8/11/26, 12:00 PM Accounting 3110 Exam: Study Terms & Definitions Flashcards | Quizlet
During February, assets increased by $88,000 and liabilities increased by $27,000.
Stockholders' equity must have
increased by $61,000
88,000-27,000=61,000
Carey Corporation received a four-month 5%, $6,000 note receivable on March 1. The
Adjusting entry on March 31 will include:
A credit to Interest Revenue for $25
6,000 x 0.05 = 300
300(1/12) = 25
If the adjusting entry to accrue interest on a note receivable is omitted, then:
Assets, net income, and stockholders' equity are understated
A journal entry would need to be made for which of the following adjustments on a
bank reconciliation?
Bank service charges
In a bank reconciliation, an outstanding check is:
Deducted from the bank balance
If a bank reconciliation included a deposit in transit of$790, the entry to record this
reconciling item would include a
no entry required
Which statement is true?
Gross profit is the excess of sales revenue over cost of goods sold
In a period of rising prices
gross profit under FIFO will be higher than under LIFO
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, 8/11/26, 12:00 PM Accounting 3110 Exam: Study Terms & Definitions Flashcards | Quizlet
During a period of rising prices, the inventory method that will yield the highest net
income and asset value is
FIFO
Why would a business select an accelerated method of depreciation for tax
purposes?
Accelerated depreciation generates higher depreciation expense immediately, and
therefore lowers tax payments in the early years of the asset's life
The purchase of new equipment with cash would appear on the statement of cash
flows asa/an:
Investing cash flow
Nicholas Corporation accrues the interest expense on ashort-term note payable at
the end of its fiscal year. Due to this transaction
Current liabilities will increase and stockholders' equity will decrease
Phoebe Corporation signed a six-month note payable on October 23, 2018. What
accounts relating to the note payable will be reported on its financial statements for
the fiscal year ending December 31, 2018?
Notes payable and interest payable will be reported on the balance sheet
Failure to accrue interest expense results in
an overstatement of net income and an understatement of liabilities
Gravel Corporation borrowed $250,000 from a bank on January1, 2019, by signing a
10%, six-month note. The journal entry made by Gravel on January1, 2019, will debit
Cash for $250,000 and credit Notes Payable for $250,000
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During February, assets increased by $88,000 and liabilities increased by $27,000.
Stockholders' equity must have
increased by $61,000
88,000-27,000=61,000
Carey Corporation received a four-month 5%, $6,000 note receivable on March 1. The
Adjusting entry on March 31 will include:
A credit to Interest Revenue for $25
6,000 x 0.05 = 300
300(1/12) = 25
If the adjusting entry to accrue interest on a note receivable is omitted, then:
Assets, net income, and stockholders' equity are understated
A journal entry would need to be made for which of the following adjustments on a
bank reconciliation?
Bank service charges
In a bank reconciliation, an outstanding check is:
Deducted from the bank balance
If a bank reconciliation included a deposit in transit of$790, the entry to record this
reconciling item would include a
no entry required
Which statement is true?
Gross profit is the excess of sales revenue over cost of goods sold
In a period of rising prices
gross profit under FIFO will be higher than under LIFO
https://quizlet.com/892287334/accounting-3110-entrance-exam-practice-flash-cards/ 2/12
, 8/11/26, 12:00 PM Accounting 3110 Exam: Study Terms & Definitions Flashcards | Quizlet
During a period of rising prices, the inventory method that will yield the highest net
income and asset value is
FIFO
Why would a business select an accelerated method of depreciation for tax
purposes?
Accelerated depreciation generates higher depreciation expense immediately, and
therefore lowers tax payments in the early years of the asset's life
The purchase of new equipment with cash would appear on the statement of cash
flows asa/an:
Investing cash flow
Nicholas Corporation accrues the interest expense on ashort-term note payable at
the end of its fiscal year. Due to this transaction
Current liabilities will increase and stockholders' equity will decrease
Phoebe Corporation signed a six-month note payable on October 23, 2018. What
accounts relating to the note payable will be reported on its financial statements for
the fiscal year ending December 31, 2018?
Notes payable and interest payable will be reported on the balance sheet
Failure to accrue interest expense results in
an overstatement of net income and an understatement of liabilities
Gravel Corporation borrowed $250,000 from a bank on January1, 2019, by signing a
10%, six-month note. The journal entry made by Gravel on January1, 2019, will debit
Cash for $250,000 and credit Notes Payable for $250,000
https://quizlet.com/892287334/accounting-3110-entrance-exam-practice-flash-cards/ 3/12
