusting entry for Depreciation​ Expense? A. It increases total assets and increases total expenses. B. It decreases total liabilities and increases total expenses. C. It decreases total assets and increases total expenses. D. It increases total liabilities and increases total expenses

C. It decreases total assets and increases total expenses.

A business renders services to a client and issues a sales invoice. The amount will be collected from the customer at a later time. Which of the following is true at the time the invoice is​ issued? A. Equity will decrease. B. Total liabilities will increase. C. Net income will increase. D. Total assets will decrease.

C. Net income will increase.

Following is a list of account balances of Nabers Delivery Services as of December​ 31, after the first year of operations. Accounts Receivable: $4,000 Accounts Payable: 6,000 Salaries Expense: 5,000 Repairs Expense: 500 Truck: 10,000 Equipment: 10,000 Notes Payable: 8,300 Cash: 11,700 Supplies Expense: 1,300 Service Revenue: 31,000 Gasoline Expense: 3,100 Salaries Payable: 300 What is the amount of total liabilities at the end of the​ year? A. $24,500 B. $21,400 C. $14,600 D. $14,300

C. 14,600

Managerial accounting provides information to​ ________. A. creditors B. taxing authorities C. internal decision makers D. outside investors and lenders

C. internal decision makers

A liability created when a business receives cash from customers in advance of providing services or delivering goods is called​ a(n) ________. A. notes receivable B. service revenue C. unearned revenue D. accrued liability

C. unearned revenue

Which of the following statements is true of​ revenues? A. Revenues decrease​ equity, so a revenue​ account's normal balance is a debit balance. B. Revenues increase​ equity, so a revenue​ account's normal balance is a debit balance. C. Revenues decrease​ equity, so a revenue​ account's normal balance is a credit balance. D. Revenues increase​ equity, so a revenue​ account's normal balance is a credit balance.

D. Revenues increase​ equity, so a revenue​ account's normal balance is a credit balance.

If an adjusting entry includes a debit to Rent​ Expense, it indicates that the payment of rent had been previously recorded as​ a(n) ________. A. accrued revenue B. depreciation expense C. accrued expense D. deferred expense

D. deferred expense

Ten years​ ago, a corporation purchased a building for $160,000. At that​ time, the corporation felt that the building was worth $185,000. The current market value of the building is $480,000. The building has been assessed at $455,000 for property tax purposes. At which amount should the corporation record the building in its accounting​ records? A. $455,000 B. $185,000 C. $480,000 D. $160,000

D. $160,000

Which of the following financial statements lists the​ entity's assets,​ liabilities, and equity as of a specific​ date? A. Income statement B. Statement of​ owner's equity C. Statement of cash flows D. Balance sheet

D. Balance sheet

A business makes a payment of​ $1,400 on a note payable. Which of the following journal entries would be​ recorded? A. Cash is​ debited, and Financing Revenue is credited for​ $1,400. B. Notes Payable is​ credited, and Cash is debited for​ $1,400. C. Cash is​ credited, and Financing Expense is debited for​ $1,400. D. Cash is​ credited, and Notes Payable is debited for​ $1,400.

D. Cash is credited, and Notes payable is debited for $1,400

​ ________ are professional accountants who serve the general​ public, not one particular company. A. Controllers B. Internal auditors C. Financial managers D. Certified public accountants

D. Certified public accountants

Which of the following entries would be made because of the matching​ principle? A. Salaries expense (Debit) Service revenue (credit) B. Cash (Debit) Unearned Revenue (credit) C. Cash (Debit) Salaries expense (credit) D. Salaries Expense (Debit) Salaries Payable (Credit)

D. Debit Expense Credit Payable

The​ owners' claims to the assets of the business are called​ ____ A. Debt B. Return on Assets C. Expenses D. Equity

D. Equity

Which of the following statements best defines financial​ statements? A. Financial statements are the information systems that record monetary and nonmonetary business transactions. B. Financial statements are the verbal statements made to business news organizations by chief financial officers. C. Financial statements are plans and forecasts for future time periods based on information from past financial periods. D. Financial statements are business documents that report on a business in monetary​ terms, providing information to help users make informed business decisions

D. Financial statements are business documents that report on a business in monetary​ terms, providing information to help users make informed business decisions

The employees of Sinclair Services Company worked the last two weeks of December. They received their paychecks on January 2. Which of the following accounts should appear on the balance sheet as of December​ 31? A. Prepaid Expense B. Salaries Expense C. Accounts Payable D. Salaries Payable

D. Salaries Payable

The field of accounting that focuses on providing information for external decision makers is​ ________. A. cost accounting B. managerial accounting C. nonmonetary accounting D. financial accounting

D. financial accounting

The Sarbanes−Oxley Act​ (SOX) ________. A. ensures that financial scandals will no longer occur B. requires independent accountants to take responsibility for the accuracy and completeness of the financial reports C. created the SEC D. requires companies to take responsibility for the accuracy and completeness of their financial reports

D. requires companies to take responsibility for the accuracy and completeness of their financial reports

The net income​ (or net​ loss) must be calculated after the statement of​ owner's equity is prepared. True or false?

False

An accounting entry that is characterized by having multiple debits​ and/or multiple credits is called a​ ________ entry

compound