ACT 1

As of December 31, 2014, Stoneland Company has assets of $3,500 and stockholders equity of $2,000. What are the liabilities for Stoneland Company as of December 31,2014? A. $1,500 B. $1,000 C. $2,500 D. $2,000

$1,500

Before posting a payment of $5,000, the accounts payable of senator corporation had a normal balance of $16,000. The balance after posting this transaction was: A. $21,000 B. $5,000 C. $11,000 D. can not be determined

$11,000

As of December 31, 2013, Morley Company has liabilities of $5,000 and stockholders' equity of $7,000. It received revenues of $23,000 during the year ended December 31, 2013. What are the assets for Morley Company as of December 31, 2013? Select one: a. $25,000. b. $35,000. c. $12,000. d. $2,000.

$12,000.

The trial balance of Clooney Corporation had accounts with the following normal balances: Cash $5,000, Service Revenue $85,000, Salaries and wages payable $40,000, Rent expense $10,000, Common stock $42,000, Dividends $15,000, and equipment $61,000. In preparing a trial balance, the total in the debit column is: A. $131,000 B. $216,000 C. $91,000 D. $116,000

$131,000

On May 1, 2013, Maricel Advertising Company received $3,000 from Kathy Siska for advertising services to be completed by April 30, 2014. At December 31, 2013, $2,000 of the fees have been earned. The adjusting entry on December 31, 2013 by Maricel will include a: Select one: a. $2,000 debit to Unearned Fees. b. $1,000 debit to Fees Earned. c. $2,000 credit to Unearned Fees. d. $1,000 credit to Unearned Fees.

$2,000 debit to Unearned Fees.

Total revenues were $105,000, total expenses, except for wage expense were $50,000, and net income was $35,000. What was the amount of wage expense? A) $15,000 B) $20,000 C) $55,000 D) $70,000 E) Cannot be determined from information provided

$20,000

If at the end of the accounting period the liabilities total $18,000, and equity totals $32,000, then what must be the total of the assets? A) $14,000 B) $18,000 C) $32,000 D) $50,000 E) None of the above

$50,000

Assets total $100,000 and liabilities total $20,000. What is the equity of the business? A) $80 B) $800 C) $8,000 D) $80,000 E) None of the above

$80,000

Golden Pork Company receives $400 from a customer on October 15 in payment of a balance due for services billed on October 1. The entry by Golden Pork Company will include a credit of $400 to: Select one: a. Accounts Receivable. b. Notes Receivable. c. Unearned Service Revenue. d. Service Revenue.

Accounts Receivable

The account that will appear on the post-closing trial balance is: Select one: a. Depreciation Expense. b. Accumulated Depreciation c. Fees Earned d. Dividends.

Accumulated Depreciation

Phillip Atwood received $5,000 after he completed excavation work for a local home builder. Recording the transaction requires which of the following? A) An asset to be debited, a liability to be credited B) A liability to be debited, an asset to be credited C) Withdrawal to be debited, an asset to be credited D) An asset to be debited, revenue to be credited E) An option other than these provided

An asset to be debited, revenue to be credited

The investment of cash in the business will result in which of the following? A) An increase in cash and a decrease in equity B) An increase in cash and an increase in equity C) A decrease in cash and an decrease in liabilities D) An increase in fees earned and an increase in equity E) A increase in cash and a increase in liabilities

An increase in cash and an increase in equity

Which of the following is the correct sequence of steps in the recording process? Select one: a. Analyzing, journalizing, posting. b. Analyzing, posting, journalizing. c. Posting, jounalizing, analyzing. d. Journalizing, analyzing, posting.

Analyzing, journalizing, posting.

An account titled Prepaid Rent would be classified as which of the following? A) Asset account B) Liability account C) Revenue account D) Expense account E) None of the above

Asset account

The total assets and total liabilities of a firm are reported on which of the following? A) Income statement B) Balance sheet C) Statement of cash flows D) Statement of owner's equity E) None of the above

Balance sheet

The recording of financial transactions and events manually or electronically is called which of the following? A) Bookkeeping B) Budgeting C) Auditing D) Reporting E) A and B

Bookkeeping

Vicki Wagner Dance Studio bills a client for dancing lessons earned during the past week. The journal entry will include a credit to: Select one: a. Accounts Receivable. b. Dance Fees Earned. c. Unearned Dance Fees. d. Retained Earnings.

Dance Fees Earned.

