ADM 1340 Chapter Notes - Chapter 4: Accrual
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12. For the purpose of government-wide financial statements, thecost of cleaning up a government-owned landfill and closing thelandfill
A) Is not recognized until the costs are actually incurred
B) Is accrued and amortized over the expected useful life of thelandfill
C) Is accrued on a pro-rated basis each period based on how fullthe landfill is
D) Is accrued in full at the time the costs become estimable
E) Is treated as an encumbrance at the time it become estimable andas an expenditure when it is actually paid
13. Drye Township has received adonation of a rare painting worth $1,000,000. For Drye'sgovernment-wide financial statements, three criteria must be metbefore Drye can opt not to recognize the painting as an asset.Which of the following is not one of the three criteria?(1.) Thepainting is held for public exhibition, education, or research infurtherance of public service, rather than financial gain.(2.) Thepainting is scheduled to be sold immediately at auction.(3.) Thepainting is protected, kept unencumbered, cared for, andpreserved.
A) Item 1 is not one of the three criteria
B) Item 2 is not one of the three criteria
C) Item 3 is not one of the three criteria
D) All three items are required criteria
E) None of the three items are required criteria
14. Which of the following is nota criterion of a capital lease?
A) The lease transfers ownership of the property to the lesseeby the end of the lease term
B) The present value of the minimum lease payments equals orexceeds 90 percent of the fair value of the leased property, net oflessor's investment tax credit
C) The lease contains an option to purchase the leased property ata bargain price
D) The lease contains an option to renew
E) The lease term is equal to or greater than 75 percent of theestimated economic life of the leased property
15. Which statement is falseregarding the government-wide Statement of Net Assets?
A) The purpose of the Statement of Net Assets is to report theeconomic resources of the government as a whole
B) Assets are reported excluding capital assets
C) Capital assets are reported net of depreciation
D) Investments are reported at fair value rather than historicalcost
E) Business-type activities include Enterprise Funds
16. Which statement is falseregarding the Balance Sheet for Fund-Based Statements?
A) The Balance Sheet for Fund-Based Statements measures onlycurrent financial resources of the governmental entity
B) The Balance Sheet for Fund-Based Statements uses the modifiedaccrual method for timing purposes
C) Capital assets are not reported on the Balance Sheet forFund-Based Statements
D) The Balance Sheet for Fund-Based Statements measures onlylong-term financial resources of the governmental entity
E) Long-term debts are not reported on the Balance Sheet forFund-Based Statements
17. The city operates a publicpool where each person is assessed a $2 entrance fee. Which fund ismost appropriate to record these revenues?
A) General Fund
B) Enterprise Fund
C) Special Revenue Fund
D) Internal Service Fund
E) Capital Projects Fund
18. Which of the following typesof health care organizations follow FASB Accounting StandardsCodification for GAAP?
Investor-Owned Health Care Enterprises | Not-for-Profit Organizations | Governmental Health Care Organizations | |
A) | Yes | Yes | No |
B) | Yes | Yes | Yes |
C) | No | No | Yes |
D) | Yes | No | Yes |
E) | Yes | No | No |
A) Entry A
B) Entry B
C) Entry C
D) Entry D
E) Entry E
19. In accruing patient chargesfor the current month, which one of the following accounts should ahospital credit?
A) Accounts Payable
B) Deferred Revenue
C) Unearned Revenue
D) Patient Service Revenues
E) Accounts Receivable
20. Which account would becredited in recording a gift of medicine to a nursing home from anoutside party?
A) Nonoperating Gain - Contributions
B) Contractual Adjustments
C) Patient Service Revenues
D) Drugs and Medicines
E) Nonoperating Revenues - Contribution
21. Unconditional transfers ofcash or other resources to an entity in a voluntary nonreciprocaltransaction is the GAAP definition for
A) miscellaneous revenues
B) contributions
C) unconditional promises to give
D) exchange transactions
E) pledges
22. On a statement of functionalexpenses for a voluntary health and welfare organization, how areexpenses classified?
A) Health services expenses and operating expenses
B) Program services expenses and administrative servicesexpenses
C) Program services expenses and supporting services expenses
D) Operating expenses and supporting services expenses
E) Operating expenses and administrative expenses
NEED ASAP PLEASE
Question 1
Which one of the following is not an externaluser of accounting information?
Customers | ||
Investors | ||
Regulatory agencies | ||
All of these are external users |
3 points
Question 2
The first step in solving an ethical dilemma is to
identify and analyze the principal elements in thesituation. | ||
identify the alternatives. | ||
recognize an ethical situation and the ethical issuesinvolved. | ||
weigh the impact of each alternative on variousstakeholders. |
3 points
Question 3
Generally accepted accounting principles are
income tax regulations of the Internal Revenue Service. | ||
standards that indicate how to report economic events. | ||
theories that are based on physical laws of the universe. | ||
principles that have been proven correct by academicresearchers. |
3 points
Question 4
Which of the following events is not a businesstransaction?
