Acc499 Bachelor Capstone in Accounting: Unit 3 Quiz

Acc499 Bachelor Capstone in Accounting
Unit 3 Quiz

1. Failure to record the expired amount of prepaid rent expense would not
understate expense.
overstate net income.
overstate owners' equity.
understate liabilities.

2. The Supplies on Hand account balance at the beginning of the period was $6,600. Supplies totaling $12,825 were purchased during the period and debited to Supplies on Hand. A physical count shows $3,825 of Supplies on Hand at the end of the period. The proper journal entry at the end of the period
debits Supplies on Hand and credits Supplies Expense for $9,000.
debits Supplies Expense and credits Supplies on Hand for $12,825.
debits Supplies on Hand and credits Supplies Expense for $15,600.
debits Supplies Expense and credits Supplies on Hand for $15,600.

3. Which of the following is true?
Prepaid expenses are increased by a credit.
Gains are increased by a debit.
Losses are increased by a credit.
Accumulated depreciation is increased by a credit.

4. Which of the following criteria must be met before recording an accounting event?
The event must be an arm's-length transaction.
The event must be repeatable in a future period.
The event must be measurable in financial terms.
The event must be disclosed in the reported footnotes.

5. Sky Company collected $12,350 in interest during 2013. Sky showed $1,850 in interest receivable on its December 31, 2013, balance sheet and $5,300 on December 31, 2012. The interest revenue on the income statement for 2013 was
$3,450.
$8,900.
$12,350.
$14,200.

6. An adjusting entry will not take the format of which one of the following entries?
A debit to an expense account and a credit to an asset account
A debit to an expense account and a credit to a revenue account
A debit to an asset account and a credit to a revenue account
A debit to a liability account and a credit to a revenue account

7. Which of the following regarding accrual versus cash-basis accounting is true?
The FASB believes that the cash basis is appropriate for some smaller companies, especially those in the service industry.
The cash basis is less useful in predicting the timing and amounts of future cash flows of an enterprise.
Application of the cash basis results in an income statement reporting only revenues.
The cash basis requires a complete set of double-entry records.

8. If an expense has been incurred but not yet recorded, then the end-of-period adjusting entry would involve
a liability account and an asset account.
a liability account and a revenue account.
a liability and an expense account.
a receivable account and a revenue account.

9. A company sold 10,000 shares of its own $1 par value common stock for $60,000. The entry to record the sale would include a
debit to treasury stock for $60,000.
debit to contributed capital for $10,000.
credit to common stock, $1 par value for $10,000.
credit to common stock, $1 par value for $60,000.

10. How would proceeds received in advance from the sale of nonrefundable tickets for the Super Bowl be reported in the seller’s financial statements published before the Super Bowl?
Revenue for the entire proceeds.
Revenue less related costs.
Unearned revenue less related costs.
Unearned revenue for the entire proceeds.
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