question

On November 1, Rosebriar Apartments received $3,600 from a tenant for four month's rent. The receipt was credited to Unearned Rent Revenue. What adjusting entry

answer

Unearned rent revenue 1,800 Rent Revenue 1,800

question

Adjusted balance of Kittery National Company Equipment........ 90,000 Accumulated depreciation, equipment .. 12,000 Depreciation expense, equipment... 3,000 The book value of the equipment is:

answer

78,000

question

Sullivan Inc, purchased supplies for 1,500 during 2012. At the year end, Sullivan had $400 of supplies left. The adjusting entry should a. debit Supplies expense 1,100 b. credit supplies 400 c. debit supplies 400 d. debit supplies 1,100

answer

a. debit supplies expense $1,100

question

The accountant for Zero corp. failed to make the adjusting entry to record depreciation for the current year. The effect of this error

answer

assets, net income, and stockholders' equity are all overstated

question

Interest earned on a note receivable at December 31 equals 225. What adjusting entry is required to accrue this interest?

answer

Interest receivable 225 Interest revenue 225

question

If a real estate company fails to accrue commission revenue,

answer

assets are understated, and net income is understated

question

cash basis

answer

adjusting entries are not required for a business

question

The account Unearned Revenue is a

answer

liability

question

Adjusting entries

answer

are needed to measure the period's net income or net loss, do not debit or credit cash, update the accounts

question

An adjusting entry that debits an expense and credits a liability is which type?

answer

accrued expense

question

Current Ratio

answer

total current assets/ total current liabilities

question

debt ratio

answer

total liabilities/ total assets

question

net working capital

answer

total current assets - total current liabilities

question

Total assets (of which 30% are current) 7,000 current liabilities 700 bonds payable (long-term) 1,300 retained earnings 3,800 total liabilities and stockholders equity 7,000 Current ratio at the end of the year?

answer

3.0

question

Total assets (of which 30% are current) 7,000 current liabilities 700 bonds payable (long-term) 1,300 retained earnings 3,800 total liabilities and stockholders equity 7,000 Debt Ratio?

answer

29%

question

On a trial balance, which of the following would indicate that an error has been made? a. service revenue has a debit balance b. accumulated depreciation has a credit balance c. salary expense has a debit balance d. all of the above

answer

a. service revenue has a debit balance

question

The entry to close Management Fee Revenue would be which of the following?

answer

Management Fee Revenue Retained Earnings

question

Which of the following accounts is not closed?

answer

accumulated depreciation

question

Fed Ex earns service revenue of 750,000 how does this transaction affect FedEx ratio

answer

Improves both ratios

question

Suppose Red Hill Corporation borrows 10 million on a 10 year note payable. How does this transaction affect the Red Hills current ratio and debt ratio?

answer

improves the current ratio and hurts the debt ratio

question

Under accrual accounting, revenue is recorded:

answer

when the services are performed, regardless of when the cash is received

question

Under accrual accounting, the impact of a business transaction is recorded:

answer

as it occurs

question

GAAP

answer

requires accrual accounting

question

An expense incurred in 2011 is not paid until 2012. Using the accrual basis of accounting, the expense should appear on:

answer

the 2011 income statement

question

If a real estate company fails to accrue commission revenue

answer

assets are understated and net income us understated

question

why is accrual better

answer

the accrual basis measure of net income is preferable because it accounts for revenues and expenses when they occur, not when they are received or paid in cash.

question

On December 15, 2012 a company received an order from a customer for services to be performed on December 28,2012. Due to a backlog of orders, the company does not perform the services until January 3, 2012. The customer pays for the services on January 6, 2013. The revenue principle requires the revenue to be recorded by the company on:

answer

January 3,2013

question

The event that triggers revenue recognition for the sale of goods is the :

answer

transfer of control of the goods to the purchaser

question

Which of the following is a true statement regarding expenses?

answer

The expense recognition principle is also called the matching principle

question

The expense recognition principle includes two steps:

answer

identify all the expenses incurred during the accounting period and measure the expenses and match them against the revenue earned

question

On November 1, Phillips Tool and Die Company paid six months insurance in advance totaling 9,000. An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Insurance account of

answer

6,000

question

The Unearned Rent account has a 6,000 credit balance in the unadjusted trial balance. There is a 1,000 debit adjustment to unearned rent. The adjusted trial balance will show Unearned Rent as a

answer

5,000 credit balance

question

___ will be increased when a company receives cash before performing the services

answer

Unearned sales revenue

question

A liability that arises from an expense that has not yet been paid is an a. unearned expense b. prepaid expense c. accrued expense d. accrued expense

answer

c. accrued expense

question

Adjusting entries: a. close the expense accounts b. adjust unearned revenue c. close the revenue accounts d. adjust cash

answer

b. adjust unearned revenue

question

close revenue account

answer

service revenue retained earnings

question

close expense account

answer

retained earnings expense(s)

question

close dividends

answer

retained earnings dividends

question

All of the following accounts will be closed except for a. dividends b. cash c. utilities expense d. service revenue

answer

b. cash only close accounts on the income statement since its new every month

question

To close the books of a company, you should:

answer

debit each revenue account, credit each expense account, and credit the dividends account

question

net working capital

answer

total current assets- total current liabilities

question

Which of the following transaction would be recorded under accrual accounting but NOT under cash basis accounting? a. collecting cash from customers b. borrowing money from the bank c. purchasing of inventory on account d. issuing stock of cash e. none of the above

answer

c. purchasing of inventory on account

question

Revenue previously recorded as unearned has now been earned: net income overstated or understated?

answer

Net income understated

question

Revenue has been earned but not yet billed: net income overstated or understated?

answer

net income understated

question

wages have been earned by the employees but have not yet been paid: net income overstated or understated?

answer

net income is overstated

question

Prepaid supplied have now been used: net income overstated or understated?

answer

Net income is overstated

question

Prepaid Insurance has expired: net income overstated or understated?

answer

Net income is overstated

question

Interest earned on a note receivable has not been recorded since it has not yet been received: net income overstated or understated?

answer

Net income is understated

question

Adjusting entries are:

answer

prepaid at the end of the accounting period to update certain accounts

question

A company ___ will be increased when a company receives cash before performing the services a. prepaid rent b. accumulated depreciation c. unearned sales revenue d. accrued sales e. none of the above

answer

c. unearned sales revenue

question

The Houston Robot basketball team receives 5,000 for season tickets on august 1 by December 31, they have earned of the revenue. The adjusting entry to be made on December 31 by the Houston Robots includes a:

answer

debit to Unearned Revenue of 2,000

question

A company started the year with $850 of supplies. During the year, the company purchased an additional $1,300 of supplies. There were $400 of supplies on hand at the end of the year. An adjusting entry prepared at the end of the accounting period includes a: a. debit to supplies for 1750 b. debit to supplies for 1300 c. debit to supplies expense for 1750 d. debut to supplies expense for 1300 e. none of the above

answer

c. debit to supplies expense for 1750

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