Issuance of stock in exchange for cash. | ||
Hired employees. | ||
Incurred utility expenses for the month. | ||
Earned revenue for services provided. |
3 points
Question 5
When assets are distributed to the owners of a corporation,these distributions are termed
depletions. | ||
consumptions. | ||
dividends. | ||
a credit line. |
3 points
Question 6
If total liabilities increased by $8,000, then
assets must have decreased by $8,000. | ||
stockholders' equity must have increased by $8,000. | ||
assets must have increased by $8,000, or stockholders' equitymust have decreased by $8,000. | ||
assets and stockholders' equity each increased by $4,000. |
3 points
Question 7
If total liabilities increased by $30,000 and stockholders'equity increased by $20,000 during a period of time, then totalassets must change by what amount and direction during that sameperiod?
$50,000 decrease | ||
$10,000 decrease | ||
$10,000 increase | ||
$50,000 increase |
3 points
Question 8
Misra Company compiled the following financial information as ofDecember 31:
Revenues | $ 340,000 |
Retained Earnings, Beginning | $ 60,000 |
Equipment | $ 80,000 |
Expenses | $ 250,000 |
Cash | $ 90,000 |
Dividends | $ 20,000 |
Supplies | $ 10,000 |
Accounts payable | $ 40,000 |
Accounts receivable | $ 70,000 |
Common Stock | $ 80,000 |
Misra's assets on December 31 are
$180,000. | ||
$250,000. | ||
$360,000. | ||
$ 490,000. |
3 points
Question 9
Mofro's Computer Repair Shop started the year with total assetsof $300,000 and total liabilities of $200,000. During the year, thebusiness recorded $500,000 in computer repair revenues, $300,000 inexpenses, and Mofro paid dividends of $50,000. Stockholders' equityat the end of the year was
$200,000. | ||
$100,000. | ||
$250,000. | ||
$300,000. |
3 points
Question 10
A balance sheet shows
assets, liabilities, and stockholders' equity. | ||
expenses, dividends, and stockholders' equity. | ||
revenues, expenses, and dividends. | ||
revenues, liabilities, and stockholders' equity. |
3 points
Question 11
At September 1, Foli Co. reported retained earnings of $136,000.During the month, Foli generated revenues of $20,000, incurredexpenses of $12,000, purchased equipment for $5,000 and paiddividends of $2,000. What is the amount of retained earnings atSeptember 30?
$136,000 | ||
$142,000 | ||
$8,000 | ||
$137,000 |
3 points
Question 12
Grayton Industries purchased supplies for $1,000. The Companypaid $500 in cash and agreed to pay the balance in 30 days. Thejournal entry to record this transaction would include a debit toan asset account for $1,000, a credit to a liability account for$500. Which of the following would be the correct way to completethe recording of the transaction?
Credit an asset account for $500. | ||
Credit the Retained Earnings account for $500. | ||
Credit another liability account for $500. | ||
Debit the Retained Earnings account for $500. |
3 points
Question 13
Radio Moscow Industries purchased supplies for $1,000. They paid$400 in cash and agreed to pay the balance in 30 days. The journalentry to record this transaction would include a debit to an assetaccount for $1,000, a credit to a liability account for $600. Whichof the following would be the correct way to complete the recordingof the transaction?
Credit an asset account for $400. | ||
Credit another liability account for $400. | ||
Credit the retained earnings account for $400. | ||
Debit the retained earnings account for $400. |
3 points
Question 14
A credit to a liability account
must be accompanied by a debit to an asset account. | ||
indicates an increase in the amount owed to creditors. | ||
is an error. | ||
indicates a decrease in the amount owed to creditors. |
3 points
Question 15
In recording business transactions, evidence that an accountingtransaction has taken place is obtained from
business documents. | ||
the Internal Revenue Service. | ||
the public relations department. | ||
the SEC. |
3 points
Question 16
On June 1, Leno Inc. buys a copier machine for her business andfinances this purchase with cash and a note. When journalizing thistransaction, the company's accountant will
make a simple entry. | ||
use two journal entries. | ||
make a compound entry. | ||
list the credit entries first, which is proper form for thistype of transaction. |
3 points
Question 17
A three column form of account is so named because it hascolumns for
debit, credit, and balance. | ||
debit, credit, and date. | ||
debit, credit, and account name. | ||
debit, credit, and reference. |
3 points
Question 18
The first step in designing a computerized accounting system isthe creation of the
general ledger. | ||
general journal. | ||
trial balance. | ||
chart of accounts. |
3 points
Question 19
Chik Chik Company showed the following balances at the end ofits first year:
Cash | $ 6,000 |
Prepaid insurance | $ 9,400 |
Accounts receivable | $ 7,000 |
Accounts payable | $ 5,600 |
Notes payable | $ 8,400 |
Common stock | $ 2,800 |
Dividends | $ 1,400 |
Revenues | $ 44,000 |
Expenses | $ 35,000 |
What did Chik Chik Company show as total credits on its trialbalance?
$51,400 | ||
$60,800 | ||
$62,200 | ||
$70,200 |
3 points
Question 20
Which of the following time periods would notbe referred to as an interim period?
Monthly | ||
Quarterly | ||
Semi-annually | ||
Annually |