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the economic life of a business can be divided into artificial time periods

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The periodicity assumption states that:

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expense recognition

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One of the accounting concepts upon which adjustments for prepayments and accruals are based is:

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a fiscal year

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An accounting time period that is one year in length is called:

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they contribute to the production of revenue

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Expenses are recognized when:

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when it is earned

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The revenue recognition principle dictates that revenue should be recognized in the accounting records:

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november 30

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A flower shop makes a large sale for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows GAAP and applies the revenue recognition principle. When is the $1,000 considered to be earned?

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cash must be received before revenue is recognized

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Under the cash basis of accounting:

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events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.

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Under the accrual basis of accounting:

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expenses are recognized, revenues are recorded, accounts have correct balances (all of the above)

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Adjusting entries are made to ensure that:

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affects a balance sheet account and an income statement account

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An adjusting entry:

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incurred but not yet paid or recorded

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Accrued expenses are:

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earned but not yet received or recorded.

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Accrued revenues are:

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debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900

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Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

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$5,400

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Walton Company collected $7,200 in May of 2010 for 4 months of service which would take place from October of 2010 through January of 2011. The revenue reported from this transaction during 2010 would be:

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all temporary accounts

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The closing entry process consists of closing:

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net sales revenues and cost of goods sold

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Gross profit equals the difference between:

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accounting records continuously disclose the amount of inventory

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Under a perpetual inventory system:

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the inventory account

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Under a perpetual inventory system, acquisition of merchandise for resale is debited to

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debit Accounts Payable and credit Inventory

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A company using a perpetual inventory system that returns goods previously purchased on credit would

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$7,840

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Conway Company purchased merchandise inventory with an invoice price of $8,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period?

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debit Accounts Receivable, credit Sales Revenue

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The journal entry to record a credit sale is

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debit Cost of Goods sold and credit Inventory

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Under the perpetual inventory system, in addition to making the entry to record a sale, a company would

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credit to Sales Revenue for $900

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The entry to record a sale of $900 with terms of 2/10, n/30 will include a

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debit to Sales Discounts for $16

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The collection of an $800 account within the 2 percent discount period will result in a

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the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date

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The credit terms offered to a customer by a business firm were 2/10, n/30, which means

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$1,225

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Aber Company sells merchandise on account for $1,500 to Borth Company with credit terms of 2/10, n/30. Borth Company returns $250 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

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sales discounts, sales returns and allowances (both a)

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Which sales accounts normally have a debit balance?

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sales discounts are included in the calculation of gross profit

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With respect to the income statement

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the seller has legal title to the goods until they are delivered

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If goods in transit are shipped FOB destination

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Goods held on consignment from another company

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Which of the following should not be included in the physical inventory of a company?

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merchandise inventory

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Manufacturers usually classify inventory into all the following general categories except:

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the first to be allocated to cost of goods sold

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The LIFO inventory method assumes that the cost of the latest units purchased are

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comparability

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The consistent application of an inventory costing method enhances

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conservatism

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The lower of cost or market basis of valuing inventories is an example of

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