Test Your Accounting Basics: Quiz!

8 Questions | By Txprincessshan | Last updated: Mar 20, 2022 | Total Attempts: 336

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Test Your Accounting Basics: Quiz! - Quiz

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 the 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 require 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.

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