ACG 2021 Ch. 3 Focused Practice Set

Monster music company provided music lessons to customers and earned $10,000, receiving $6000 in cash and earning the rest on account. What is monster music company's revenue under the accrual basis of accounting?

$10,000

On May 1, cut above, Inc. Collected $3000 in advance from customers to mow their lawn's and June. Under cash basis accounting, revenues in May will equals ______.

$3000

On July 1, 2015 firm pre-paid $200,000 for two years rent of an office building beginning on July 1. What amount will be shown for prepaid rent one and one half years later on the December 31, 2016 balance sheet?

$50,000

Pizza Aroma generated $11,000 in revenues and had expenses of $6000. What is pizza Aroma's net income or loss is ______.

$5000

One pizza company delivers pizza to customers and bills it's customer accounts, it should record a debit to ______ and a credit to ______.

Accounts Receivable; Revenue

When a company makes a payment for amounts of food from prior purchases, it will record the debit to _____ and a credit to ______.

Accounts payable; cash

Which ratio change provides good news about a company?

An increase in the net profit margin ratio

After increases and decreases in an account or recorded, the amount remaining in the account is it's ending ______. (enter one word per blank.)

Balance

When pizza company delivers pizza to customers for $100 cash, it should record a $100 debit to _____ and a $100 credit to ______.

Cash; Sales Revenue

On June 1, pizza company paid $100 for advertisements to be run on June 1. Pizza company's entry to record this payment will include a $100 ______. (check all that apply.)

Credit to cash Debit to advertising expense

Expenses decrease net income and retain earnings, so expenses are recorded with a ______, Just like all decreases and stockholders equity. (enter one word per blank)

Debit

Pizza company sold pizzas on the count. The journal entry to record the sales will include a _____. (Check all that apply.)

Debit to Accounts Receivable Credit to sales revenue

Bank 'n' Roll, Inc. pays its employees once a month and records the expense at the time of payment. On May 31, Bank 'n' Roll, Inc. paid its employees $10,000 for work performed in May. The entry to record the payment includes a ______. (Check all that apply.)

Debit to wage expense for $10,000 Credit to cash for $10,000

Net loss indicates the amount by which stockholders equity_____ as a result of any companies unprofitable operations.

Decreased

The trial balance is an internal report used to determine whether total debits _____ total credits.

Equal

Under the accrual basis of accounting, the ______ recognition (matching closing parentheses principle requires that expenses be recognized in the same as the related revenues.

Expense

Assets, on the balance sheet, provide benefits for a company, while ______, on the income statement, are used up benefits. (Enter one word per blank.)

Expenses

The balance she reports for companies assets, liabilities, and stockholders equity at a specific point in time. The ______ statement describes the revenue and expense items that affected night and come over and interval of time. (Enter one word per blank.)

Income

In its first year operation, Jetaway airlines paid salaries expense of $40 million. On December 31, it a crude an additional salaries expense of $2 million. Which should gently report in the income statement and balance sheet for its first year ended December 31?

Income statement: salaries expense $42 million; balance sheet:salaries payable $2 million.

Accounts Payable ______. (Check all that apply.)

Is a liability Represents amounts owed

Which of the following are found on an income statement? (check all that apply.)

Net income Revenues Expenses

At the end of October, Pizza Company sold pumpkin spice pizzas for Halloween parties on account. The customers have 30 days to pay for the pizzas. And which months should pizza company records of revenue under accrual accounting?

October

Investing activities are concerned with acquiring long-term assets; financing Tiffany's provide the money needed to operate the business and to provide the capital for investing activities; and ______ activities are involved with providing goods and services to the customer.

Operating

Under the expanded accounting equation, assets equal liabilities plus contributed capital and ______ earnings. (Enter one word per blank.)

Retained

Which of the following should be classified as stockholders' equity? (Check all that apply.)

Retained earnings Contributed capitals

In accrual accounting, according to the ______ recognition principle, revenues should be recognized when they are earned, not necessarily when cash is received.

Revenue

______ is the quantity times the price earned from selling goods or services to customers. (Enter one word per blank)

Revenues

A net loss is when _____.

Revenues are less than expenses

Net income appears on the ______. (select all that apply.)

Statement of retained earnings Income statement

The journal entry to record the purchase of supplies on account is debit _____.

Supplies and credit Accounts Payable.

Which of the following line items appear on an income statement? (Select all that apply.)

Supplies expense Revenues

_______ Revenue arises when a business receives cash in one period, but does not earn all of it until a later period.

Unearned