Keith Farfalle withdrew $5,000 from his pet store, KM's Pets. Recording the withdrawal will result in which of the following changes to the components of the accounting equation? A) Increase in an asset and increase a liability B) Decrease in an asset and decrease a liability C) Increase in an asset and increase in equity D) Decrease in an asset and decrease in equity E) Increase in one asset and decrease in another asset

Decrease in an asset and decrease in equity

If during the accounting period the assets decreased by $10,000, and equity increased by $2,000, then how did liabilities change? A) Increased by $12,000 B) Increased by $8,000 C) Decreased by $12,000 D) Decreased by $8,000 E) Decreased by $6,000

Decreased by $12,000

Kevin Walsh, Inc. pays a $300 cash dividend. The entry for this transaction will include a debit of $300 to: Select one: a. Dividends Income. b. Salaries Expense. c. Dividends. d. Dividends Expense.

Dividends.

Which of the following is NOT classified under the current asset section of the balance sheet? Select one: a. Prepaid Expenses. b. Equipment. c. Supplies. d. Cash.

Equipment.

If during the accounting period the assets increased by $14,000, and equity increased by $4,000, then how did liabilities change? A) Increased by $10,000 B) Increased by $4,000 C) Decreased by $4,000 D) Decreased by $10,000 E) Decreased by $18,000

Increased by $10,000

Which of the following organizations is responsible for setting accounting rules and regulations? A) H&R Block B) SEC C) IRS D) AICPA E) FASB

FASB

Withdrawals increase equity. A) True B) False

False

Which of the following is NOT part of the accounting process? Select one: a. Financial decision making b. Recording c. Communicating d. Identifying

Financial decision making

When cash is received from a customer in payment for an account receivable, how are the elements of the accounting equation affected? A) Decrease assets (cash and increase assets (accounts receivable) B) Increase assets (cash) and decrease assets (accounts receivable) C) Increase assets and increase liabilities D) Increase assets and increase equity E) None of the above

Increase assets (cash) and decrease assets (accounts receivable)

Services rendered for which cash has not yet been received will have what effect on the components of the accounting equation? A) Increase in accounts receivable and a decrease in equity B) Increase in accounts receivable and an increase in equity C) Decrease in accounts receivable and an increase in equity D) Increase in fees earned and a decrease in equity E) Decrease in accounts receivable and a decrease in equity

Increase in accounts receivable and an increase in equity

Purchasing equipment on account will have what effect on the components of the accounting equation? A) Increase in equipment and a decrease in equity B) Increase in equipment and an increase in equity C) Increase in equipment and an increase in liabilities D) Increase in equipment and a decrease in liabilities E) None of the above

Increase in equipment and an increase in liabilities

Which of the following statements is true? A) Journalizing precedes posting B) Revenue accounts are increased by debit entries C) An account shows increase and decreases, but does not show the balance D) Debit entries are entries involving the right-hand side on an account E) Journalizing errors should be erased and a correct entry made

Journalizing precedes posting

An accountant has the responsibility to coordinate the annual budget processes of the business corporation she works for. In which of the following areas of accounting is she most likely to be employed? A) Managerial accounting. B) Public accounting. C) Financial accounting. D) Not-for-Profit accounting. E) Auditing.

Managerial accounting.

Beginning capital was $10,000. Withdrawals were $24,000. The owner made additional investments during year of $60,000. The ending capital balance was $90,000. What was the net income or net loss for the period? A) Net income, $56,000 B) Net loss, $44,000 C) Net income, $44,000 D) Net income, $30,000 E) None of the above

Net income, $44,000

Which form of ownership burdens owners with the greatest risk of loss of their personal assets? A) Limited partnership (LP) B) Limited liability partnership (LLP) C) Corporation D) Sole proprietorship E) None of the above

Sole proprietorship

The trial balance shows supplies $1,350 and supplies expense $0. If $600 of supplies are on hand at the end of the period, the adjusting entry is: A. Supplies 600 Supplies expense 600 B. Supplies 750 supplies expense 750 C. Supplies expense 750 supplies 750 D. Supplies expense 600 Supplies 600

Supplies expense 750 supplies 750

Internal users of accounting data include: Select one: a. investors b. company officers c. economic planners d. customers

company officers

One of the following statements about current assets is correct. The correct statement is: Select one: a. The time period for current assets is within one year after the balance sheet date or the company's operating cycle, whichever is longer. b. The time period for current assets is within one year after the balance sheet date or the company's operating cycle, whichever is shorter. c. Current assets are listed in the balance sheet in the order of magnitude. d. The operating cycle is the average time to collect accounts receivable in the process of earning revenue.

