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Test IMULTIPLE CHOICE 3 0 POINTS 1 . It is one of the adjustments of income already earned but not yet received.a . Prepaymentc. Accrualb.
Test IMULTIPLE CHOICE POINTS It is one of the adjustments of income already earned but not yet received.a Prepaymentc. Accrualb. Precollectiond. Amortization An adjustment on expense paid but not yet consumed is called:a Prepaymentc. Accrualb. Precollectiond. Amortization The cost of wear and tear of an asset is recorded as:a Repair and maintenance expenseb. Depreciation expensec. Consumptiond. Scrap value The income statement contains aan:a Prepaid expensec. Unused suppliesb. Unearned rentd. Expired insurance In the balance sheet, this account will appear:a Allowance for bad debtsc. Interest incomeb. Supplies expensed. Expired insurance A Precollection is a mixed account that is partly income and partly:a Assetc. Expenseb. Liabilityd. Revenue Accrued revenue to be recorded will:a Decrease asset.c increase assetb. Decrease liabilitiesd. increase expense Accrued expenses to be recorded will:a Increase assetsc. Decrease assetsb. Increase liabilitiesd. Decrease liabilities It is one of the adjustments of income already earned but not yet received.a Prepaymentc. Accrualb. Precollectiond. Amortization An adjustment on expense paid but not yet consumed is called:aPrepaymentc. Accrualb.Precollectiond. Amortization If the prepayment is initially recorded as asset, part of the yearend adjustment will be a:a Debit to expensec. Credit to liabilityb. Debit to assetd. Credit to income If the precollection is initially recorded as income, the yearend adjustment will require a:a Debit to incomec. Credit to assetb. Debit to liabilityd. Credit to expense If an unpaid expense pertaining to consumption for the period is to be part of the yearend adjustment, this will require a:a Debit to assetc. Credit to expenseb. Debit to incomed. Credit to liability If an allowance for doubtful accounts is to increase, this will require aa Credit to expenseb. Credit to contra asset valuation accountc. Credit to accounts receivabled. Credit to liability account To accrue a salary incurred but yet to be paid will require aa Debit to expensec. Credit to incomeb. Debit to assetd. Credit to expense When the year adjustment on a precollection requires a debit to liability account, then the initial recording was under the liability method.a Trueb. False Unearned income is a revenue account.a Trueb. False The cost of noncurrent assets is allocated throughout the useful life of the assets by debiting the annual depreciation expense account.a Trueb. False Rent deposit is an expense account.a Trueb. False Accumulated depreciation is a liability account.a Trueb. False Depreciation expense is always equal to accumulated depreciation at the end of any accounting period.a Trueb. False Salvage value is the same as scrap value for the computation of depreciable amount.a Trueb. False Allowance for doubtful account is an expense account.a Trueb. False Prepayments are always taken up in the books as assets at the initial recording.a True b False Deferral is intended to recognize income earned but not yet received.a Trueb. False Under the expense method of recording prepayments, the unexpired portion at the end of accounting period is to be debited to asset account.a Trueb. False The cost of noncurrent asset less accumulated depreciation is called net book value.a Trueb. False The difference between the amount of accounts receivable and allowance for doubtful accounts is called carrying amount.a Trueb. False Adjusting entries are made to conform to the matching principle of accounting.a Trueb. False Adjusting entries are entries made at the end of an accounting period to update some accounts and ensure their accuracy before preparing the financial statements.a Trueb. False
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