11.The matching concept refers to the "matching" of:

Multiple Choice

• expenses and revenues.

• expenses and liabilities.

• assets and equity.

• assets and liabilities.

12. Which of the following correctly states the proper order of the accounting cycle?

Multiple Choice

• Record transactions, adjust accounts, close temporary accounts, prepare statements.

• Adjust accounts, record transactions, close temporary accounts, prepare statements.

• Record transactions, adjust accounts, prepare statements, close temporary accounts.

• Adjust accounts, prepare statements, record transactions, close temporary accounts.

13. The balance in a revenue account at the beginning of an accounting period will always be

Multiple Choice

• zero.

• last period's ending balance.

• higher than the previous periods beginning balance.

• equal to the amount of retained earnings for the previous period.

14. Prior to closing, Syracuse Company's accounting records showed the following balances:

Retained earnings	$	16,800
Service revenue		21,750
Interest revenue		1,800
Salaries expense		12,300
Operating expense		3,450
Interest expense		900
Dividends		2,700

After closing, Syracuse's retained earnings balance would be

Multiple Choice

• $16,800.

• $23,700.

• $21,000.

• $26,400.

15.The following accounts and balances were drawn from the records of Carolina Company on December 31, Year 1:

Cash	$	4,000			Accounts receivable	$	3,400
Dividends	$	2,000			Common stock	$	3,900
Land	$	3,200			Revenue	$	3,200
Accounts payable	$	1,800			Expense	$	2,200

Total assets on Carolinas December 31, Year 1 balance sheet would amount to:

Multiple Choice

• $12,600.

• $13,800.

• $7,200.

• $10,600.

16. The following accounts and balances were drawn from the records of Carolina Company on December 31, Year 1:

Cash	$	4,000			Accounts receivable	$	3,400
Dividends	$	2,000			Common stock	$	3,900
Land	$	3,200			Revenue	$	3,200
Accounts payable	$	1,800			Expense	$	2,200

The amount of net income shown on Carolinas Year 1 income statement would amount to:

Multiple Choice

• $2,200.

• $3,200.

• $1,000.

• $200.

17. Duluth Co. collected a $6,000 cash advance from a customer on November 1, Year 1 for work to be performed over a six-month period beginning on that date. If the year-end adjustment is properly recorded, what will be the effect of the adjusting entry on Duluth's Year 1 financial statements?

Multiple Choice

• Increase assets and decrease liabilities

• Increase assets and increase revenues

• Decrease liabilities and increase revenues

• No effect

18. On December 31, Year 1, Gaskins Co. owed $4,500 in salaries to employees who had worked during December but would be paid in January. If the year-end adjustment is properly recorded on December 31, Year 1, what will be the effect of this accrual on the following items for Gaskins?

	Net Income	Cash Flow from Operating Activities
a.	No effect	No effect
b.	Decrease	No effect
c.	Increase	Decrease
d.	No effect	Decrease

Multiple Choice

• Option A

• Option B

• Option C

• Option D

19. Nelson Company experienced the following transactions during Year 1, its first year in operation.

1. Issued $12,000 of common stock to stockholders.
2. Provided $4,600 of services on account.
3. Paid $3,200 cash for operating expenses.
4. Collected $3,800 of cash from accounts receivable.
5. Paid a $200 cash dividend to stockholders.

The amount of net cash flow from operating activities shown on Nelson Company's Year 1 statement of cash flows is

Multiple Choice

• $400.

• $600.

• $1,400.

• $1,200.