Multiple Choice Questions

The net book value of a fixed asset is determined by the original cost...
  • liability; credit
  • less accumulated depreciation
  • been incurred, not paid, and not recorded
  • debit Supplies Expense; Credit Supplies
The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)
  • asset
  • deferral
  • Matching
  • assets
Generally accepted accounting principles require that companies use the ___________________ of accounting?
  • deferral
  • Accrual Basis
  • book value
  • contra asset, expense
What is the purpose of the adjusted trial balance?
  • to verify that the debits and credits balance
  • been incurred, not paid, and not recorded
  • been earned and not recorded as revenue.
  • Preparing the financial statements
The account type and normal balance of Unearned Revenue is...
  • liabilities
  • liability
  • contra asset, expense
  • Liability; Credit
Accrued expenses are ordinarily reported on the balance sheet as...
  • liability
  • liabilities
  • Liability; Credit
  • assets
Prior to the adjusting process, accrued revenue has...
  • been earned and not recorded as revenue.
  • not earned but the cash has been received
  • been incurred, not paid, and not recorded
  • Theater tickets sold for next month's performance
Using accrual accounting, expenses are recorded and reported only...
  • Theater tickets sold for next month's performance
  • been incurred, not paid, and not recorded
  • when they are incurred, whether or not cash is paid.
  • when the services are rendered without regard to when cash is received.
Prepaid expenses are eventually expected to become...
  • to verify that the debits and credits balance
  • been earned and not recorded as revenue.
  • expenses when their future economic value expires.
  • expenses understated and therefore net income overstated
Adjusting entries are...
  • states that the revenues and related expenses should be reported in the same period.
  • debit unearned gym membership; credit gym membership revenues.
  • needed to bring accounts up to date and match revenue and expenses.
  • Debit Depreciation Expense; Credit Accumulated Depreciation
Deferred revenue is revenue that is...
  • not yet been recorded as expenses
  • been earned and not recorded as revenue.
  • to verify that the debits and credits balance
  • not earned but the cash has been received
Accrued revenues would appear on the balance sheet as...
  • Supplies
  • asset
  • liabilities
  • assets
Data for an adjusting entry described as "Accrued wages, $2,020" requires a....A) debit to Wages Expense and a credit to Wages PayableB) Debit to Wages Expense and a credit to Wages ExpenseC) Debit to Accounts Receivable and a credit to wages expenseD) Debit to Dividends and a credit to wages Payable
  • when they are incurred, whether or not cash is paid.
  • debit Supplies Expense; Credit Supplies
  • debit unearned gym membership; credit gym membership revenues.
  • debit to wages payable and a credit to wages expense
Adjusting entries affect at leas one...
  • determines when revenue is credited to a revenue account.
  • income statement account and on balance sheet account.
  • at least one income statement account and one balance sheet account.
  • Debit Depreciation Expense; Credit Accumulated Depreciation
The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed...
  • liabilities
  • still on hand
  • Accrual Basis
  • book value
Using accrual accounting, revenue is recorded and reported only...
  • when the services are rendered without regard to when cash is received.
  • net income or loss will be properly reported on the income statement.
  • revenues and expenses are reported in the period in which cash is received or paid
  • Theater tickets sold for next month's performance
Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies...
  • Accrual Basis
  • Depreciation
  • still on hand
  • liability; credit
The matching concept...
  • needed to bring accounts up to date and match revenue and expenses.
  • Snow removal services that have been provided but have not been billed or paid
  • states that the revenues and related expenses should be reported in the same period.
  • net income or loss will be properly reported on the income statement.
The adjusting entry for gym memberships earned that were previously recorded in the unearned gym membership account is....
  • debit Supplies Expense; Credit Supplies
  • Debit Depreciation Expense; Credit Accumulated Depreciation
  • expenses understated and therefore net income overstated
  • debit unearned gym membership; credit gym membership revenues.
Accumulated Depreciation and Depreciation Expense are classified, respectively, as...
  • less accumulated depreciation
  • contra asset, expense
  • Accrual Basis
  • Liability; Credit
If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)...
  • asset
  • Depreciation
  • deferral
  • Accrual Basis
Adjusting entries always include...
  • debit unearned gym membership; credit gym membership revenues.
  • at least one income statement account and one balance sheet account.
  • expenses understated and therefore net income overstated
  • depreciation expense reflects the decrease in market value each year
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Multiple Choice Questions
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