Question Question 1 of 20

29 Jun Question Question 1 of 20

Question
Question 1 of 20

5.0/ 5.0 Points

In a transaction where purchased merchandise has been returned, the buyer will increase the Sales Returns and Allowances account and the seller will increase the Purchases Returns and Allowances account.

A. True

B. False

Answer Key:

Question 2 of 20

5.0/ 5.0 Points

Liabilities that will not be due for more than one year are called long-term liabilities.

A. True

B. False

Answer Key:

Question 3 of 20

0.0/ 5.0 Points

UNI Co. received $1,000 advance from Newbie as rent for the use of a building owned by UNI. How does this transaction affect UNI’s accounts if UNI recognizes a liability?

A.Cash is increased and revenue is increased.

B.Cash is increased and revenue is decreased.

C.Cash is increased and unearned revenue is increased.

In D.It is not recorded.

Answer Key:

Question 4 of 20

5.0/ 5.0 Points

Which of the following accounts would likely be included in a deferral adjusting entry?

A.Interest Revenue

B.Unearned Revenue

C.Salaries Payable

D.Accounts Receivable

Answer Key: BQuestion 5 of 20

5.0/ 5.0 Points

The amount of the total cash paid to the seller for merchandise purchased would normally include:

A.only the list price.

B.only the sales tax.

C.the list price plus the sales tax.

D.the list price less the sales tax.

Answer Key:

Question 6 of 20

0.0/ 5.0 Points

The merchandise inventory account is found on the balance sheet.

In

A. True

B. False

Answer Key:

Question 7 of 20

5.0/ 5.0 Points

Sales discounts are granted by the seller to customers for payment at the end of the month.

A. True

B. False

Answer Key:

Question 8 of 20

5.0/ 5.0 Points

Which transaction would be recorded in a cash basis system of accounting?

A.Purchase of equipment by signing a note

B.Purchase of supplies on credit

C.Sale of goods against a note

D.Sale of goods for cash

Answer Key: D

Question 9 of 20

5.0/ 5.0 Points

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

A. true

B. False

Answer Key:

Question 10 of 20

5.0/ 5.0 Points

If the buyer is to pay the delivery expense of delivering merchandise, delivery terms are stated as:

A.FOB shipping point.

B.FOB destination.

C.FOB n/30.

D.FOB buyer.

Answer Key:

Question 11 of 20

5.0/ 5.0 Points

The liabilities that are due to be paid usually within a year of less are called:

A.long-term liabilities.

B.deferred liabilities.

C.current liabilities.

D.contingent liabilities.

Answer Key:

Question 12 of 20

5.0/ 5.0 Points

Under the accrual basis of accounting, net cash flows from operating activities on the statement of cash flows will normally be the same as net income.

A. True

B. False

Answer Key:

Question 13 of 20

5.0/ 5.0 Points

On April 1, Bear, Inc. paid $2,400 for an insurance premium on a three-year insurance policy. At the end of December, Bear’s fiscal year-end, what should be the balance in the prepaid insurance account?

A.$2,700

B.$3,000

C.$2,400

D.$1,800

Answer Key:

Question 14 of 20

5.0/ 5.0 Points

Since merchandise inventory is normally sold within a year, how is it reported on the balance sheet?

A.As a revenue

B.As the cost of merchandise sold

C.It does not appear on the balance sheet

D.As a current asset

Answer Key:

Question 15 of 20

5.0/ 5.0 Points

The accrual basis of accounting requires revenue to be recorded when the service is performed.

A. True

B. False

Answer Key:

Question 16 of 20

5.0/ 5.0 Points

Eagle Eye, Inc., a corporation, received an additional investment of $6,000 cash in exchange for shares of capital stock. How does this transaction affect Eagle Eye’s accounts?

A.Increase in stock expense and decrease cash by $6,000 each

B.Increase capital stock and increase cash by $6,000 each

C.Increase capital stock and increase revenue by $6,000 each

D.Increase capital stock and decrease retained earnings by $6,000 each

Answer Key:

Question 17 of 20