Adjusting Entries quiz

Financial Accounting Quiz

بواسطة admin في سبتمبر 3, 2023 0

Adjusting Entries

1 / 12

Which of the following statements about the accrual basis of accounting is false ?

A) Revenue is recognized in the period in which services are performed

B) Revenue is recorded only when cash is received,and expense is recorded only when cash is paid

C) This basis is in accord with generally accepted accounting principles

D) Events that change a company’s financial statements are recorded in the periods in which the events occur

2 / 12

Adjusting entries are made to ensure that :

A) expenses are recognized in the period in which they are incurred

B) revenues are recorded in the period in which services are performed

C) All the responses above are correct

D) balance sheet and income statement accounts have correct balances at the end of an accounting period

3 / 12

Adjustments for unearned revenues :

A) decrease liabilities and increase revenues

B) increase assets and increase revenues

C) have an assets and revenues account relationship

D) decrease revenues and decrease assets

4 / 12

Accumulated Depreciation is :

A) an expense account

B) an owner’s equity account

C) a contra asset account

D) a liability account

5 / 12

The principle or assumption dictating that efforts (expenses) be matched with accomplishments (revenues) is the :

A) time period assumption

B) expense recognition principle

C) revenue recognition principle

D) cost assumption

6 / 12

Which item is a constraint in fnancial accounting ?

A) Cost

B) Consistency

C) Materiality

D) Comparability

7 / 12

Which of the following statements is incorrect concerning the adjusted trial balance ?

A) The adjusted trial balance lists the account balances segregated by assets and liabilities

B) The adjusted trial balance is prepared after the adjusting entries have been journalized and posted

C) The adjusted trial balance provides the primary basis for the preparation of financial statements

D) An adjusted trial balance proves the equality of the total debit balances and the total credit balances in the ledger after all adjustments are made

8 / 12

Adjustments for prepaid expenses :

A) decrease revenues and increase assets

B) decrease expenses and increase assets

C) decrease assets and increase revenues

D) decrease assets and increase expenses

9 / 12

The time period assumption states that :

A) the economic life of a business can be divided into artificial time periods

B) companies record information in the time period in which the events occur

C) companies use the fiscal year to report financial information

D) companies must wait until the calendar year is completed to prepare financial statements

10 / 12

The revenue recognition principle states that :

A) the economic life of a business can be divided into artificial time periods

B) the fiscal year should correspond with the calendar year

C) expenses should be matched with revenues

D) revenue should be recognized in the accounting period in which a performance obligation is satisfed

11 / 12

Adjustments for accrued revenues :

A) have a liabilities and revenues account relationship

B) decrease liabilities and increase revenues

C) have an assets and revenues account relationship

D) decrease assets and revenues

12 / 12

Each of the following is a major type (or category) of adjusting entries except :

A) recognized revenues

B) prepaid expenses

C) accrued expenses

D) accrued revenues

Your score is

the accrual basis of accounting

Adjusting entries for deferrals

Adjusting entries for accruals