Which of the following accounts require adjusting entries?

Select one:

a. Accounts Receivable

b. Cash

c. Inventory

d. Unearned Revenue

e. Accounts Payable

A company paying salaries to its employees that was previously recorded as a liability would involve:

Select one:

a. increase in Salaries Payable.

b. increase in Salaries Expense.

c. increase in Cash.

d. decrease in Cash.

e. decrease in Salaries Expense.

Joey Corporation borrows $500,000 from its bank, to purchase inventory and equipment. Which of the following statements is true of this transaction?

Select one:

a. Cash will decrease by $500,000.

b. Note payable will increase by $500,000.

c. Inventory will decrease by $500,000.

d. The amount of total assets will remain unchanged.

e. Liabilities will decrease.

Borrowing money from a bank will result in:

Select one:

a. increase in cash.

b. decrease in notes payable.

c. decrease in accounts receivable.

d. decrease in investments.

e. increase in equipment.

Which of the following accounts decreases with a debit?

Select one:

a. Asset

b. Liability

c. Expense

d. Dividends Paid

e. Loss

Which of the following accounts is closed at the end of the reporting cycle?

Select one:

a. Revenue

b. Assets

c. Liabilities

d. Retained Earnings

e. Common Stock

After the temporary accounts are closed at years end, the resulting single figure will be equal to:

Select one:

a. net income reported for the year.

b. beginning retained earning balance of the forthcoming year.

c. ending retained earning balance of the current year.

d. total cash flow for the current year.

e. beginning stockholders equity balance of the forthcoming year.

Coastal Corporation pays salaries of $30,000 to its employees. No accrual has been made for this amount. What is the financial impact of this transaction?

Select one:

a. Increase Salary Expense, Decrease Cash

b. Increase Salary Expense, Decrease Salary Payable

c. Increase Salary Payable, Decrease Salary Expense

d. Increase Cash, Decrease Salary Payable

e. Increase Prepaid Salary, Decrease Cash

Which of the following accounts would be closed at the end of the reporting cycle?

Select one:

a. Unearned Revenue

b. Cash

c. Retained Earnings

d. Sales Revenue

e. Supplies

Which of the following statements is prepared for a particular date?

Select one:

a. Income statement

b. Statement of retained earnings

c. Statement of cash flows

d. Balance sheet

e. General journal

Which of the following is true of closing entries?

Select one:

a. It is prepared to record the increase or decrease in accounts caused by usage or passage of time.

b. It effectively moves the balance of assets, liabilities, and stockholders equity into retained earnings.

c. It is prepared for revenues, expenses, gains, losses, and dividends paid.

d. It is prepared prior to preparation of financial statements.

e. It is optional to prepare closing entries under GAAP.

When customers pay in advance for a work yet to be performed, the company performing the work records a(an):

Select one:

a. prepaid revenue.

b. prepaid expense.

c. accrued expense.

d. accrued revenue.

e. unearned revenue.

Which of the following accounts increases with a credit?

Select one:

a. Dividends Paid

b. Asset

c. Retained Earnings

d. Loss

e. Expense

When a company pays for inventory previously purchased on account, the balance of:

Select one:

a. Cash will increase.

b. Inventory will decrease.

c. Accounts Payable will increase.

d. Inventory will increase.

e. Accounts Payable will decrease

After the closing entries are made for temporary accounts, the balance of these accounts are moved to:

Select one:

a. retained earnings

b. common stock

c. assets

d. liabilities

e. net income

Flanders Company sells capital stock of $4,500. Which of the following correctly identifies the accounts and their movements for this transaction?

Select one:

a. Cash increases by $4,500; Capital Stock decreases by $4,500.

b. Cash decreases by $4,500; Capital Stock decreases by $4,500.

c. Cash increases by $4,500; Note Payable increases by $4,500.

d. Cash increases by $4,500; Capital Stock increases by $4,500.

e. Capital Stock decreases by $4,500; Note Payable increases by $4,500.

Harris customers paid $560 in advance of Harris performing any work. Harris accountant debited cash and credited revenue when the cash was received. Which of the following statements is true?

Select one:

a. Harris net income is understated.

b. Harris retained earnings are overstated.

c. Harris cash is understated.

d. Harris liabilities are overstated.

e. Harris capital stock is understated.

Which of the following is prepared after the preparation of balance sheet?

Select one:

a. Closing entries

b. Adjusting entries

c. Adjusted trial balance

d. Statement of retained earnings

e. Ledger accounts

When Inventory is purchased on account:

Select one:

a. Cash increases and Accounts Payable decreases.

b. Inventory increases and Cash decreases.

c. Inventory decreases and Accounts Payable increases.

d. Cash decreases and Accounts Payable decreases.

e. Inventory increases and Accounts Payable increases.

On November 1, Year One, a company is paid $12,000 in advance to do a job for a customer. The job has ten separate steps. The first four steps were completed in Year One and the remaining six steps were completed in Year Two. The accountant mistakenly believed that this was just one big job and recorded it in that fashion. However, each of the ten steps was really an individual job and should have been accounted for in that way. Which of the following statements is true?

Select one:

a. At the end of Year One, the companys retained earnings are understated.

b. At the end of Year One, the companys liabilities are understated.

c. At the end of Year Two, the companys retained earnings are overstated.

d. At the end of Year Two, the companys net income is understat

ed.

e. At the end of Year Two, the companys assets are overstated.

Which of the following is the correct order of the steps followed by accounting systems?

