Quiz-Ch12-Review

Accrued expenses are:

• used in the current period but are not yet paid and are not yet recorded in the accounting records

• paid for, recorded, and used in one period.

• paid for and recorded in one period but not fully used until a later period.

• budgeted but not paid for or used during the period.

On July 1, 20X1, a firm purchased equipment for $9,300. Depreciation expense for the year ended December 31, 20X1, given the straight-line method, a 6-year useful life, and a salvage value of $300, is:

• $750.

• $775.

• $1,500.

• $1,550.

Allowance for Doubtful Accounts is:

• deducted from Sales in the Revenue section of the income statement.

• listed in the Liabilities section of the balance sheet.

• subtracted from Accounts Receivable in the Assets section of the balance sheet.

• listed in the Liabilities section of the balance sheet.

Which of the following statements regarding the accrual basis of accounting is accurate?

• Revenue is recognized when earned, while expenses are recognized when cash is paid

• Revenue is recognized when earned, while expenses are recognized when incurred

• Revenue is recognized when cash is received, while expenses are recognized when cash is paid

• Revenue is recognized when cash is received, while expenses are recognized when incurred

On October 1, 20X1, Fairbanks Company accepted from a customer a four-month, 15 percent note for $1,000. As of December 31, 20X1, the adjusting entry to record the accrued interest on the note receivable would include a debit to Interest Receivable for:

• $37.50.

• $333.33.

• $1,000.

• $1,250.

The Notes Payable account appears on the worksheet in the:

• Credit column of the Balance Sheet section.

• Debit column of the Balance Sheet section.

• Credit column of the Income Statement section.

• Debit column of the Income Statement section.

The amount of net income appears on the worksheet in the:

• Credit column of the Adjusted Trial Balance section.

• Debit column of the Balance Sheet section.

• Credit column of the Income Statement section.

• Debit column of the Income Statement section.

A company failed to record depreciation expense. Which of the following is not true?

• a. The company's net income will be overstated.

• b. The company's total assets will be overstated.

• c. The owner's equity will be overstated.

• d. The company's total liabilities will be overstated.

The adjusting entry to record depreciation expense for a recently-purchased piece of equipment would include a:

• debit to the Depreciation Expense - Equipment account and a credit to the Allowance for Doubtful Accounts account.

• debit to the Accumulated Depreciation - Equipment account and a credit to the Depreciation Expense – Equipment account.

• debit to the Depreciation Expense - Equipment account and a credit to the Accumulated Depreciation – Equipment account.

• debit to the Allowance for Doubtful Accounts account and a credit to the Depreciation Expense – Equipment account.

The Sales account will appear in which of the following in the worksheet?

• Income Statement Debit column

• Balance Sheet Debit column

• Income Statement Credit column

• Balance Sheet Credit column