The time period for current assets is within one year after the balance sheet date or the company's operating cycle, whichever is longer.

Which of the following is not an equity account? A) Owner's Capital B) Owner's Withdrawals C) Revenue D) Unearned Revenue E) Expenses

Unearned Revenue

Which of the following would NOT appear on the DeFlippo Company's balance sheet? Select one: a. Accounts receivable. b. Wages payable. c. Utilities expense. d. Retained earnings.

Utilities expense.

Which of the following is not a step in the accounting process? A. Identification B. Verification C. Recording D. Communication

Verification

A trail balance will not balance if: A. a correct journal entry is posted twice B. the purchase of supplies on account is debited to supplies and credited to cash C. a $100 cash dividend is debited to dividends for $1,000 and credited to cash for $100 D. a $450 payment on account is debited to accounts payable for $45 and credited to cash for $45

a $100 cash dividend is debited to dividends for $1,000 and credited to cash for $100

Accumulated Depreciation is: A. a contra asset account B. an expense account C. a stockholders equity account D. a liability account

a contra asset account

The purchase of supplies on account should result in: A. a debit to supplies expense and a credit to cash B. a debit to supplies expense and a credit to supplies C. a debit to supplies and a credit to accounts payable D. a debit to supplies and a credit to accounts receivable

a debit to supplies and a credit to accounts payable

Poindexter Co. pays a $500 dividend in cash. The effect on the specific items in the basic accounting equation is: Select one: a. a decrease in Retained Earnings and a decrease in Cash. b. an increase in Salary Expense and a decrease in Cash. c. an increase in Retained Earnings and a decrease in Cash. d. an increase in Accounts Receivable and a decrease in Retained Earnings.

a decrease in Retained Earnings and a decrease in Cash.

A trial balance will NOT balance if: Select one: a. a journal entry is only partially posted. b. a wrong amount is used in journalizing. c. a journal entry is posted twice. d. incorrect account titles are used in journalizing.

a journal entry is only partially posted.

Financial statements are prepared directly from the: Select one: a. adjusted trial balance. b. trial balance. c. general journal. d. ledger.

adjusted trial balance.

Adjusting entries are made to ensure that: A. expenses are recognized in the period in which they are incurred B. revenues are recorded in the period in which services are provided C. balance sheet and income statement accounts have correct balances at the end of the accounting period D. all the above

all the above

Which of the following statements about an account is true? A. in its simplest form, and account consist of two parts B. an account is an individual accounting record of increase and decreases in specific asset, liability, and stockholders equity items C. there are separate accounts for specific assets and liabilities but only one account for stockholders equity items D. the left side of the account is the credit or decrease side

an account is an individual accounting record of increase and decreases in specific asset, liability, and stockholders equity items

Which of the following events is not recorded in the accounting process? A. equipment is purchased on account B. an employee is terminated C. a cash investment is made into the business D. the company pays a cash dividend

an employee is terminated

Which of the following statements is false? A. a statement of cash flows summarizes information about the cash inflows (receipts) and outflows (payments) for a specific period of time B. a balance sheet reports the assets, liabilities, and stockholder equity at a specific date C. an income statement presents the revenues, expenses, changes in stockholders equity and resulting net income or net loss for a specific period of time D. a retained earnings statement summarizes the changes in retained earnings for a specific period of time

an income statement presents the revenues, expenses, changes in stockholders equity and resulting net income or net loss for a specific period of time

The Relias Uptown Grill receives a bill of $400 from the Erml Advertising Agency. The owner, John Relias, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is: Select one: a. an increase in Accounts Payable and a decrease in Retained Earnings. b. a decrease in Cash and an increase in Retained Earnings. c. a decrease in Cash and an increase in Accounts Payable. d. a decrease in Accounts Payable and an increase in Retained Earnings.

an increase in Accounts Payable and a decrease in Retained Earnings.

