29 Jun Question his part is worth 75 points.
Question
his part is worth 75 points.
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Part 2
QUESTION
1 of 37Accounts receivable is an example of which of the following?
Prepaid expense
An accrued expense
Unearned revenue
Accrued revenue
QUESTION
2 of 37On August 1, 2011, Xcel Auto Repair paid $6,000 for six months rent. After adjusting entries are made, what will be the balance of Prepaid Rent on December 31, 2011?
$4,000
$6,000
$2,000
$1,000
QUESTION
3 of 37On December 31, 2010, the balance in Pinnacle Exploration Company’s Unearned Revenue was $4,200. In January, 2011, the company received an advance payment of $12,000 for services to be performed. By May 31, adjustments had been made to recognize $8,500 of the revenue. What would be the balance in Unearned Revenue on May 31, 2011?
$16,200
$3,500
$8,500
$7,700
QUESTION
4 of 37At the end of the current year, the accountant for Navistar Graphics failed to make an adjusting entry for wages due to the company’s employees for the last week in December. The wages will be paid in January. What is one of the effects of this error?
Total assets are overstated.
Net income is understated.
Total liabilities are overstated.
Net income is overstated.
QUESTION
5 of 37What is the effect of the adjusting entry for depreciation expense?
The entry increases total assets and increases total expenses.
The entry decreases total assets and increases total expenses.
The entry increases total liabilities and increases total expenses.
The entry decreases total liabilities and increases total expenses.
QUESTION
6 of 37The adjusting entry to record supplies expense accomplishes which of the following?
Decreases a liability and increases a revenue
Decreases a liability and increases an expense
Increases an asset and increases an expense
Decreases an asset and increases an expense
QUESTION
7 of 37The adjusting entry to record unearned revenue that has now been earned accomplishes which of the following?
Increases an asset and increases an expense
Decreases a liability and increases an expense
Decreases an asset and increases an expense
Decreases a liability and increases a revenue
QUESTION
8 of 37Plant assets are long-lived tangible assets used in the operation of a business. The allocation of a plant asset’s cost to expense is which of the following?
Revenue allocation
Depreciation
The revenue principle
Historical cost
QUESTION
9 of 37The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of unearned service revenue that has now been earned. Which of the following is true?
Total liabilities are overstated.
Total liabilities are understated.
Total assets are overstated.
Total assets are understated.
QUESTION
10 of 37Which of the following reports a company’s financial position?
Balance sheet
Income statement
Statement of owner’s equity
Adjusted trial balance
QUESTION
11 of 37All of the financial statements include which of the following elements?
Title of the statement
Date, or period, covered by the statement
Name of the company
All of the above
QUESTION
12 of 37Which of the following is TRUE of plant asset accounts and their related accumulated depreciation accounts?
The allocation of a plant asset’s cost to expenses is called depreciation.
Accumulated depreciation is a contra-asset account that has a normal balance of a credit amount.
Accounting for plant assets is the same as accounting for a prepaid expense.
All of the above are true.
QUESTION
13 of 37Under which of the following inventory costing methods is the cost of goods sold based on the cost of the oldest purchases?
Specific unit cost
Average cost
Last in first out
First in first out
QUESTION
14 of 37Under which of the following inventory costing methods is the cost of goods sold based on the average cost of the purchases during the period?
Specific unit cost
Average cost
Last in first out
First in first out
QUESTION
15 of 37A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold 150 units for $45 each from March 1 through December 31. If the company uses the LIFO inventory costing method, which of the following amounts will be the amount of inventory on the December 31 balance sheet?
$1,000
$2,250
$1,500
$1,250
QUESTION
16 of 37Which of the following inventory costing methods yields the highest ending inventory when prices increase during the accounting period?
Specific unit cost
Average cost
Last in first out
First in first out
QUESTION
17 of 37Which of the following inventory costing methods is often adopted when a company sells relatively few costly items?
Specific unit cost
Average cost
Last in first out
First in first out
QUESTION
18 of 37
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