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Quiz von Claudia Voin, aktualisiert more than 1 year ago
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Erstellt von Claudia Voin
vor etwa 9 Jahre
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Frage 1
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The time period assumption states that
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a transaction can only affect one period of time
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estimates should not be made if a transaction affects more than one time period
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adjustments to the enterprise's accounts can only be made in the time period when the business terminates operations
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the economic life of a business can be divided into artificial time period periods
Frage 2
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In general, the shorter the time period, the difficulty of making the proper adjustments to accounts
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is increased
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is decreased
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is unaffected
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depends on if there is a profit or a loss
Frage 3
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The fiscal year of a business is usually determined by
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the Canada Customs and Revenue Agency
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the Tax Act
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the business
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provincial securities and exchange commissions
Frage 4
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Moishe's Tune-Up Shop follows the revenue recognition principle. Moishe services a car on July 31. The customer picks up the vehicle August 1st and mails the payment on August 5th. Moishe receives the cheque in the mail on August 6th. When should Moishe show the revenue was earned?
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July 31
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August 1
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August 5
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August 6
Frage 5
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A company spends $10 million for an office building. Over what period should the cost be written off?
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when the $10 million is expended in cash
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all in the first year
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over the useful life of the building
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after $10 million in revenue is earned
Frage 6
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The matching principle states that expenses should be matched with revenues. Another way of stating the principle is to say that
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assets should be matched with liabilities
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efforts should be matched with accomplishments
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owner withdrawals should be matched with owner contribuions
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cash payments should match cash receipts
Frage 7
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A small company may be able to justify using the cash basis of accounting if they have
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sales under $1 000 000
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no accountants on staff
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few receivables and payables
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all sales and purchases accounts
Frage 8
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Adjusting entries are
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not necessary if the accounting system is operating properly
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usually required before financial statements are prepared
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made whenever management desires to change an account balance
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made to balance sheet accounts only
Frage 9
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Which one of the following is not a justification for adjusting entries?
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adjusting entries are necessary to ensure that revenue recognition principles are followed
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adjusting entries are necessary to ensure that the matching principle is followed
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adjusting entries are necessary to enable financial statements to be in conformity with IFRS
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adjusting entries are necessary to bring the ledger accounts in line with budget
Frage 10
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An adjusting entry
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affects two balance sheet accounts
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affects two income statement accounts
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affects a balance sheet account and an income statement account
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is always a compound entry
Frage 11
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If a resource has been consumed but a bill has not been received at the end of the accounting period, then
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an expense should be recorded when the bill is received
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an expense should be recorded when the cash is paid out
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an adjusting entry should be made recognizing the expense
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it is optional whether to record the expense before the bill is received
Frage 12
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An asset-expense relationship exists with
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liability accounts
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revenue accounts
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prepaid expense adjusting entries
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accrued expense adjusting entries
Frage 13
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A law firm received $2 000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Legal Fees. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause
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expenses to be overstated
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net income to be overstated
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liabilities to be understated
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revenues to be understated
Frage 14
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Accrued revenues are
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received and recorded as liabilities before they are earned
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earned and recorded as liabilities before they are received
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earned but not yet received or recorded
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earned and already received and recorded
Frage 15
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Prepaid expenses are
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paid and recorded in an asset account before they are used or consumed
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paid and recorded in an asset account after they are used or consumed
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incurred but not yet paid or recorded
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incurred and already paid and recorded
Frage 16
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Accrued expenses are
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paid and recorded in an asset account before they are used or consumed
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paid and recorded in an asset account after they are used or consumed
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incurred but not yet paid or recorded
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incurred and already paid and recorded
Frage 17
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Unearned revenues are
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received and recorded as liabilities before they are earned
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earned and recorded as liabilities before they are received
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earned but not yet received or recorded
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earned and already received and recorded
Frage 18
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A liability-revenue relationship exists with
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prepaid expense adjusting entries
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accrued expense adjusting entries
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unearned revenue adjusting entries
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accrued revenue adjusting entries
Frage 19
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Which of the following reflect the balances of prepayment accounts prior to adjustment?
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Balance sheet accounts are understated and income statement accounts are understated
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Balance sheet accounts are overstated and income statement accounts are overstated
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Balance sheet accounts are understated and income statement accounts are overstated
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Balance sheet accounts are overstated and income statement accounts are understated
Frage 20
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Amortization of a capital asset is the process of
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valuing a capital asset at its fair market value
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increasing the cost of a capital asset over the periods the asset benefits
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allocating the cost of a capital asset to an expense over the periods the asset benefits
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writing down a capital asset to its real value each account period
Frage 21
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An accumulated amortization account
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is a contra-liability
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increased on the debit side
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is offset against total assets on the balance sheet
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has a normal credit balance
Frage 22
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The difference between the cost of a capital asset and its related accumulated amortization is referred to as the
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market value
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blue book value
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net book value
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amortized difference
Frage 23
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If a business pays rent in advance and debit a prepaid rent account, the company receiving the rent payment will credit
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cash
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prepaid rent
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unearned rent revenue
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accrued rent revenue
Frage 24
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Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause
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net income to be understated
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an overstatement of assets and an overstatement of liabilities
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an understatement of expenses and an understatement of liabilities
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an overstatement of expenses and an overstatement of liabilities
Frage 25
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Failure to prepare a an adjusting entry at the end of the period to record an accrued revenue would cause
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net income to be overstated
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an understatement of assets and an understatement of revenues
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an understatement of revenues and an understatement of liabilities
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an understatement of revenues and an overstatement of liabilities
Frage 26
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Closing entries are made
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in order to terminate the business as an operating entity
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so that all assets, liabilities, and owner's capital accounts will have zero balances when the next accounting period starts
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in order to transfer net income/loss and owner's drawings to the capital account
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so that financial statements can be prepared
Frage 27
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The owner's capital account
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is a permanent account
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appears on the cash flow statement
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appears on the income statement
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is a temporary account
Frage 28
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The purpose of a post-closing trial balance is to
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prove that no mistakes were made
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prove the equality of the balance sheet account balances that are carried forward into the next accounting period
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prove the equality of the income statement account balances that are carried forward into the next accounting period
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list all the balance sheet accounts in alpha order for easy reference
Frage 29
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After closing entries are posted, the balance in the owner's capital account in the ledger is equal to
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the beginning owner's capital reported on the statement of OE
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the amount of the owner's capital reported on the balance sheet
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zero
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the net income for the period
Frage 30
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Reversing entries are required for
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prepayment adjustments
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accrual adjustments
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estimate adjustments
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prepayment and accrual adjustments
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