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Exam 2: Accounting for Accruals and Deferrals

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Question 1

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Which of the following is an asset source transaction?

A) Issued common stock
B) Paid a cash dividend to stockholders
C) Collected cash from customers in settlement of accounts receivable
D) Accrued salary expense

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Question 2

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Revenues and expenses are temporary accounts.

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Question 3

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The cash payment of interest is classified as a financing activity on the statement of cash flows.

Which of the following events would not require a year-end adjusting entry?

Sometimes the recognition of revenue is accompanied by an increase in liabilities.

Which of the following choices accurately reflects how the recording of accrued salary expense affects the financial statements of a business?

The governance of a corporation includes the roles and responsibilities of the board of directors,managers,shareholders,and auditor.

What is the purpose of the accrual basis of accounting?

Which of the following types of accounts is not closed at the end of an accounting cycle?

Recognition of depreciation expense is an asset use transaction.

Which of the following statements is true regarding accrual accounting?

The term "accrual" describes an earnings event that is recognized before cash is received or paid.

Which of the following statements best describes the balance in a revenue account at the beginning of an accounting period?

Prior to closing,Syracuse Company's accounting records showed the following balances: After closing,what is the balance of the Retained Earnings account?

On January 1,Year 2,the Supplies account of Sheldon Company had a balance of $1,200.During the year,the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts.On December 31,Year 2,Sheldon determined that there were $1,400 of supplies on hand.Which of the following would be reported on Sheldon's Year 2 financial statements?

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31,Year 1: -What is the amount of total assets that will be reported on the balance sheet as of December 31,Year 1?

Adjusting entries never affect a business's cash account.

[The following information applies to the questions displayed below.] Nelson Company experienced the following transactions during Year 1, its first year in operation. Acquired $12,000 cash by issuing common stock Provided $4,600 of services on account Paid $3,200 cash for operating expenses Collected $3,800 of cash from customers in partial settlement of its accounts receivable Paid a $200 cash dividend to stockholders -What is the amount of net income that will be reported on the Year 1 income statement?

On September 1,Year 1,Gomez Company collected $9,000 in advance from a customer for services to be provided over a one-year period beginning on that date.How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31,Year 1? How much would the company report as net cash flows from operating activities for Year 1?

How would a payment for rent paid in advance be classified?