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ACC 300 Week 1 WileyPLUS: Week 1, Assignment, Ch.4 Multiple Choice Questions
Complete Week 1, Assignment, Ch. 4, Multiple Choice Questions in WileyPLUS.
Multiple Choice Question 54
| Your answer is correct. | |
The periodicity assumption states that:
| a transaction can only affect one period of time. |
| estimates should not be made if a transaction affects more than one time period. |
| adjustments to the enterprise’s accounts can only be made in the time period when the business terminates its operations. |
| the economic life of a business can be divided into artificial time periods. |
Multiple Choice Question 55
| Your answer is correct. | |
One of the accounting concepts upon which adjustments for prepayments and accruals are based is:
| expense recognition. |
| cost. |
| monetary unit. |
| economic entity. |
Multiple Choice Question 58
| Your answer is correct. | |
Management usually wants ________ financial statements and the IRS requires all businesses to file _________ tax returns.
| annual, annual |
| monthly, annual |
| quarterly, monthly |
| monthly, monthly |
Multiple Choice Question 62
| Your answer is correct. | |
Under revenue recognition principle service-type businesses recognize revenue:
| at the end of the month. |
| at the end of the year. |
| when the service is performed. |
| when cash is received. |
Multiple Choice Question 64
| Your answer is correct. | |
Otto’s Tune-Up Shop follows the revenue recognition principle. Otto services a car on August 31. The customer picks up the vehicle on September 1 and mails the payment to Otto on September 5. Otto receives the check in the mail on September 6. When should Otto show that the revenue was recognized?
| September 5 |
| August 31 |
| September 6 |
| August 1 |
Multiple Choice Question 68
| Your answer is correct. | |
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?
| December 10 |
| November 30 |
| December 1 |
| December 5 |
Multiple Choice Question 72
| Your answer is correct. | |
On April 1, 2017, nPropel Corporation paid $48000 cash for equipment that will be used in business operations. The equipment will be used for four years. nPropel records depreciation expense of $48000 for the calendar year ending December 31, 2017. Which accounting principle has been violated?
| Depreciation principle. |
| Expense recognition principle. |
| No principle has been violated. |
| Cash principle. |
Multiple Choice Question 73
| Your answer is correct. | |
Under the cash basis of accounting:
| revenue is recognized when services are performed. |
| a promise to pay is sufficient to recognize revenue. |
| expenses are matched with the revenue that is produced. |
| cash must be received before revenue is recognized. |
Multiple Choice Question 78
| Your answer is correct. | |
The following is selected information from L Corporation for the fiscal year ending October 31, 2017.
| Cash received from customers | $300000 |
| Revenue recognized | 440000 |
| Cash paid for expenses | 170000 |
| Cash paid for computers on November 1, 2016 that will be used for 3 years | 48000 |
| Expenses incurred including any depreciation | 216000 |
| Proceeds from a bank loan, part of which was used to pay for the computers | 100000 |
Based on the accrual basis of accounting, what is L Corporation’s net income for the year ending October 31, 2017?
| $254000 |
| $224000 |
| $270000 |
| $208000 |
Multiple Choice Question 80
| Your answer is correct. | |
La More Company had the following transactions during 2016:
• Sales of $9000 on account
• Collected $4000 for services to be performed in 2017
• Paid $3750 cash in salaries for 2016
• Purchased airline tickets for $500 in December for a trip to take place in 2017
What is La More’s 2016 net income using accrual accounting?
| $9750 |
| $5750 |
| $9250 |
| $5250 |
| ||||||||||||||
Multiple Choice Question 87
| Your answer is correct. | |
Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting.
| Cash received from customers | $45000 | |
| Accounts receivable | 12000 | |
| Cash paid for expenses | 26000 | |
| Accounts payable (related to expenses) | 3000 | |
| Prepaid rent for next period | 7000 |
| $19000 |
| $28000 |
| $21000 |
| $12000 |
Multiple Choice Question 91
Which of the following is an example of a deferral adjusting entry?
| Accrued expense. |
| All of these choices are correct. |
| Accrued revenue. |
| Prepaid expense. |
Multiple Choice Question 100
| Your answer is correct. | |
Which one of the following is not a justification for adjusting entries?
| Adjusting entries are necessary to bring the general ledger accounts in line with the budget. |
| Adjusting entries are necessary to enable financial statements to be in conformity with GAAP. |
| Adjusting entries are necessary to ensure that the expense recognition principle is followed. |
| Adjusting entries are necessary to ensure that the revenue recognition principle is followed. |
Multiple Choice Question 104
| Your answer is correct. | |
If a resource has been consumed but a bill has not been received at the end of the accounting period, then:
| an expense should be recorded when the cash is paid out. |
| it is optional whether to record the expense before the bill is received. |
| an expense should be recorded when the bill is received. |
| an adjusting entry should be made recognizing the expense. |