Acct 2

A deferred revenue could also be called A. a contra revenue. B. a liability. C. an accrued revenue. D. an asset. E. a contra asset.

B

A major purpose of preparing closing entries is to A. adjust the asset accounts to their correct current balances. B. update the Retained Earnings account. C. zero out the liability accounts. D. close out the Supplies account.

B

An accrued asset could also be called A. a prepaid expense. B. an accrued revenue. C. a deferred expense. D. an accrued contra asset. E. an accrued expense.

B

If Oxbow Corporation does not record a sale made on account in December until a month later when the customer pays its​ invoice, how will​ Oxbow's December financial statements be​ impacted? A. Assets will be overstated on the balance​ sheet, while revenues will be overstated on the income statement. B. Assets will be understated on the balance​ sheet, while revenues will be understated on the income statement. C. Assets will be overstated on the balance​ sheet, while revenues will be understated on the income statement. D. Assets will be understated on the balance​ sheet, while revenues will be overstated on the income statement.

B

In a bank​ reconciliation, an outstanding check is A.deducted from the book balance. B.deducted from the bank balance. C. added to the book balance. D. added to the bank balance.

B

A journal entry would need to be made for which of the following adjustments on a bank​ reconciliation? A. Bank service charges B. Outstanding checks C. Bank error to be corrected by the bank D. Deposits in transit

A

A type of liability resulting from the receipt of cash before the recognition of revenue is A. a deferred revenue B. a cost allocation C. an accrued liability D. an accrued asset E. a deferred expense

A

All of the following are types of adjusting entries except A. transactions. B. depreciation. C. accruals. D. deferrals.

A

An accrued liability could also be called A. an accrued expense. B. an accrued contra asset. C. an accrued revenue. D. unearned revenue. E. a deferred expense.

A

In a bank​ reconciliation, an EFT cash payment is A.deducted from the book balance. B. added to the bank balance. C. deducted from the bank balance. D. added to the book balance.

A

In preparing a bank reconciliation, all of the following would be used to adjust the balance per books, EXCEPT: A. Outstanding checks. B. Bank service charges. C. NSF customer checks. D. Interest on bank accounts. E. Error made in company's records.

A

The closing entry for the Salaries Expense account includes a debit to: A. Retained Earnings and a credit to Salaries Expense. B. Net Income and a credit to Salaries Expense. C. Salaries Expense and a credit to Retained Earnings. D. Salaries Expense and a credit to Net Income.

A

What is the effect on the financial statements of recording depreciation on​ equipment? A. Net​ income, assets, and​ stockholders' equity are all decreased. B. Net income is not​ affected, but assets and​ stockholders' equity are decreased. C. Assets are​ decreased, but net income and​ stockholders' equity are not affected. D. Net income and assets are​ decreased, but​ stockholders' equity is not affected.

A

Which financial statement reports​ assets, liabilities, and​ equity? A. Balance sheet B. Statement of cash flows C. Statement of retained earnings D. Income statement

A

Which of the following transactions would be recorded if using the accrual basis of accounting but not if using the cash basis of​ accounting? A. Purchasing inventory on account B. Borrowing money C. Paying off loans D. Collecting customer payments

A

With an accrual of revenue: A. the cash is received after the revenue is recorded. B. prepaid expenses can create an accrual adjustment. C. plant assets can create an accrual adjustment. D. the cash is received before the revenue is recorded.

A

In a bank​ reconciliation, interest revenue earned on your bank balance is A. deducted from the bank balance. B. added to the book balance. C. deducted from the book balance. D. added to the bank balance.

B

In preparing a bank reconciliation, all of the following would be used to adjust the balance per books, EXCEPT: A. Customer note collected B. Deposits in transit C. Bank service charges D. Interest on bank accounts E. NSF customer checks

B

When preparing the financial statements of a company: A. Accumulated Equipment B. Accumulated Depreciation-Equipment C. Depreciation Expense-Equipment D. Equipment Expense

B

Which of the following accounts are considered permanent accounts? A. Common Stock and Salary Expense B. Land and Accounts Receivable C. Inventory and Cost of Goods Sold D. Accounts Payable and Service Revenue

B

Which of the following accounts would not be included in the closing​ entries? A. Retained Earnings B. Accumulated Depreciation C. Depreciation Expense D. Service Revenue

B

Which of the following would be items that would be subtracted from balance per bank in a bank reconciliation: A. Service charge for a lock box and outstanding checks. B. Outstanding checks and a deposit of $1,100 that was recorded as $11,000 by the bank. C. Deposit in transit and a customer's NSF check. D. Customer's NSF check and outstanding checks. E. Deposit in transit, interest earned on an account, and customer NSF check.

