Reference no: EM132708014
Questions -
Question 1 - The timeliness principle assumes that an organization's activities can be divided into specific time periods including
1) One month
2) Quarters
3) Fiscal year
4) Calendar year
5) All of these
Question 2 - On January 1, 2020, Peach Company purchased a five-year insurance policy for $5,000. If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2020 is
1) Debit Prepaid Insurance, $1,800; credit Cash, $1,800
2) Debit Prepaid Insurance, $1,000; credit Insurance Expense, $1,000
3) Debit Prepaid Insurance, $360; credit Insurance Expense, $360
4) Debit Insurance Expense, $360; credit Prepaid Insurance, $360
5) Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000
Question 3 - For a prepaid expense, the adjusting entry would
1) Result in a debit to an expense account and a credit to an asset account
2) Cause a prepaid expense to be overstated and liabilities to be understated
3) Result in a credit to an expense account and a debit to an asset account
4) Result in a debit to a liability account and a credit to an asset account
5) Decrease cash
Question 4 - Before recording adjusting entries, the Office Supplies account had a $359 debit balance while a physical count of the supplies showed $105 of unused supplies on hand. Thus, the required adjusting entry is
1) Debit Office Supplies $105 and credit Office Supplies Expense $105
2) Debit Office Supplies Expense $254 and credit Office Supplies $254
3) Debit Office Supplies Expense $105 and credit Office Supplies $105
4) Debit Office Supplies $254 and credit Office Supplies Expense $254
5) Some other entry
Question 5 - The FastForward Company balance sheet shows cash $5,000, accounts receivable $7,000, office equipment $3,000, and accounts payable $4,000. What is the amount of equity?
1) $1,000
2) $11,000
3) $12,000
4) $15,000
5) $19,000
Question 6 - Generally accepted accounting principles are
1) not used in the real world
2) are required to make financial statement information relevant and faithfully represented
3) are only used for internal reporting
4) are only used by auditors
5) are only used for reporting to Canada Revenue Agency
Question 7 - The Unadjusted Trial Balance columns of the work sheet show the balance in the Office Supplies account at $750. The Adjustments columns show that $425 of these supplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns is
1) $325 debit
2) $325 credit
3) $425 debit
4) $750 debit
5) $750 credit
Question 8 - Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming year and to update the owner's capital account for the events of the year just finished are
1) Adjusting entries
2) Closing entries
3) Final entries
4) Work sheet entries
5) None of these answers is correct.
Question 9 - Which of the following statements is incorrect?
1) An adjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments.
2) Interim financial reports can be based on one-month or three-month accounting periods.
3) The fiscal year is any 12 consecutive months used by a business as its annual accounting period.
4) Property, plant, and equipment are long term assets.
5) The cash basis of accounting is consistent with GAAP.
Question 10 - Source documents
1) do not provide objective evidence about transaction
2) are a source of accounting information.
3) can only be in electronic form
4) are only used for audit purposes
5) are acceptable as a substitute for financial statements
Question 11 - A business
1) is one or more individuals selling products or services for profit
2) can only have one legal form of organization
3) can have adequate financial records without a formal accounting system
4) has to issue shares before it opens
5) is one or more individuals selling products or services for profit and has to issue shares before it open