The expanded accounting equation is: A. assets + liabilities = common stock + retained earnings + dividends + revenues + expenses B. assets = liabilities + common stock + retained earnings + dividends + revenues - expenses C. assets= liabilities - common stock - retained earnings - dividends- revenues- expenses D. assets = liabilities + common stock + retained earnings - dividends + revenues - expenses

assets = liabilities + common stock + retained earnings - dividends + revenues - expenses

The cost principle states that: A. assets should be initially recorded at cost and adjusted when the fair value changes B. activities of an entity are to be kept separate an distinct from its owner C. assets should be recorded at their cost D. only transaction data capable of being expressed in terms of money be included in the accounting records

assets should be recorded at their cost

Accounts that normally have debit balances are: A. assets, expenses, and revenues B. assets, expenses, and common stock C. assets, liabilities, and dividends D. assets, dividends, and expenses

assets, dividends, and expenses

The order of the accounts in the ledger is: A. assets, revenues, expenses, liabilities, common stock, dividends B. assets, liabilities, common stock, dividends, revenues, expenses C. common stock, assets, revenues, expenses, liabilities, dividends D. revenues, assets, expenses, liabilities, common stock, dividends

assets, liabilities, common stock, dividends, revenues, expenses

Services provided by a public accountant include: A. auditing, taxation, and management consulting B. auditing, budgeting, and management consulting C. auditing, budgeting, and cost accounting D. internal auditing, budgeting, and management consulting

auditing, taxation, and management consulting

The financial statement that reports assets, liabilities, and stockholders equity is the: A. income statement B. retained earnings statement C. balance sheet D. statement of cashflows

balance sheet

The post-closing trial balance contains only: Select one: a. balance sheet accounts. b. balance sheet and income statement accounts. c. income statement, balance sheet, and stockholders' equity statement accounts. d. income statement accounts.

balance sheet accounts.

On the last day of the period, Jim Otto Company buys a $900 machine on credit. This transaction will affect the: A. income statement only B. balance sheet only C. income statement and retained earnings statement only D. income statement, retained earnings statement, and balance sheet

balance sheet only

Morreale Beaver Company buys a $12,000 van on credit. This transaction will affect the: Select one: a. income statement only. b. balance sheet only. c. income statement, retained earnings statement, and balance sheet. d. income statement and retained earnings statement only.

balance sheet only.

On October 3, Mike Baker Co. received a cash payment for services previously billed to a client. The company paid its telephone bill, and it also bought equipment on credit. For the three transactions, at least one of the entries will include a: Select one: a. credit to Retained Earnings. b. credit to Accounts Payable. c. credit to Notes Payable. d. debit to Accounts Receivable.

credit to Accounts Payable

Szykowny Co. buys a machine from Scott Company paying half in cash and putting the balance on account. The journal entry for this transaction by Szykowny will include a: Select one: a. credit to Notes Payable and a credit to Cash. b. debit to Machinery and a credit to Notes Payable. c. credit to Accounts Payable and a credit to Cash. d. debit to Supplies and a credit to Cash.

credit to Accounts Payable and a credit to Cash.

On June 30, Wian Marketing Services is preparing its financial statements. $600 of fees were earned in June for which payment had NOT been collected prior to June 30. The adjusting entry at June 30 is: Select one: a. debit Fees Earned $600; credit Unearned Fees $600. b. debit Accounts Receivable $600; credit Fees Earned $600. c. debit Fees Earned $600; credit Accounts Receivable $600. d. debit Unearned Fees $600; credit Fees Earned $600.

debit Accounts Receivable $600; credit Fees Earned $600.

Income Summary has a credit balance of $12,000 in J. Spencer, Co. after closing revenues and expenses. The entry to close Income Summary is: Select one: a. credit Income Summary $12000; debit Dividends $12,000. b. credit Income Summary $12,000; debit Retained Earnings $12,000. c. debit Income Summary $12,000; credit Retained Earnings $12,000. d. debit Income Summary $12,000; credit Dividends $12,000.

debit Income Summary $12,000; credit Retained Earnings $12,000.

Demaet Cruise Lines purchased a five-year insurance policy for its ships on April 1, 2013 for $100,000. Assuming that April 1 is the effective date of the policy, the adjusting entry on December 31, 2013 is: Select one: a. debit Insurance Expense $15,000; credit Prepaid Insurance $15,000. b. debit Insurance Expense $20,000; credit Prepaid Insurance $20,000. c. debit Insurance Expense $5,000; credit Prepaid Insurance $5,000. d. debit Prepaid Insurance $15,000; credit Insurance Expense $15,000.

debit Insurance Expense $15,000; credit Prepaid Insurance $15,000.

