accounting test 1

Under the revenue recognition principle, revenues are recorded a.when earned b.when cash is received c.when earned or when cash is received, depending on which occurs first d.in the same period as related expenses

a.when earned

The first item appearing on the statement of owner's equity is a.the ending balance of owner's equity b.the beginning balance of owner's equity c.net income d.owner withdrawals

b.the beginning balance of owner's equity

Question Content Area The classified balance sheet will show which asset subsections? a.Current Assets and Other Equity b.Current Liabilities and Short-Term Assets c.Current Assets and Property, Plant, and Equipment d.Other Revenues and Property, Plant and Equipment Feedback Area

c.Current Assets and Property, Plant, and Equipment

Question Content Area On the balance sheet, owner's equity is a.added to liabilities and the two are equal to assets b.added to assets and the two are equal to liabilities c.subtracted from liabilities and the net amount is equal to assets d.equal to the total of assets and liabilities

a.added to liabilities and the two are equal to assets

Question Content Area Accumulated Depreciation appears on the a.balance sheet in the Property, Plant, and Equipment section b.income statement as an operating expense c.balance sheet in the Long-Term Liabilities section d.balance sheet in the Current Assets section

a.balance sheet in the Property, Plant, and Equipment section

Question Content Area The income statement should be prepared a.before the statement of owner's equity and balance sheet b.after the statement of owner's equity and before the balance sheet c.after the balance sheet and before the statement of owner's equity d.after the statement of owner's equity and balance sheet

a.before the statement of owner's equity and balance sheet

Adjusting entries are required at the end of the accounting period in order to fulfill the _____ principle. a.matching b.business entity c.objectivity d.going concern Feedback Area

a.matching

During the end-of-period processing, which of the following best describes the logical order of steps? a.preparation of adjustments, adjusted trial balance, financial statements b.preparation of adjustments, adjusted trial balance, posting c.preparation of adjusted trial balance, cross-referencing, journalizing d.preparation of income statement, adjusted trial balance, balance sheet

a.preparation of adjustments, adjusted trial balance, financial statements

The accounting cycle requires three trial balances to be prepared. In what order should they be prepared? a.unadjusted, adjusted, post-closing b.post-closing, unadjusted, adjusted c.post-closing, adjusted, unadjusted d.unadjusted, post-closing, adjusted Feedback Area

a.unadjusted, adjusted, post-closing

Question Content Area What is the first account that should be listed in the post-closing trial balance? a.Owner, Capital b.Cash c.Net Income d.Fees Earned Feedback Area

b.Cash

Question Content Area The statement of owner's equity begins with the beginning balance followed by a.adding investments less withdrawals b.adding investments plus net income less withdrawals c.adding net income plus investments d.adding net income less withdrawals

b.adding investments plus net income less withdrawals

The statement of owner's equity should be prepared a.before the income statement and balance sheet b.after the income statement and before the balance sheet c.after the income statement and balance sheet d.before the income statement and after the balance sheet

b.after the income statement and before the balance sheet

Question Content Area The income statement will present a.revenues less expenses (order is not important) b.revenues less expenses (ordered largest to smallest amounts) with miscellaneous expense listed last c.revenues less expenses (ordered in alphabetical order) d.revenues less expenses (ordered smallest to largest amounts) with miscellaneous expense listed last

b.revenues less expenses (ordered largest to smallest amounts) with miscellaneous expense listed last

Question Content Area Closing entries are dated in the journal as of a.the date they are actually journalized b.the last day of the accounting period c.the first day of the subsequent accounting period d.None of these choices

b.the last day of the accounting period

Prepaid insurance is reported on the balance sheet as a a.current asset b.fixed asset c.current liability d.long-term liability

a.current asset

Question Content Area Which of the following account groups does not include a nominal account? a.Owner's Capital, Owner's Drawing, Fees Earned b.Prepaid Insurance, Equipment, Fees Earned c.Rent Revenue, Fees Earned, Miscellaneous Expense d.Cash, Prepaid Insurance, Wages Payable

d.Cash, Prepaid Insurance, Wages Payable

The classified balance sheet will show which liability subsections? a.Current Liabilities and Other Liabilities b.Other Liabilities and Long-Term Liabilities c.Present Liabilities and Tomorrow's Liabilities d.Current Liabilities and Long-Term Liabilities

d.Current Liabilities and Long-Term Liabilities

Which of the following accounts would be closed by posting a debit to the account? a.Prepaid Insurance b.Josh Morton, Drawing c.Miscellaneous Expense d.Fees Earned

d.Fees Earned

Question Content Area What is the major difference between the unadjusted trial balance and the adjusted trial balance? a.Unlike the adjusted trial balance, the unadjusted trial balance will continue with the end-of-period processing even if it is not in balance. b.The adjusted trial balance will show the net income (loss) as an additional account. c.The adjusted trial balance reflects the updated balances in the accounts after the adjusting entries. d.The adjusted trial balance will be used to record the adjustments for the period.

c.The adjusted trial balance reflects the updated balances in the accounts after the adjusting entries.

The balance sheet should be prepared a.before the income statement and after the statement of owner's equity b.before the income statement and the statement of owner's equity c.after the income statement and the statement of owner's equity d.after the income statement and before the statement of owner's equity

c.after the income statement and the statement of owner's equity

Question Content Area When preparing the statement of owner's equity, the beginning capital balance can always be found a.on the statement of cash flows b.in the Income Statement columns of the work sheet c.in the general ledger d.in the Balance Sheet columns of the work sheet

c.in the general ledger

Unearned fees appear on the a.balance sheet in the Owner's Equity section b.income statement as revenue c.balance sheet in the Current Assets section d.balance sheet as a current liability

d.balance sheet as a current liability