FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: The Accounting Cycle: End of the Period

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Multiple Choice

Review LaterAdd Note

Review Later

The following events pertain to Jasper Corporation: May 1 Jasper purchased office supplies of $3,000 on account.May 5 The office supplies were shipped to Jasper.May 8 Jasper used these office supplies for a one-time event.May 9 Jasper paid $3,000 cash for the office supplies purchased on May 1.Using cash-basis accounting,on which date should Jasper record supplies expense?

A) May 1.
B) May 5.
C) May 8.
D) May 9.

E) A) and B)
F) All of the above

Correct Answer

verified

Show Answer

Question 72

True/False

Review LaterAdd Note

Review Later

After closing entries are prepared,the balance of Retained Earnings is updated to reflect the activity in the revenue,expense,and dividend accounts for the period.

A) True
B) False

Correct Answer

verified

Show Answer

Question 73

True/False

Review LaterAdd Note

Once the adjusted trial balance is complete,financial statements are prepared.

The closing entry for expenses includes:

Current assets include:

In the first three years of operations,Lindsey Corporation earned net income/loss of -$150,000,$100,000,and $250,000.At the end of the third year,Lindsey Corporation has a balance of $120,000 in its Retained Earnings account.What is the total amount of dividends Lindsey Corporation paid over the three years?

A company received an order from a customer in June for services to be provided.Those services were provided in July,and the customer paid the full amount in August.According to the revenue recognition principle,in which month should the company record revenue?

The ending balance of Retained Earnings can best be described as:

Under cash-basis accounting,the timing of cash inflows and outflows exactly matches the reporting of revenues and expenses in the income statement.

The accounting basis that helps to measure and report revenues and expenses in a way that clearly reflects the ability of a company to generate value for its owners is referred to as:

Jones Corporation provides services to a customer on June 17,but the customer does not pay for the services until August 12.According to the revenue recognition principle,Jones Corporation should record the revenue on August 12.The revenue recognition principle requires that revenue be recorded when earned (June 17).

If a company records cash received for services to be provided in the future with a debit to Cash and a credit to Service Revenue,how will this error affect total assets for the current period?

Permanent accounts would not include:

Consider the following events for Sophia Incorporated: Under accrual-basis accounting,what is the appropriate day to record the revenues from the sand volleyball camp? $\begin{array} { | l | l | } \hline \text { April } 5 & \text { Sophia purchases volley balls for } \$ 200 \text { on account. } \\\hline \text { April } 6 & \text { Sophia advertises a sand volleyball camp for } \$ 20 \text { a person. } \\\hline \text { April } 12 & \text { Thiry people sign up for the camp paying a total of } \$ 600 . \\\hline \text { April } 21 & \text { Sophia hosts the sand volleyball camp. } \\\hline \text { April } 23 & \text { Sophia pays for the volleyballs purchased on April } 5 . \\\hline\end{array}$

Pawn Shops Unlimited recorded the following four transactions during April.Which of these transactions would have the same income statement impact in April regardless of whether the company used accrual-basis or cash-basis accounting?

When a company provides services on account,which of the following would be recorded using cash-basis accounting?

After closing entries are posted to the accounts in the general ledger,all asset and liability accounts have a balance of zero.After closing entries are prepared,all revenue,expense,and dividend accounts have a balance of zero.

The following events pertain to Bills Company: Using accrual-basis accounting,on which date should Bills Company record revenue for the accounting and tax services? $\begin{array}{|l|l|}\hline \text { December } 28,2018 & \begin{array}{l}\text { Bills was contacted by a customer for possible accounting and } \\\text { tax services. }\end{array} \\\hline \text { December } 30,2018 & \begin{array}{l}\text { Bills signed a formal agreement with the customer to provide } \\\text { accounting and tax senvices in } 2019 .\end{array} \\\hline \text { January } 4,2019 & \begin{array}{l}\text { The customer paid } \$ 1,000 \text { in advance tor the services to be } \\\text { provided by Bills Company. }\end{array} \\\hline \text { January } 11,2019 & \text { Bills provided accounting and tax services to the customer. } \\\hline\end{array}$

The following table contains financial information for Trumpeter's Inc.before closing entries: What is the amount of Trumpeter's total stockholders' equity? $\begin{array} { | l | r | } \hline \text { Cash } & \$ 12,000 \\\hline \text { Supplies } & 4,500 \\\hline \text { Prepaid Rent } & 2,000 \\\hline \text { Salaries Expense } & 4,500 \\\hline \text { Equipment } & 65,000 \\\hline \text { Service Revenue } & 30,000 \\\hline \text { Miscellaneous Expenses } & 20,000 \\\hline \text { Dividends } & 3,000 \\\hline \text { Accounts Payable } & 5,000 \\\hline \text { Common Stock } & 68,000 \\\hline \text { Retained Earnings } & 8,000 \\\hline\end{array}$

Because cash-basis accounting violates both the revenue recognition principle and the matching principle,it is generally not accepted in preparing financial statements.