accounting test two

failure to record accrued interest expense would result in which of the following

liabilities being understated

what effect does recognizing rev at the end of the accounting period for rent previously received in advance have on the accounting equation for the insurance company

liabilities decrease SE increase

board directors does not carry out

monitoring activities

which of the following adjustments decreases net income for the period

recognition of depreciation on plant assets

which one of the following adjustments increases net income for the period

recognition of revenue earned but not recorded

credit memo and relationship to comp bank prodecudes does not

record as a credit to the balance per customer record

measurement of the economic effects on an entity involves each of the following EXCEPT

recording the economic effects in the financial statements

not organized in internal control activities

reducing cost of hiring seasonal employees

which one of the following adjustments will increase assets

rent revenue is recorded for amounts owed by a tenant but not yet paid

which one of the following is an example of an accrued liability

rent that has been incurred but have not been paid at the end of the period

a company that sells merchandise to customers should normally recognize

revenue and the related expenses in the period the revenue earned, whether payment is received or not

what does the phrase "revenue is recognized when earned mean"

revenue is recorded in the accounting records and reported on the income statement when goods are sold and delivered to a customer

worksheet order

unadjusted balance, adjustments, adjusted trial balance, income statement, retained earning, balance sheet

when are revenues and expenses recognized in the same accounting period that cash receipts and payments occur

under the cash basis of accounting

under accrual accounting when is revenue recognized

when earned, and expenses when incurred

transposition error

writing 89 as 98

which of the following is not considered to be a cash equivalent

US bills with an original maturity of 6 months

each of the following is considered a cash eq except

a 180 not issued by local gov

which of the following is not included in cash and cash equivalents in a companies balance sheet

a bank certificate of deposit for one year

outstanding check from company p.o.v

a check written by the company but not yet presented to the bank for payment

credit memo bank recon

add to comp balance

interest earned on checking

add to the balance from company records

deposits in transit

add to the bank statement balance

in recon of bank, deposits in transit should be

added to the unadjusted bank statement balance

which one of the following steps in the accounting cycle is completed only at the end of the accounting period

adjustments are recorded

not a requirement of sarbanes oxley act

all publicly traded corp must provide internal controls over financial reports

failure to record the supplies used during the year would result in which of the following

assets and stockholders equity being overstated

what happens to the accounting equation when the adjustment for depreciation expense for the accounting period is record

assets decrease and stock holders equity decreases

what effect does recognizing accrued interest revenue at the end of the accounting period have on the accounting equation

assets increase, SE increase

documents used in control of cash receipts

bank deposit slips

while preparing bank reconciliation which would be subtracted from balance per comp records

bank service charges

check presented for payment and paid by the bank are known as

canceled checks

which of the following items would not be reconciling item on bank reconciliation

canceled checks

which of the following assets is most liquid

cash

the worksheet facilitates preparation of all of the following financial statements except

cash flow statement

account that records differences between amounts of cash deposited and amounts from the cash register is called

cash over and short

adjusting journal entries are made at the end of a period when

cash receipts and payments occur before of after the point in time when revenues and expenses should be recognized under the accrual basis of accounting

which of the following would never be considered a cash eq

common stock issued by corp

which of the following is not a proper method of recognizing assets as expenses in a particular accounting period

customers account balances in account receivable are assigned to expense in the period in which each customer pays

debit memo

deduct from companies balance

cash collected and recorded by a company but not yet selected in a banks statement are known as

deposit checks

while preparing a bank reconciliation what item would be added to the bank statement balance

deposits in transit

sound internal control practice dictates

disbursements should be made by check

expenses should be matched against revenue

in the same period as the revenue that they helped generate

select the incorrect statement about worksheets

income summary account is used to determine income for net period

baed on its income for the month a company estimates that it will owe 23000 of federal income taxes doe the month of may what is the effect of the adjustment on the financial statements

increase income taxes expense

accumulated depreciation

increases with a credit

accrued expenses originate from

incurring expenses without yet having paid cash for them

act of collusion

internal act of two or more employees to accomplish theft of company assets

not recognized in internal control activities

internal review of business transactions by the board of directors

credit memo and relationship to comp bank procedures

it must be recorded as a debit to the balance per the companies records

failture to recrod depreciation expense for the period results in which of the following

net income being overstated stockholders equity being overstated

what is the effect on the accounting equation when a company recognizes rent as earned that had previously been received in advance by customers

net income increases

failure to record the earned portion of unearned revenue would result in which of the following

net income would be understated

which of the following adjusting entries involves the cash account

none of these

credit memo examlpe

notice of interest on a checking account

when should a shipping company recognize revenue from its delivery service

on the date the customers packages are delivered

debiti memo example

outstanding check

not used in cash receipts

outstanding checks

reconciling item on the bank side

outstanding checks

which of the following would not appear on a bank statement for a checking account

outstanding checks

while preparing a bank reconciliation which of the following items would be subtracted from the balance per bank statemetn

outstanding checks

not a internal procedure for cash disbursements

paying with petty cash to expedite the payment process

which of the following is an example of a deferred revenue

payments are received prior to providing the services to customers

balance sheet accounts are also known as which of the following

permanent accounts

strategic risk assessment is concerned with

possible external threats to a companies success in accomplishing objective

segregations of duty is most effective in

preventing collision

only essential element for internal control

procedures for proper authorization of transactions

operating cycle is the elapsed time between the

purchase of goods/services and the ultimate collect of cash from the sale

which of the following prodecures is not part of the preparation of a bank reconciliation for a checking account

reversing all the transactions recorded on the companies records that do not yet appear on the back statement

a company forgot to record four adjustments during 2013 which one of the following omissions of adjustments will understate net income

sales made during the last week of the period are not recorded

which statement presents financial information not based on accrual accounting

statement of cash flows

what happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue

stock holder equity increases, liability decrease

failure to record dividends paid would result in which of the following

stock holders equity being overstated

bounce checks

subtract balance from the company records

service charges

subtract from bank statement balance

the dividend account is known for which of the following

temporary account

income statement accounts are also known as the following

temporary accounts

financial statements are prepared after

the adjusted trial balance is prepared

effective cash management nd control for a companies operating cycle includes all of the following expect

the practice of using surplus cash for the purchase of bonds of other long term investments

assets become expenses when

their economic benefits expire

how are cash equivalents reported of disclosed in the financial statements

they are included with cash as a current asset on the balance sheet

not a requirement of the top managers under sarban

they may deny responsibility for certain financial reporting matters if they are not knowledgable

which of the following concepts is important to accrual accounting

time period, because accrual accounting divide earnings into time periods

failure to record amounts earned for serviced provided to customers but not yet paid results in which of the following

total assets being understated