ACC 311 Exam 1-Austin Test
Questions and Actual Detailed
Answers (2025-2026) Updated.
Accounting Equation - Answer Assets = Liabilities + Stockholders' Equity
For Sony TV Company, sale of Land owned by them is: - Answer sale of an asset that may result
in gain/loss
Material received by manufacturers and not paid for leads to: - Answer a payable
The Income Statement accounts should be closed at ________ - Answer the end of the year
True or False: A collection related to a credit sale, that is received subsequently, leads to an
increase in Assets. - Answer False
A payment made in advance of incurring an expense is: - Answer an asset
What is the correct sequence of Accounting for transactions in a period? - Answer 1) Record
Journal Entries
2) Post JEs to T-accounts
3) Calculate Ending balance and total for accounts
4) Prepare Trial Balance
True or False: Rental income received in advance is a Liability. - Answer True
Net Income _____ and Dividends paid _______ Retained Earnings. - Answer increases;
decreases
True or False: Total expense for a period can include cash paid and a liability - Answer True
Under accrual accounting, expenses are recorded when: - Answer incurred
, Gross Profit Forumla - Answer Gross Profit = Total Revenue - Cost of Goods Sold
Retained Earnings Equation - Answer Beginning Retained Earnings + Net Income - Dividends =
Ending Retained Earnings
Income Measurement - Answer Net Income = Revenues - Expenses
Accrual Accounting - Answer records revenue when earned and expenses when INCURRED
Revenue Recognition Principle - Answer revenues are recognized when the company transfers
promised goods or services to customers in the amount it expects to be entitled to receive
Expense Recognition Principle - Answer requires that costs incurred to generate revenues be
recognized in the same period
Dual Effects - Answer every transaction has at least two effects on the accounting equation
What is on the left side of the T-account? - Answer Debit
What is on the right side of the T-account? - Answer Credit
True or False: When a revenue or expense is recorded, either an asset or liability will be
affected. - Answer True
Operating Cycle - Answer the time it takes for a company to pay cash to suppliers, sell goods
and services to customers, and collect cash from customers
Time Period Assumption - Answer assumes that the long life of a company can be reported in
shorter time periods
Unearned Revenue - Answer the liability created by receiving revenue in advance
Expenditure - Answer any outflow of cash for any purpose
Questions and Actual Detailed
Answers (2025-2026) Updated.
Accounting Equation - Answer Assets = Liabilities + Stockholders' Equity
For Sony TV Company, sale of Land owned by them is: - Answer sale of an asset that may result
in gain/loss
Material received by manufacturers and not paid for leads to: - Answer a payable
The Income Statement accounts should be closed at ________ - Answer the end of the year
True or False: A collection related to a credit sale, that is received subsequently, leads to an
increase in Assets. - Answer False
A payment made in advance of incurring an expense is: - Answer an asset
What is the correct sequence of Accounting for transactions in a period? - Answer 1) Record
Journal Entries
2) Post JEs to T-accounts
3) Calculate Ending balance and total for accounts
4) Prepare Trial Balance
True or False: Rental income received in advance is a Liability. - Answer True
Net Income _____ and Dividends paid _______ Retained Earnings. - Answer increases;
decreases
True or False: Total expense for a period can include cash paid and a liability - Answer True
Under accrual accounting, expenses are recorded when: - Answer incurred
, Gross Profit Forumla - Answer Gross Profit = Total Revenue - Cost of Goods Sold
Retained Earnings Equation - Answer Beginning Retained Earnings + Net Income - Dividends =
Ending Retained Earnings
Income Measurement - Answer Net Income = Revenues - Expenses
Accrual Accounting - Answer records revenue when earned and expenses when INCURRED
Revenue Recognition Principle - Answer revenues are recognized when the company transfers
promised goods or services to customers in the amount it expects to be entitled to receive
Expense Recognition Principle - Answer requires that costs incurred to generate revenues be
recognized in the same period
Dual Effects - Answer every transaction has at least two effects on the accounting equation
What is on the left side of the T-account? - Answer Debit
What is on the right side of the T-account? - Answer Credit
True or False: When a revenue or expense is recorded, either an asset or liability will be
affected. - Answer True
Operating Cycle - Answer the time it takes for a company to pay cash to suppliers, sell goods
and services to customers, and collect cash from customers
Time Period Assumption - Answer assumes that the long life of a company can be reported in
shorter time periods
Unearned Revenue - Answer the liability created by receiving revenue in advance
Expenditure - Answer any outflow of cash for any purpose
