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Chapter 3 Accounting

8 Questions
Accounting Quizzes & Trivia

Accounting Qiuz

Questions and Answers
  • 1. 
    The revenue recognition concept
    • A. 

      Controls all revenue reporting for the cash basis of accounting

    • B. 

      Determines when revenue is credited to a revenue account

    • C. 

      Is in not in conflict with the cash method of accounting

  • 2. 
    An adjusting entry would adjust an expense account so the expense is reported when incurred.
    • A. 

      True

    • B. 

      False

  • 3. 
    Proper reporting of revenues and expenses in a period is due to the accounting period concept.
    • A. 

      True

    • B. 

      False

  • 4. 
    The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.
    • A. 

      True

    • B. 

      False

  • 5. 
    What is the proper adjusting entry at April 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $16,000, and unexpired amounts per analysis of policies, $6,000?
    • A. 

      Debit Insurance Expense, $10,000; credit Prepaid Insurance, $10,000

    • B. 

      Debit Insurance Expense, $16,000; credit Prepaid Insurance, $16,000

    • C. 

      Debit Prepaid Insurance, $10,000; credit Insurance Expense, $10,000

  • 6. 
    Generally accepted accounting principles requires that companies use the ____ of accounting.
    • A. 

      Accrual basis

    • B. 

      Account basis

    • C. 

      Cash basis

  • 7. 
    The entry to adjust for the cost of supplies used during the accounting period is
    • A. 

      Supplies Expense, debit; Supplies, credit

    • B. 

      Accounts Payable, debit; Supplies, credit

    • C. 

      Accounts Receivable, debit;supplies, credit

  • 8. 
    By matching revenues and expenses in the same period in which they incur
    • A. 

      Net income or loss will be properly reported on the income statement

    • B. 

      Net income or loss will always be overestimated.

    • C. 

      Net income or loss will always be underestimated.