Gardner Company purchased a truck from Kutner Co. by issuing a 6-month 10% note payable for $30,000 on November 1. On December 31, the accrued expense adjusting entry is: Select one: a. no entry is required. b. debit Interest Expense $500; credit Interest Payable $500. c. debit Interest Expense $6,000; credit Interest Payable $6,000 d. debit Interest Expense $3,000; credit Interest Payable $3,000.

debit Interest Expense $500; credit Interest Payable $500.

Cathy Cline, an employee of the Wheeler Company, will NOT receive her paycheck until April 2. Based on services performed from March 15 to March 30, her salary was $800. The adjusting entry for Wheeler Company on March 31 is: Select one: a. no entry is required. b. debit Salaries Payable $800; credit Cash $800. c. debit Salaries Expense $800; credit Cash $800. d. debit Salaries Expense $800; credit Salaries Payable $800.

debit Salaries Expense $800; credit Salaries Payable $800.

The beginning balance of Supplies for Lu Inc. was $900. During the year, additional supplies were purchased for $450. At the end of the year a count indicates $700 of supplies on hand. The adjusting entry at December 31 is: Select one: a. debit Supplies $650; credit Supplies Expense $650. b. debit Supplies Expense $250; credit Supplies $250. c. debit Supplies $450; credit Supplies Expense $450. d. debit Supplies Expense $650; credit Supplies $650.

debit Supplies Expense $650; credit Supplies $650.

McClory Company purchases equipment for $900 and supplies for $300 from Rudnicky Co. for $1,200 cash. The entry for this transaction will include a: Select one: a. debit to Equipment $900 and a debit to Supplies $300 for McClory. b. debit to Equipment $900 and a debit to Supplies Expense $300 for Rudnicky. c. credit to Cash for Rudnicky. d. credit to Accounts Payable for McClory.

debit to Equipment $900 and a debit to Supplies $300 for McClory

Payments of an account payable affects the components of the accounting equation in the following way: A. decrease stockholders equity and decrease liabilities B. increase assets and decrease liabilities C. decrease assets and increase stockholders equity D. decrease assets and decrease liabilities

decrease assets and decrease liabilities

Adjustment for prepaid expense: A. decrease assets and increase revenues B. decrease expenses and increase assets C. decrease assets and increase expenses D. decrease revenues and increase assets

decrease assets and increase expenses

Credits: Select one: a. decrease assets and increase liabilities b. increase both assets and liabilities. c. increase assets and decrease liabilities. d. decrease both assets and liabilities.

decrease assets and increase liabilities

An account which is increased by a debit is a: Select one: a. dividends account. b. liability account. c. retained earnings account. d. revenue account.

dividends account.

The principle or assumption dictating that efforts (expenses) be matched with accomplishments (revenues)is the: A. expense recognition principle B. cost assumption C. time period principle D. revenue recognition principle

expense recognition principle

A net loss will result during a time period when: Select one: a. assets exceed stockholders' equity. b. revenues exceed expenses. c. assets exceed liabilities. d. expenses exceed revenues.

expenses exceed revenues.

The matching principle (expense recognition) dictates that: Select one: a. the fiscal year should match the calendar year. b. each debit be matched with an equal credit. c. revenue should be recognized in the accounting period in which it is earned. d. expenses should be matched with revenues.

expenses should be matched with revenues.

Which of the following statements is INCORRECT? Property, plant, and equipment: Select one: a. is reported in the balance sheet at cost less accumulated depreciation. b. includes long-lived, non-physical resources such as patents and copyrights. c. includes tangible resources that are held for use and not for sale. d. includes land, buildings, equipment, and machinery.

includes long-lived, non-physical resources such as patents and copyrights.

Debits: A. increase both assets and liabilities B. decrease both assets and liabilities C. increase assets and decrease liabilities D. decrease assets and increase liabilities

increase assets and decrease liabilities

Performing services on account will have the following effects on the components of the basic accounting equation: A. increase assets and decrease stockholders equity B. increase assets and increase stockholders equity C. increase assets and increase liabilities D. increase liabilities and increase stockholders equity

increase assets and increase stockholders equity

During 2014, Gibson Company's assets decreased $50,000 and its liabilities decreased $90,000. Its stockholders' equity therefore: A. increased $40,000 B. decreased $14,000 C. decreased $40,000 D. increased $140,000

increased $40,000

A ledger: A. contains only asset and liability accounts B. should show accounts in alphabetical order C. is a collection of the entire group of accounts maintained by a company D. is a book of original entry

