Acct 211 Study Guide Exam Questions
100% Well Answered.
Which of the following statements describes why accrual accounting better reflects a business's
performance? (Check all that apply.) - Answer *Revenues are always recorded in the period in which
they are earned.
*Comparability of financial statements is improved.
*Expenses are always recognized in the period in which they are incurred.
The expense recognition matching principle aims to record ___ in the same accounting period as the ___
that are earned as a result of those costs. This principle is a major part of the ___ process. - Answer
*expenses
*revenues
*adjusting
Place the steps in the adjusting process in the correct order in which they would be performed. - Answer
*determine what the current balance is
*determine what the balance should be
*make the adjusting entries
A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was
initially increased for the payment. The required adjusting journal entry on December 31 includes a:
(Check all that apply.) - Answer *debit to Insurance expense for $400.
*credit to Prepaid insurance for $400.
A calendar year-end reporting period is defined as a ( / 12) -month period which ends on___ -
Answer 12
December
On December 1, a company pays $3,600 for a 36-month insurance policy. After one month, accrual
accounting requires $ (100/3,600) of insurance expense be reported on the income statement ending
, December 31. However, if cash basis accounting is used, $ (100/3,600) of insurance expense would be
reported at the time of purchase. - Answer Blank 1: 100
Blank 2: 3,600
Which of the following statements describes the expense recognition (matching) principle? (Check all
that apply.) - Answer *Matching of expenses with revenues is a major part of the adjusting process.
*Expenses should be matched in the same accounting period as the revenues that are recognized as a
result of those expenses.
Describe the final step in the adjusting process. - Answer The final step is to create an adjusting journal
entry to get from step 1 to step 2.
A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was
increased for the payment. Demonstrate the required adjusting journal entry on Dec. 31 by selecting
from the choices below. - Answer Insurance expense would be debited for $300.
$800 of supplies were purchased at the beginning of the month and the Supplies account was increased.
As of the end of the period, $200 of supplies still remain. Which of the following is the correct adjusting
entry? - Answer Supplies expense would be debited for $600.
The revenue recognition principle states that revenue: - Answer should be recorded when goods or
services are provided to customers at an amount expected to be received
Which of the following accounts is considered a prepaid expense? - Answer Supplies
What is a plant asset? - Answer A plant asset refers to a long-term tangible asset used to produce and
sell products or services.
$1,000 of supplies were purchased at the beginning of the month. $300 were used during the month.
(The Supplies account was increased at the time of the initial purchase.) Demonstrate the required
adjusting journal entry by selecting from the choices below. (Check all that apply.) - Answer Supplies
would be credited for $300.
Supplies expense would be debited for $300.
100% Well Answered.
Which of the following statements describes why accrual accounting better reflects a business's
performance? (Check all that apply.) - Answer *Revenues are always recorded in the period in which
they are earned.
*Comparability of financial statements is improved.
*Expenses are always recognized in the period in which they are incurred.
The expense recognition matching principle aims to record ___ in the same accounting period as the ___
that are earned as a result of those costs. This principle is a major part of the ___ process. - Answer
*expenses
*revenues
*adjusting
Place the steps in the adjusting process in the correct order in which they would be performed. - Answer
*determine what the current balance is
*determine what the balance should be
*make the adjusting entries
A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was
initially increased for the payment. The required adjusting journal entry on December 31 includes a:
(Check all that apply.) - Answer *debit to Insurance expense for $400.
*credit to Prepaid insurance for $400.
A calendar year-end reporting period is defined as a ( / 12) -month period which ends on___ -
Answer 12
December
On December 1, a company pays $3,600 for a 36-month insurance policy. After one month, accrual
accounting requires $ (100/3,600) of insurance expense be reported on the income statement ending
, December 31. However, if cash basis accounting is used, $ (100/3,600) of insurance expense would be
reported at the time of purchase. - Answer Blank 1: 100
Blank 2: 3,600
Which of the following statements describes the expense recognition (matching) principle? (Check all
that apply.) - Answer *Matching of expenses with revenues is a major part of the adjusting process.
*Expenses should be matched in the same accounting period as the revenues that are recognized as a
result of those expenses.
Describe the final step in the adjusting process. - Answer The final step is to create an adjusting journal
entry to get from step 1 to step 2.
A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was
increased for the payment. Demonstrate the required adjusting journal entry on Dec. 31 by selecting
from the choices below. - Answer Insurance expense would be debited for $300.
$800 of supplies were purchased at the beginning of the month and the Supplies account was increased.
As of the end of the period, $200 of supplies still remain. Which of the following is the correct adjusting
entry? - Answer Supplies expense would be debited for $600.
The revenue recognition principle states that revenue: - Answer should be recorded when goods or
services are provided to customers at an amount expected to be received
Which of the following accounts is considered a prepaid expense? - Answer Supplies
What is a plant asset? - Answer A plant asset refers to a long-term tangible asset used to produce and
sell products or services.
$1,000 of supplies were purchased at the beginning of the month. $300 were used during the month.
(The Supplies account was increased at the time of the initial purchase.) Demonstrate the required
adjusting journal entry by selecting from the choices below. (Check all that apply.) - Answer Supplies
would be credited for $300.
Supplies expense would be debited for $300.
