SUA & AJE Questions

If one part of a journal entry initially recognizes revenue, the other part of the entry might a. Increase an asset account. b. Increase a liability account. c. Decrease an asset account. d. Decrease a liability account. e. Increase an owner's equity account.

A

The adjusting entry required when amounts previously recorded as unearned revenues are earned includes: A) A debit to a liability. B) A debit to an asset. C) A credit to a liability. D) A credit to an asset.

A

The balance of a control account a. Should equal the sum of the individual account balances contained in the subsidiary ledger. b. Is generally found in a single account housed in the subsidiary ledger. c. Should not be disclosed in the financial statements. d. Is not useful for determining the accuracy of accounting transactions.

A

Which of the following matches relating to financial statements is inaccurate? a. Balance Sheet: States the organization's financial position for a period of time. b. Income Statement: States the organization's earnings for a period of time. c. Statement of Cash Flows: State the organization's cash receipts and cash disbursements for a period of time. d. Statement of Owner's Equity: State the investments by and distributions to the owner for a period of time. e. All of the above matches are accurate.

A (at a specific time)

Accruals occur when cash flows: A) Occur before expense recognition. B) Occur after revenue or expense recognition. C) Are uncertain. D) May be substituted for goods or services.

B

All transactions are first recorded in a. The trial balance b. The general journal c. A T-account d. The general ledger

B

Fink Insurance collected premiums of $18,000,000 from its customers during the current year. The adjusted balance in the Unearned premiums account increased from $6 million to $8 million dollars during the year. What was Fink's revenues from earned insurance premiums for the current year? A) $10,000,000. B) $16,000,000. C) $18,000,000. D) $20,000,000.hi

B

On February 1, 19x2, Katz Co. purchased $700 of supplies. The Supplies Expense Account was debited on that date. At the end of February, Katz desired to prepare financial statements and discovered that only $300 of the supplies was still on hand. What adjusted entry should Katz record at the end of February? a. Supplies 400 Supplies expense 400 b. Supplies 300 Supplies expense 300 c. Supplies expense 400 Supplies 400 d. Supplies expense 300 Supplies 300

B

On September 1, 2003, Time Magazine sold 600 one-year subscriptions for $81 each. The total amount received was credited to Unearned subscriptions revenue. What would be the required adjusting entry at December 31, 2003? A) Unearned subscriptions revenue 48,600 Subscriptions revenue 16,200 Prepaid subscriptions 32,400 B) Unearned subscriptions revenue 16,200 (is too high) Subscriptions revenue 16,200 (earned) C) Unearned subscriptions revenue 16,200 Subscriptions payable 16,200 D) Unearned subscriptions revenue 32,400 Subscriptions revenue 32,400

B

The four basic steps in the accounting process are listed below in random order. In what sequence do these steps normally occur. 1. calculate the account balance 2. a transaction occurs 3. report the account information 4. record the transaction a. 1, 2, 3, 4 b. 2, 4, 1, 3 c. 3, 2, 4, 1 d. 4, 1, 3, 2

B

The purpose of closing entries is to transfer: A) Accounts receivable to retained earnings when an account is fully paid. B) Balances in temporary accounts to a permanent account. Close out revenues and expenses C) Inventory to cost of goods sold when merchandise is sold. D) Assets and liabilities when operations are discontinued.

B

The valuation of assets in the balance sheet is based on a. What it would cost to replace the assets. b. Cost, because cost usually is factual and capable of being verified. c. Current fair market value as established by independent appraisers. d. Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost.

B

Which of the following would not be used as an adjusting entry? A) Prepaid Rent Rent expense B) Cash Unearned revenue C) Interest expense Interest payable D) Bad debt expense Allowance for doubtful accounts

B

In a ledger, debit entries cause a. Increases in owner's equity, decreases in liabilities, and increases in assets. b. Decreases in liabilities, increases in assets, and decreases in owner's equity. c. Increases in assets, decreases in liabilities, and increases in owner's equity. d. Decreases in assets, increases in liabilities, and increases in owner's equity.

B (DIA DLOE)

First Company reported the following data: Salaries payable, 1/1/x2 $ 5,000 Salaries paid during 19x2 40,000 Salaries expense for 19x2 42,000 The balance in the company's salaries payable account on December 31, 19x2,must have been: a. $2,000 b. $3,000 c. $7,000 d. Not enough information to judge

C

If a transaction during the year caused one asset to increase by $40,000, and another asset to decrease by $30,000, which of the following events may have caused these effects? a. Merchandise inventory was purchased and paid for entirely with cash. b. Cash was received in exchange for Land that was sold at a loss. c. Equipment was purchased and paid for partly with Cash and with an Account Payable for the difference. d. Accounts Receivable were collected in Cash. e. Merchandise inventory was sold on account.

C

The term post means to a. Record a transaction in the general journal. b. Prepare a trial balance. c. Record the effect of transactions on the general ledger. d. Cross-reference entries in the general ledger.

C

An example of a contra account is: A) Depreciation expense. B) Accounts receivable. C) Sales revenue. D) Accumulated depreciation.

D

Bland Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2003, and charged the $4,200 premium to Insurance expense. At its December 31, 2003, year-end, Bland Foods would record which of the following adjusting entries? 4200 / 24 = 175 x 5 mo = 875 expense A) Insurance expense 875 Prepaid insurance 875 B) Prepaid insurance 875 Insurance expense 875 C) Insurance expense 875 Prepaid insurance 3,325 Insurance payable 4,200 D) Prepaid insurance 3,325 Insurance expense 3,325

D

In early May 19x4, Needlepoint Magazine sold a total of $600 of advertising to Best Threads for ads to be run in the June, July and August monthly issues. Needlepoint credited Revenue for the amount received. What adjusting entry should Needlepoint record on June 30, 19x4? a. Accounts receivable 400 Unearned revenue 400 b. Unearned revenue 200 Revenue 200 c. Revenue 200 Accounts receivable 200 d. Revenue 400 Unearned revenue 400

D

On December 31, 2002, Typical Fashions had balances in its Accounts receivable and Allowance for uncollectible accounts of $48,400 and $940, respectively. During 2003, Typical Fashions wrote off $820 in Accounts receivable and determined that there should be an Allowance for uncollectible accounts of $1,140 at December 31, 2003. Bad debt expense for 2003 would be: A) $ 320. B) $1,140. C) $ 820. D) $1,020.

D

Southern Enterprises recently reported a gross profit of $50,000. Beginning and ending inventories during the period amounted to $32,000 and $41,000, respectively. If cost of goods sold was 80% of net sales, the company's net purchases must have been: a. $41,000 b. $59,000 c. $191,000 d. $209,000

D

The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, July 3. Neat Clothes is now preparing quarterly financial statements for the three months ended June 30. What is the adjusting entry to record accrued salaries at the end of June? A) Salaries expense 22,400 Prepaid salaries 9,600 Salaries payable 32,000 B) Salaries expense 6,400 Salaries payable 6,400 C) Prepaid salaries 9,600 Salaries payable 9,600 D) Salaries expense 22,400 Salaries payable 22,400

D

Which of the following is not true of journals? a. They are sometimes referred to as "books of original entry." b. They are in chronological order. c. They show the detail of transactions. d. They are more likely than ledgers to be eliminated in a computerized system.

D

The Income Summary account a. Appears on the balance sheet. b. Appears on the income statement. c. Appears on the statement of retained earnings. d. Appears on the statement of cash flows. e. Does not appear on any of the statements.

E