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Accounting 201 - Chapter 3

40 Questions  I  By Jc173
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Accounting 201 Chapter 3

  
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1.  Under accrual accounting, revenue is recorded
A.
B.
C.
2.  A company using the accrual basis of accounting pays $15,000 for a television advertising campaign.  Commercials will run evenly in December, January, and February. How much expense will be reported on an income statement prepared for the month of December?
A.
B.
C.
D.
3.  To obtain a new customer, a business sells merchandise to the customer for $65. Normally, the merchandise sells for $85. For this sale, the business should record revenue of
A.
B.
C.
4.  Adjusting entries are:
A.
B.
C.
D.
5.  Prepaid insurance is reported on the balance sheet as a(n):
A.
B.
C.
D.
6.  The book value of a plant asset is the
A.
B.
C.
D.
7.  A liability that arises from an expense that has not yet been paid is a(n):
A.
B.
C.
D.
8.  Unearned revenue is a(n):
A.
B.
C.
D.
9.  Which account is debited in the adjusting entry to record salaries owed to employees, but not paid until next accounting period?
A.
B.
C.
D.
10.  The book value of an asset that cost $20,000 and has accumulated depreciation of $6,000 is
A.
B.
C.
D.
11.  A company has $800 in beginning supplies and $150 of supplies on hand at the end of the month.  The adjusting entry for this company is:
A.
B.
C.
D.
12.  An accrual refers to an event where the
A.
B.
C.
D.
13.  The financial statements are prepared from the
A.
B.
C.
D.
14.  How does an accrued expense adjustment affect the financial statements?  The adjustment
A.
B.
C.
D.
15.  What effect does an accrued revenue adjustment have on a company’s net income?
A.
B.
C.
D.
16.  Which of the following is NOT true regarding the adjusting process?
A.
B.
C.
D.
17.  After the adjustments are journalized and posted, a(n) _____________ can be prepared to aid in the preparation of the financial statements:
A.
B.
C.
D.
18.  Accounts that relate to a limited period are called:
A.
B.
C.
D.
19.  Which of the following accounts is considered a "temporary" account?
A.
B.
C.
D.
20.  Closing entries transfer the revenue, expense, and dividends balances to:
A.
B.
C.
D.
21.  On September 1, Boz sold to Skaggs prepaid maintenance for $6,000 for six months.  As of December 31, what is the amount that has been earned?
A.
B.
C.
D.
22.  Which of the following financial statements is prepared using the adjusted trial balance?
A.
B.
C.
D.
23.  Which account is debited in the adjusting entry to record insurance expired during the current period?
A.
B.
C.
D.
24.  An expense incurred in 2010 is not paid until 2011. Using the accrual basis of accounting, the expense should appear on:
A.
B.
C.
D.
25.  According to the revenue principle, revenue should be recorded
A.
B.
C.
D.
26.  In most cases, revenue is earned
A.
B.
C.
D.
27.  Thompson Company executives are planning a $5 million advertising campaign. The expense of this advertising campaign should be recognized when
A.
B.
C.
D.
28.  An expense that is paid in advance is a(n):
A.
B.
C.
D.
29.  Prepaid expenses will:
A.
B.
C.
D.
30.  Current assets include
A.
B.
C.
D.
31.  A company has $900 in beginning supplies and $700 of supplies used during the month.  The adjusting entry for this company is:
A.
B.
C.
D.
32.  Which account is debited in the adjusting entry to record depreciation expense during the current period?
A.
B.
C.
D.
33.  Which of the following accurately describes the account type of the Accumulated Depreciation account?
A.
B.
C.
D.
34.  Which of the following accurately describes the normal balance of the Accumulated Depreciation account?
A.
B.
35.  On November 1, Phillips Tool and Die Company paid six months’ insurance in advance totaling $9,000.  An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Insurance account of:
A.
B.
C.
D.
36.  To close the expense accounts
A.
B.
C.
37.  On November 1 of the current year, Prepaid Rent was debited $5,400 for three months of rent, paid in advance. The amount of the adjusting entry on December 31 is (2 months):
A.
B.
C.
D.
38.  On August 1 of the current year, Jamie Simmons received $5,400 for legal services to be performed  evenly throughout the next six months. An adjusted trial balance prepared on December 31 of the current year will show a credit balance in Unearned Revenue in the amount of:
A.
B.
C.
D.
39.  To record wages that have been earned but have not been paid:
A.
B.
C.
D.
40.  To close the revenue account:
A.
B.
C.
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