Chapter 3 Accounting
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Accounting Qiuz
- 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.
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