1. Cougar Corp rents out office space in a commercial building and pays rent in advance at the beginning of each year. When Cougar Corp makes the end-of-period adjusting entry to the "prepaid rent" account:
The prepaid rent account is credited
The prepaid rent account is debited
An expense account is credited
Cougar Corp is following the revenue recognition principle
2)
If a company fails to record an adjusting entry for accrued revenue in a given year, then:
Stockholders' equity is overstated and liabilities are understated
Stockholders equity and assets are both overstated
Stockholders' equity is understated and liabilities are overstated.
Stockholders' equity and assets are both understated
None of the above
3)
If a company fails to record an adjusting entry for accrued interest expense in a given year, then:
Stockholders' equity is overstated and liabilities are understated.
Stockholders' equity and assets are both overstated.
Stockholders' equity is understated and liabilities are overstated.
Stockholders' equity and assets are both understated.
None of the above
1. Cougar Corp rents out office space in a commercial building and pays rent in advance at the beginning of each year. When Cougar Corp makes the end-of-period adjusting entry to the "prepaid rent" account:
The prepaid rent account is credited
The prepaid rent account is debited
An expense account is credited
Cougar Corp is following the revenue recognition principle
2)
If a company fails to record an adjusting entry for accrued revenue in a given year, then:
| Stockholders' equity is overstated and liabilities are understated | |||||||||||||||||
| Stockholders equity and assets are both overstated | |||||||||||||||||
| Stockholders' equity is understated and liabilities are overstated. | |||||||||||||||||
| Stockholders' equity and assets are both understated | |||||||||||||||||
| None of the above 3) If a company fails to record an adjusting entry for accrued interest expense in a given year, then:
|
Related questions
QUESTION 6
Which of the following statements is not true regarding prepaidexpenses?
Prepaid expenses represent assets. | ||
Prepaid expenses are shown in a special section of the incomestatement. | ||
Prepaid expenses become expenses only as goods or services areused up. | ||
Prepaid expenses appear in the balance sheet. |
4 points
QUESTION 7
The balance of an unearned revenue account:
Appears in the balance sheet as a component of stockholders'equity. | ||
Appears in the income statement along with other revenueaccounts. | ||
Appears in a separate section of the income statement forrevenue not yet earned. | ||
Appears in the liability section of the balance sheet. |
4 points
QUESTION 8
As of January 31, Hudson Corporation owes $600 to U-Rent-It forequipment used during January. If no adjustment is made for thisitem at January 31, how will Hudson's financial statements beaffected?
Cash will be overstated at January 31. | ||
Net income for January will be overstated. | ||
Stockholders' equity will be understated. | ||
The financial statements will be accurate since the $600 doesnot have to be paid yet. |
4 points
QUESTION 9
The accountant for the Linville Company forgot to make anadjusting entry to record revenue earned but not yet billed tocustomers. The effect of this error is:
An overstatement of assets. | ||
An overstatement of stockholders' equity. | ||
Understatement of both assets and stockholders' equity | ||
Overstatement of both assets and stockholders' equity. |
4 points
QUESTION 10
An adjusting entry involving recognition of unrecorded revenueis necessary at the end of March in which of the followingsituations?
Financial Consultants received payment in February forconsulting services rendered in March. | ||
Financial Consultants began working for a client on March 15;bills will be sent monthly beginning April 15. | ||
Financial Consultants made payment in January for office rentfor the first three months of the year. | ||
On March 31, a major customer paid his bill for a consulting jobcompleted in February. |
4 points
QUESTION 11
Which of the following entries causes an immediate decrease inassets and in stockholders' equity?
The entry to record depreciation expense. | ||
The entry to record revenue earned but not yet received. | ||
The entry to record the earned portion of rent received inadvance. | ||
The entry to record accrued wages payable. |
4 points
QUESTION 12
The CPA firm auditing Greer Company found that net income hadbeen overstated. Which of the following errors could be thecause?
Failure to record depreciation expense for the period. | ||
No entry made to record purchase of land for cash on the lastday of the year. | ||
Failure to record payment of an account payable on the last dayof the year. | ||
Failure to make an adjusting entry to record revenue which hadbeen earned but not yet billed to customers. |
Bach Instruments had total assets of $560,000; total liabilities of $250,000; and total Stockholders' Equity of $310,000. Bach's debt ratio is
| 44.6%. | |||||||||
| 28.7%. | |||||||||
| 80.6%. | |||||||||
| 55.4%. The entry to record selling 300 shares of stated value $60 common stock for $70 per share would be
|
The Statement of Cash Flows reports the sources and uses of cash from all of the following EXCEPT
| financing activities. | |||||||||||||||||||||||||||||||||
| managerial activities. | |||||||||||||||||||||||||||||||||
| operating activities. On the Income Statement, the results of discontinued operations are reported
| |||||||||||||||||||||||||||||||||
| investing activities. What was the percentage of change in Accounts Receivable if the balance was $80,000 in 2013 and $60,000 in 2014?
In accounting, what is the meaning of capitalized?
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