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Which of the following journal entries is created to adjust for a previously recorded deferral?


A) Which of the following journal entries is created to adjust for a previously recorded deferral? A) B) C) D)
B) Which of the following journal entries is created to adjust for a previously recorded deferral? A) B) C) D)
C) Which of the following journal entries is created to adjust for a previously recorded deferral? A) B) C) D)
D) Which of the following journal entries is created to adjust for a previously recorded deferral? A) B) C) D)

E) None of the above
F) B) and D)

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A

Which of the following statements regarding earnings per share is not correct?


A) Earnings per share can be reported on the income statement.
B) The numerator is net income.
C) The denominator is the average number of shares of common stock outstanding.
D) Earnings per share does not have to be disclosed on the income statement or the notes to the financial statements.

E) B) and C)
F) A) and D)

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What is the effect on the financial statements when a company fails to record depreciation expense at year-end?


A) Net income is overstated and stockholders' equity is understated.
B) Expenses are understated and stockholders' equity is understated.
C) Expenses are understated and liabilities are overstated.
D) Net income is overstated and assets are overstated.

E) B) and C)
F) A) and D)

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Bridge Company keeps a small inventory of supplies used for cleaning and maintenance purposes.On January 1,2019,the inventory of supplies on hand was $2,000.During the year,supplies purchased were debited to the supplies account in the amount of $6,500.On December 31,2019,the amount of supplies in the storeroom was $1,750.The books are adjusted only at year-end. Prepare the adjusting entry required at December 31,2019.

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blured image $2,000 + ...

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Which is the correct sequence of the following steps in the accounting cycle?


A) Prepare journal entries,analyze transactions,prepare adjusted trial balance.
B) Prepare adjusted trial balance,prepare closing entries,and prepare financial statements.
C) Post adjusting journal entries,prepare adjusted trial balance,prepare financial statements.
D) Post closing entries,prepare financial statements,prepare adjusted trial balance.

E) A) and D)
F) B) and C)

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Which of the following does not correctly describe an adjusting journal entry that debits rent expense and credits prepaid rent?


A) The entry increases expenses and decreases stockholders' equity.
B) The entry decreases net income and decreases assets.
C) The entry increases expenses and decreases current assets.
D) The entry decreases net income and decreases liabilities.

E) A) and C)
F) A) and B)

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Which of the following statements regarding the balance sheet is false?


A) Buildings and equipment are reported at book value.
B) Assets are reported in the order of liquidity.
C) Current liabilities are obligations to be paid with current assets.
D) The balance sheet reflects balances for a period of time.

E) None of the above
F) All of the above

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Cash collected from customers in advance of providing the goods or services creates a liability,which is later reduced when the goods or services are provided.

A) True
B) False

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Which of the following correctly describes the closing entry process?


A) The closing process reduces the balances in the permanent accounts to zero at the end of each period.
B) The closing entries are usually prepared prior to the adjusted trial balance.
C) The closing process creates a zero balance in all temporary accounts at the end of each period.
D) The closing process creates a zero balance at the end of each period for all accounts on the year-end trial balance.

E) C) and D)
F) All of the above

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Which one of the following accounts would not be closed at the end of the accounting year?


A) Utilities expense.
B) Sales revenue.
C) Prepaid rent.
D) Wages expense.

E) C) and D)
F) A) and B)

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Which of the following account balances would not be closed at year-end by debiting the account?


A) Interest revenue.
B) Gain on sale of building.
C) Sales revenue.
D) Unearned revenue.

E) None of the above
F) All of the above

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Which of the following account balances would not be affected by closing entries?


A) Interest expense.
B) Accumulated depreciation.
C) Treasury stock.
D) Retained earnings.

E) B) and C)
F) B) and D)

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At the end of the accounting period,the balances in the nominal accounts are closed while the balances in the real accounts are carried forward to the next accounting period.

A) True
B) False

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Modern Mother Magazine (MMM)has received cash subscriptions on April 1,2019 in the amount of $3,600,000 for the next three years.The year-end for MMM is December 31,2019.Magazine delivery occurs monthly and started on April 1,2019.These were the only subscription sales for the year. Answer the following questions for the year ended December 31,2019. A.What amount of cash should be reported for the year on the statement of cash flows? B.What amount of subscriptions revenue should be reported on the income statement? C.What amount would be reported as unearned subscriptions revenue on the balance sheet as of December 31,2019?

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A.$3,600,000.
B.$900...

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Which of the following correctly describes the following adjusting journal entry? Which of the following correctly describes the following adjusting journal entry? A) Total assets decrease and net income decreases. B) Stockholders' equity decreases and liabilities increase. C) The transaction is an example of a deferral. D) Net income decreases and stockholders' equity does not change.


A) Total assets decrease and net income decreases.
B) Stockholders' equity decreases and liabilities increase.
C) The transaction is an example of a deferral.
D) Net income decreases and stockholders' equity does not change.

E) None of the above
F) C) and D)

Correct Answer

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B

Which of the following accounts is used to record an accrual for expenses?


A) Prepaid rent.
B) Unearned revenues.
C) Accounts receivable.
D) Interest payable.

E) C) and D)
F) A) and B)

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Under accrual accounting,interest expense would be recognized on the income statement when the interest has accrued with the passage of time even though cash has not been paid.

A) True
B) False

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Which of the following does not correctly describe an adjusting journal entry that debits depreciation expense and credits accumulated depreciation?


A) The entry increases expenses and increases assets.
B) The entry decreases net income and decreases assets.
C) The entry increases expenses and decreases retained earnings.
D) The entry decreases assets and decreases net income.

E) C) and D)
F) B) and C)

Correct Answer

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A

On November 1,2019,Bruce Company leased some of its office space to Fairlane Company and immediately collected $600,000 for twelve months rent in advance.Bruce debited cash and credited unearned rent revenue for $600,000. Prepare the December 31,2019 adjusting entry Bruce should make in respect to the rent,assuming no adjusting entries have been made during the year.

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blured image $600,000 ...

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Which of the following statements is inaccurate with respect to the total asset turnover ratio?


A) The ratio is calculated as sales revenues divided by total assets at year-end.
B) The ratio is decreased when additional plant and equipment is purchased.
C) A high ratio implies efficient management of assets.
D) The ratio is decreased when additional inventory is purchased.

E) C) and D)
F) B) and D)

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