is a collection of the entire group of accounts maintained by a company

A trail balance: A. is a list of accounts with their balances at a given time B. proves the mathematical accuracy of journalized transactions C. will not balance if a correct journal entry is posted twice D. proves that all transactions have been recorded

is a list of accounts with their balances at a given time

A revenue account: A. is increased by debits B. is decreased by credits C. have a normal balance of a debit D. is increased by credits

is increased by credits

Which of the following statements about a journal is false? A. it is not a book of original entry B. it provides a chronological order of transactions C. it helps to locate errors because the debit and credit amounts for each entry can be readily compared D. it discloses in one place the complete effect of a transaction

it is not a book of original entry

The account Unearned Revenues is a(n): Select one: a. asset account. b. contra revenue account. c. liability account. d. revenue account.

liability account.

Current liabilities: Select one: a. are listed in the balance sheet in order of their expected maturity. b. should not include long-term debt that is expected to be paid within the next year. c. must reasonably be expected to be paid within one year or the operating cycle, whichever is shorter. d. must reasonably be expected to be paid from existing current assets or through the creation of other current liabilities.

must reasonably be expected to be paid from existing current assets or through the creation of other current liabilities.

Balance sheet accounts are considered to be: Select one: a. nominal accounts. b. temporary stockholders' equity accounts. c. permanent accounts d. retained earnings accounts.

permanent accounts

A company might carry on many activities that do NOT represent business transactions such as: Select one: a. placing an order for merchandise with a supplier. b. using office supplies. c. borrowing money from the bank. d. paying wages.

placing an order for merchandise with a supplier.

Which of the following is not part of the recording process? A. analyzing transactions B. preparing a trail balance C. entering transactions in a journal D. posting transactions

preparing a trail balance

The three types of business entities are: A. proprietorships, small business, and partnership B. proprietorships, partnership, and corporations C. proprietorships partnership, and large business D. financial, manufacturing, and service companies

proprietorships, partnership, and corporations

Each of the following is a major type (or category) of adjusting entries except: A. prepaid expense B. accrued revenues C. accrued expenses D. recognized revenues

recognized revenues

Which of the following statements about users of accounting information is incorrect? A. management is an internal user B. taxing authorities are external users C. present creditors are external users D. regular authorities are internal users

regular authorities are internal users

The monetary unit assumption: Select one: a. is unimportant in applying the cost principle. b. is only used for financial statements of banks. c. provides that the unit of measure fluctuates over time. d. requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity.

requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity.

Long-term investments are: Select one: a. reported in the balance after property, plant, and equipment. b. resources that are not expected to be realized in cash within one year or the operating cycle, whichever is longer. c. resources that may include rights and privileges granted by governmental authority. d. resources that are intended for use or consumption.

resources that are not expected to be realized in cash within one year or the operating cycle, whichever is longer.

Which of the following statements about the accrual basis of accounting is false? A. events that change a company's financial are recorded in the periods in which the events occur B. revenue is recognized in the period in which services are performed C. this basis is in accord with generally accepted accounting principles D. revenue is recorded only when cash is received, and expense is recorded only when cash is paid

revenue is recorded only when cash is received, and expense is recorded only when cash is paid

The revenue recognition principle recognizes that: Select one: a. the fiscal year should correspond with the calendar year. b. the economic life of a business can be divided into artificial time periods. c. expenses should be matched with revenues. d. revenue should be recognized in the accounting period in which services are performed.

revenue should be recognized in the accounting period in which services are performed.

Net income will result during a time period when: A. assets exceed liabilities B. assets exceed revenues C. expenses exceeds revenues D. revenues exceed expenses

revenues exceed expenses

The dividends account is a(n): Select one: a. expense account. b. temporary account. c. revenue account. d. permanent account.

temporary account.

Which of the following statements about basic assumptions is correct? A. basic assumptions are the same as accounting principles B. the economic entity assumption states that there should be a particular unit of accountability C. the monetary unit assumption enables accounting to measure employee moral D. partnerships are not economic entities

the economic entity assumption states that there should be a particular unit of accountability

The time period assumption states that: A. revenues should be recognized in the accounting period in which a performance obligation is satisfied B. expenses should be matched with revenues C. the economic life of a business can be divided into artificial time periods D. the fiscal year should correspond with the calendar year

the economic life of a business can be divided into artificial time periods

Posting: A. normally occurs before journalizing B. transfers ledger transactions to the journal C. is an optional step in the recording process D. transfer journal entries to ledger accounts

transfer journal entries to ledger accounts