LSU ACCT 2000 - WileyPlus Questions and Review - Exam 2 with verified answers

LSU ACCT 2000 - WileyPlus Questions and Review - ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Exam 2 with verified answers ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




True or False: The revenue recognition principle dictates that revenue is recognized in the
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period in which the cash is received. - correct answer✔✔False; revenue should be
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recognized in the accounting period in which the performance obligation is satisfied. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




The generally accepted accounting principle which dictates that revenue be recognized in
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the accounting period in which the performance obligation is satisfied is the:
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A) expense recognition principle
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B) accrued revenues principle
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C) revenue recognition principle
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D) periodicity assumption - correct answer✔✔C) revenue recognition principle
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Which statement is correct? ||\\|//|| ||\\|//|| ||\\|//||




A) The use of the cash basis of accounting violates both the revenue recognition and
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expense recognition principles. ||\\|//|| ||\\|//||




B) The cash basis of accounting is objective because no one can be certain of the amount
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of revenue until the cash is received.
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C) As long as management is ethical, there are no problems with using the cash basis of
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accounting.

, D) As long as a company consistently uses the cash-basis of accounting, generally accepted
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accounting principles allow its used - correct answer✔✔A) The use of the cash basis of
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accounting violates both the revenue recognition and expense recognition principles. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




True or False: Book value is equal to cost minus accumulated depreciation. - correct
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answer✔✔True



Adjustments for unearned revenues: ||\\|//|| ||\\|//|| ||\\|//||




A) increase assets and increase revenues.
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B) decrease liabilities and increase revenues.
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C) decrease revenues and decrease assets.
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D) increase liabilities and increase revenues - correct answer✔✔B) decrease liabilities and
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increase revenues. ||\\|//||




At December 31, 2013, before any year-end adjustments, Macarty Company's Prepaid
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Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Insurance had expired. The adjusting entry for Insurance Expense for the year would be ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




A) $1,500 ||\\|//||




B) $2,700 ||\\|//||




C) $1,900 ||\\|//||




D) $1,200 - correct answer✔✔A) $1,500
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Which of the following is NOT a typical example of an accrued expense?
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A) Taxes ||\\|//||