Select one:

a. Analyze, Report, Record, and Adjust

b. Report, Record, Adjust, and Analyze

c. Analyze, Record, Adjust, and Report

d. Record, Analyze, Adjust, and Report

e. Adjust, Report, Analyze, and Record

Solomon Corporation earns revenue over time. What is the correct name for this account?

Select one:

a. Unearned Revenue

b. Prepaid Revenue

c. Adjusted Revenue

d. Accrued Revenue

e. Growth Revenue

Axom Corporation earns revenue over time by performing the same service daily. It will not be paid until the service is done, but each daily service is considered a separate job. If financial statements are prepared in the middle of the service time, what should Axom credit?

Select one:

a. Cash

b. Accounts Receivable

c. Cost of Goods Sold

d. Sales of Service

e. Deferred Revenue

Which of the following is a temporary account?

Select one:

a. Cash

b. Retained Earnings

c. Accounts Payable

d. Inventory

e. Dividends

Kylie Company pays $4,500 for insurance for the next 6 months. Which of the following is true of this transaction?

Select one:

a. Prepaid Insurance will increase.

b. Insurance Expense will increase.

c. Both assets and liabilities are impacted by this transaction.

d. Cash will increase.

e. Cash will not be affected.

Ryland Publishers collected $3,500 in cash from customers for future subscriptions. Which entry should Ryland make on the date the cash is received?

Select one:

a. Unearned Revenue: $3,500, Revenue: $3,500

b. Cash: $3,500, Revenue: $3,500

c. Revenue: $3,500, Unearned Revenue: $3,500

d. Cash: $3,500, Unearned Revenue: $3,500

e. Unearned Revenue: $3,500, Cash: $3,500

Which of the following accounts is affected when inventory is sold on account? Assume the company uses a perpetual inventory system.

Select one:

a. Accounts Payable

b. Unearned Revenue

c. Gain on Sale

d. Cost of Goods Sold

e. Cash

Which of the following accounts increases with a debit?

Select one:

a. Dividends Paid

b. Revenue

c. Retained earnings

d. Gain

e. Capital Stock

During the year, Cinci Corporation collected $15,000 of its accounts receivable. In recording this transaction, Cincis bookkeeper increased both cash and accounts receivable by $15,000. Accounts receivable balance at the beginning of the year was $88,000. This will result in:

Select one:

a. overstatement of assets.

b. understatement of liabilities.

c. understatement of Cash.

d. understatement of Accounts Receivable.

e. a balanced accounting equation.

Rent expense was debited to record for rent paid in advance. Which of the following accounts will be debited to record the adjusting entry for this transaction?

Select one:

a. Cash

b. Prepaid Rent

c. Rent Expense

d. Accounts Receivable

e. Accounts Payable

Which of the following statements is true about temporary accounts?

Select one:

a. They include changes over the life of the business.

b. They must all be returned to a zero balance after annual financial statements are produced.

c. The beginning balance of these accounts is equal to the ending figures reported on the previous year balance sheet.

d. The various amounts in these accounts are transferred to capital stock account at the end of the year.

e. Temporary accounts include assets, liabilities, capital stock and retained earnings.

Purchase of inventory on account will result in:

Select one:

a. increase in cash.

b. decrease in inventory.

c. increase in accounts payable.

d. decrease in cash.

e. decrease in accounts receivable

Which of the following statements is true about financial statements?

Select one:

a. Dividends paid are shown as a reduction on the income statement.

b. Assets reported on the balance sheet may or may not have a source.

c. Income statement is prepared for a particular date.

d. The total of assets is equal to the total of liabilities.

e. There is no T-account for ending retained earnings balance.

Which of the following is a permanent account?

Select one:

a. Retained Earnings

b. Revenue

c. Salaries Expense

d. Dividends

e. Gain on Sale of Building

If a company collects its accounts receivables, then its:

Select one:

a. Cash increases and Accounts Payable decreases.

b. Inventory increases and Cash decreases.

c. Cash increases and Accounts Receivable decreases.

d. Cash decreases and Accounts Receivable decreases.

e. Inventory increases and Accounts Receivable increases.

When inventory is sold on account, Sales Revenue increases and:

Select one:

a. Cash increases.

b. Accounts Receivable decreases.

c. Profit decreases.

d. Cash decreases.

e. Accounts Receivable increases.

Boston Company pays salaries of $2,000 to employees. No accrual has been made for this amount. Which of the following is true of this transaction?

Select one:

a. Cash increases by $2,000; Salaries Payable decreases by $2,000

b. Cash decreases by $2,000; Salaries Expense decreases by $2,000

c. Salaries Expense increases by $2,000; Salaries Payable decreases by $2,000

d. Salaries Expense increases by $2,000; Cash decreases by $2,000

e. Cash decreases by $2,000; Salaries Payable increases by $2,000

Which of the following does not have a T-account?

Select one:

a. Dividends Paid

b. Net Income

c. Cost of Goods Sold

d. Unearned Revenue

e. Common Stock

Short-term liabilities to pay for goods and services that have been acquired on credit is known as:

Select one:

a. accounts payable.

b. unearned revenue.

c. revenue payable.

d. retained earnings.

e. outstanding good

Martin Company purchased a sewing machine that cost $53,000 by paying $23,000 cash and signing a note for the remainder. What is the financial impact of this transaction?

Select one:

a. Note Payable decreases by $53,000.

b. Machine increases by $23,000.

c. Note Payable increases by $30,000.

d. Cash will decrease by $53,000.

e. Machine increases by $30,000.