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ACCT 1004S Week 6 Final Exam 2024 Latest Graded A+ (Fundamentals of Accounting Real Exam)
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ACCT 1004S Week 6 Final Exam 2024 Latest Graded A+ (Fundamentals of Accounting Real Exam)
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ACCT 1004S Week 6 Final Exam 2024 Latest Graded A+(Fundamentals of Accounting Real Exam)
Which of the following statements describes why accrual accounting better reflects a
business's performance? (Check all that apply.) - ANSWER: *Revenues are always
recorded in the period in which they are earned.
*Comparability of financial statements is improved.
*Expenses are always recognized in the period in which they are incurred.
The expense recognition matching principle aims to record ___ in the same
accounting period as the ___ that are earned as a result of those costs. This principle
is a major part of the ___ process. - ANSWER: *expenses
*revenues
*adjusting
Place the steps in the adjusting process in the correct order in which they would be
performed. - ANSWER: *determine what the current balance is
*determine what the balance should be
*make the adjusting entries
A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid
insurance account was initially increased for the payment. The required adjusting
journal entry on December 31 includes a: (Check all that apply.) - ANSWER: *debit to
Insurance expense for $400.
*credit to Prepaid insurance for $400.
A calendar year-end reporting period is defined as a ( / 12) -month period which
ends on___ - ANSWER: 12
December
On December 1, a company pays $3,600 for a 36-month insurance policy. After one
month, accrual accounting requires $ (100/3,600) of insurance expense be reported
on the income statement ending December 31. However, if cash basis accounting is
used, $ (100/3,600) of insurance expense would be reported at the time of purchase.
- ANSWER: Blank 1: 100
Blank 2: 3,600
Which of the following statements describes the expense recognition (matching)
principle? (Check all that apply.) - ANSWER: *Matching of expenses with revenues is
a major part of the adjusting process.
*Expenses should be matched in the same accounting period as the revenues that
are recognized as a result of those expenses.
Describe the final step in the adjusting process. - ANSWER: The final step is to create
an adjusting journal entry to get from step 1 to step 2.
, A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid
insurance account was increased for the payment. Demonstrate the required
adjusting journal entry on Dec. 31 by selecting from the choices below. - ANSWER:
Insurance expense would be debited for $300.
$800 of supplies were purchased at the beginning of the month and the Supplies
account was increased. As of the end of the period, $200 of supplies still remain.
Which of the following is the correct adjusting entry? - ANSWER: Supplies expense
would be debited for $600.
The revenue recognition principle states that revenue: - ANSWER: should be
recorded when goods or services are provided to customers at an amount expected
to be received
Which of the following accounts is considered a prepaid expense? - ANSWER:
Supplies
What is a plant asset? - ANSWER: A plant asset refers to a long-term tangible asset
used to produce and sell products or services.
$1,000 of supplies were purchased at the beginning of the month. $300 were used
during the month. (The Supplies account was increased at the time of the initial
purchase.) Demonstrate the required adjusting journal entry by selecting from the
choices below. (Check all that apply.) - ANSWER: Supplies would be credited for
$300.
Supplies expense would be debited for $300.
Explain what unearned revenues are by selecting the statements below which are
correct. (Check all that apply.) - ANSWER: *They refer to cash received in advance of
performing a service or product.
*They are a liability.
*They are also called deferred revenues.
*They are reported on a balance sheet.
Which of the following accounts would be considered a prepaid expense or prepaid
asset account? (Check all that apply.) - ANSWER: Prepaid insurance
Prepaid rent
Supplies
An advance payment of $1,000 for services was received on December 1 and was
recorded as a liability. By the end of the year, $400 had been earned. Demonstrate
the December 31 adjusting entry by choosing the correct statement below. -
ANSWER: Debit Unearned revenues for $400.
A plant asset can be defined by which of the following statements? (Check all that
apply.) - ANSWER: *It has a life within the business greater than one year or the
current operating cycle, whichever is longer.
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