B

An adjusting entry recorded June salary expense that will be paid in July. Which statement best describes the effect of this adjusting entry on the​ company's accounting​ equation? A. Assets are​ decreased, liabilities are not​ affected, and​ stockholders' equity is decreased. B. Assets are not​ affected, liabilities are​ increased, and​ stockholders' equity is increased. C. Assets are not​ affected, liabilities are​ increased, and​ stockholders' equity is decreased. D. Assets are​ decreased, liabilities are​ increased, and​ stockholders' equity is decreased.

C

How are the assets and liabilities ordered on the balance​ sheet? A Based on liquidity​ (least liquid to most​ liquid) B. Alphabetical order C. Based on liquidity​ (most liquid to least​ liquid) D. Random order

C

Interest payable, income tax payable and salary payable are all examples of: A. retained earnings. B. prepaid expenses. C. accrued liabilities. D. expenses of future periods.

C

Prepaid expenses will become ________ when their future benefits expire. A. liabilities B. assets C. expenses D. revenues

C

Under accrual accounting, revenue is recorded: A. at the end of every month. B. when the cash is received, regardless of when the services are performed. C. when the services are performed, regardless of when the cash is received. D. only if the cash is received at the same time the services are performed.

C

What data flows from the statement of retained earnings to the balance​ sheet? A. Cash B. Net income C.Ending retained earnings D.Assets

C

What type of account is Unearned​ Revenue? A. Asset B. Expense C. Liability D. Revenue

C

Which of the following accounts would have balances on a post closing trial balance? A. Dividends B. Utilities expense C. Accumulated depreciation D. Interest revenue E. Loss on Sale of Equipment

C

A deferred expense could also be called A. a contra asset. B. an accrued expense. C. a contra revenue. D. an asset. E. a liability.

D

According to U.S.​ GAAP, when should revenue be​ recognized? A. When cash is received from the customer B. At the stated date in the contract C. When the goods or services have been priced and offered for sale D. When the service is performed or the goods have been delivered to the customer

D

Adjusting entries... A. close the expense accounts. B. adjust Cash. C. close the revenue accounts. D. adjust Unearned Revenue.

D

After the closing entries are prepared and posted: A. the temporary accounts will have debit balances. B. all liability accounts will have a zero balance. C. all asset accounts will have a zero balance. D. the Retained Earnings account will have the correct ending balance.

D

All of the following accounts are temporary accounts except for A. dividends. B. salaries expense. C. sales revenue. D. prepaid insurance.

D

All of the following items are included on the balance sheet as Cash and Cash Equivalents except A. 4-week U.S. Treasury bills. B. certificates of deposit. C. time deposits. D. all of the above are included.

D

Before paying an invoice for goods received on​ account, the controller or treasurer should ensure that A. the company is paying for the goods it actually received. B. the company has not already paid this invoice. C. the company is paying for the goods it ordered. D. all of the above.

D

If a bank reconciliation included a deposit in transit of​ $790, the entry to record this reconciling item would include a A.credit to Cash for​ $790. B.credit to Prepaid insurance for​ $790. C.debit to Cash for​ $790. D.No entry is required.

D

The entry to close expense account(s) includes a: A. when to record revenue and when to record related expenses. B. when to record revenue and where to record this revenue. C. where to record revenue and the amount of revenue to record. D. when to record revenue and the amount of revenue to record.

D

Using the accrual​ basis, in which month should revenue be​ recorded? A. In the month that the invoice is mailed to the customer B. In the month that goods are ordered by the customer C. In the month that cash is collected from the customer D. In the month that goods are shipped to the customer

D

Which of the following accounts would need to be closed at the end of the​ period? A. Accounts receivable B. Cash C. Unearned revenue D. Supplies expense

D

Which of the following accounts would not have have a balance on the Post Closing Trial Balance? A. Prepaid expenses B. Unearned revenues C. Retained Earnings D. Dividends E. Accumulated deprecitaion

D

Which of the following assets are not included in​ "cash equivalents" in a typical balance​ sheet? A. Time deposits B. U.S. government securities C. Foreign government securities D. Certain very​ low-risk equity securities E. All of the above might be included in​ "cash equivalents."

D

Which one of the following is an example of an deferred expense?' A. The utility bill for the current month has been paid. B. Cash has been received from customers for work that is to be completed in future periods. C. Customers made payments on their accounts. D. Equipment that has a useful life of ten years has been purchased. E. Wages have been earned by employees, but have not been paid at the end of the period.

D

________ will be increased when a company receives cash before performing the services. A. Accrued Salaries Payable B. Accumulated Depreciation C. Service Revenue D. Unearned Service Revenue

D

On a classified balance sheet A. Accounts Receivable is a current liability. B. Salaries Payable is a long-term liability. C. Dividends is a current asset. D. Notes Payable due in one year is a current liability.

D.