ACC 556 WEEK 2 HOMEWORK CHAPTER 3 AND 4
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ACC 556 WEEK 2 HOMEWORK CHAPTER 3 AND 4
CHAPTER 3
1.
Economic events that
require recording in the financial statements are called accounting
transactions.
2.
An account is often
referred to as a T-account because of the way it is constructed.
3.
Revenues are a
subdivision of stockholders’ equity.
4.
Salaries and wages
payable is a type of expense.
5.
Operating activities
are the types of activities the company performs to generate profits.
6.
If total liabilities
decreased by $4,000, then
7.
An expense
8.
Are advanced receipts
from customers treated as revenue at the time of receipt? Why or why not?
9.
Which statement about
an account is true?
10. Which one of the following represents the
expanded basic accounting equation?
11. Which of the following is not an example of a
source document that provides evidence of a transaction?
12. The primary purpose of the trial balance is to
13. Which of the following statements is not true?
14. All of the following are characteristics of
every accounting information system except it is a system
15. On June 1, 2014, England Inc. reported a cash
balance of $21,000. During June, England made deposits of $8,000 and made
disbursements totaling $24,000. What is the cash balance at the end of June?
16. All of the following statements regarding the
double-entry system are true except
17. Borrowing money and issuing shares of stock
are
18. Which statement is incorrect?
19. Match the items below by entering the
appropriate code letter in the space provided.
CHAPTER 4
1.
The revenue
recognition principle dictates that revenue be recognized in the accounting
period in which the performance obligation is satisfied.
2.
An adjusting entry to
a prepaid expense is required to recognize expired expenses.
3.
Unearned revenue is a
prepayment that requires an adjusting entry when services are performed.
4.
When closing entries
are prepared, each income statement account is closed directly to retained
earnings.
5.
The accounting cycle
begins with the journalizing of the transactions.
6.
Management usually wants
________ financial statements and the IRS requires all businesses to file
_________ tax returns.
7.
A flower shop makes a
large sale for $1,000 on November 30. The customer is sent a statement on
December 5 and a check is received on December 10. The flower shop follows GAAP
and applies the revenue recognition principle. When is the $1,000 considered to
be recognized?
8.
Which statement is
correct?
9.
Given the data below
for a firm in its first year of operation, determine net income under the cash
basis of accounting.
Cash received from customers $48,000
Accounts receivable 12,000
Cash paid for expenses 26,000
Accounts payable (related to expenses) 3,000
Prepaid rent for next period 7,000
Cash received from customers $48,000
Accounts receivable 12,000
Cash paid for expenses 26,000
Accounts payable (related to expenses) 3,000
Prepaid rent for next period 7,000
10. Accrued expenses are:
11. If a resource has been consumed but a bill has
not been received at the end of the accounting period, then:
12. Depreciation is the process of:
13. If a company fails to adjust a Prepaid Rent
account for rent that has expired, what effect will this have on that month’s
financial statements?
14. Why do generally accepted accounting
principles require the application of the revenue recognition principle?
15. Which of the following would not result in
unearned revenue?
16. Failure to prepare an adjusting entry at the
end of the period to record an accrued expense would cause:
17. At the end of the fiscal year, the usual
adjusting entry for accrued salaries owed to employees was omitted. Which of
the following statements is true?
18. Can financial statements be prepared directly
from the adjusted trial balance?
19. Which statement is correct concerning the
adjusted trial balance?
20. Match the items below by entering the
appropriate code letter in the space provided.
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