ACC 101 Exams with answers graded
100%
The revenue recognition principle dictates that revenue is recognized in the period in which the cash
is received. T or F - ANS✅✅false
The generally accepted accounting principle which dictates that revenue be recognized in the
accounting period in which the performance obligation is satisfied is the: - ANS✅✅revenue
recognition principle
Which statement is correct?
a) The use of the cash-basis of accounting violates both the revenue recognition and expense
recognition principles.
b) As long as a company consistently uses the cash-basis of accounting, generally accepted
accounting principles allow its use.
c) The cash-basis of accounting is objective because no one can be certain of the amount of revenue
until the cash is received.
d) As long as management is ethical, there are no problems with using the cash-basis of accounting. -
ANS✅✅a) The use of the cash-basis of accounting violates both the revenue recognition and
expense recognition principles.
Book value is equal to cost minus accumulated depreciation. T or F - ANS✅✅true
Adjustments for unearned revenues:
a)decrease revenues and decrease assets.
b)increase liabilities and increase revenues.
, c)decrease liabilities and increase revenues.
d)increase assets and increase revenues. - ANS✅✅c) decrease liabilities and increase revenues
At December 31, 2017, before any year-end adjustments, Macarty Company's Prepaid Insurance
account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had
expired. The adjusted balance for Insurance Expense for the year would be: - ANS✅✅$1,500
Which of the following is not a typical example of an accrued expense? - ANS✅✅depreciation
At the end of the accounting period, all balance sheet accounts are closed out. T or F -
ANS✅✅false
The operating cycle of a merchandising company is ordinarily shorter than that of a service company.
T or F - ANS✅✅false
The operating cycle of a merchandising company is ordinarily ___________________ that of a
service firm. - ANS✅✅longer than
Jax Company uses a perpetual inventory system and on November 30 purchased merchandise for
which it must pay the shipping charges. Which of the following is one part of the required journal
entry when Jax pays the shipping charges of $200? - ANS✅✅a debit to inventory for $200
Sales Discounts is a contra asset account. T or F - ANS✅✅false
Which statement is true when recording the sale of goods for cash in a perpetual inventory system?
a) Only one journal entry is necessary. It will record the receipt of cash and sales revenue.
b) Only one journal entry is necessary. It will record cost of goods sold and reduce of inventory.
c) Two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to
record the cost of goods sold and to reduce inventory.
100%
The revenue recognition principle dictates that revenue is recognized in the period in which the cash
is received. T or F - ANS✅✅false
The generally accepted accounting principle which dictates that revenue be recognized in the
accounting period in which the performance obligation is satisfied is the: - ANS✅✅revenue
recognition principle
Which statement is correct?
a) The use of the cash-basis of accounting violates both the revenue recognition and expense
recognition principles.
b) As long as a company consistently uses the cash-basis of accounting, generally accepted
accounting principles allow its use.
c) The cash-basis of accounting is objective because no one can be certain of the amount of revenue
until the cash is received.
d) As long as management is ethical, there are no problems with using the cash-basis of accounting. -
ANS✅✅a) The use of the cash-basis of accounting violates both the revenue recognition and
expense recognition principles.
Book value is equal to cost minus accumulated depreciation. T or F - ANS✅✅true
Adjustments for unearned revenues:
a)decrease revenues and decrease assets.
b)increase liabilities and increase revenues.
, c)decrease liabilities and increase revenues.
d)increase assets and increase revenues. - ANS✅✅c) decrease liabilities and increase revenues
At December 31, 2017, before any year-end adjustments, Macarty Company's Prepaid Insurance
account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had
expired. The adjusted balance for Insurance Expense for the year would be: - ANS✅✅$1,500
Which of the following is not a typical example of an accrued expense? - ANS✅✅depreciation
At the end of the accounting period, all balance sheet accounts are closed out. T or F -
ANS✅✅false
The operating cycle of a merchandising company is ordinarily shorter than that of a service company.
T or F - ANS✅✅false
The operating cycle of a merchandising company is ordinarily ___________________ that of a
service firm. - ANS✅✅longer than
Jax Company uses a perpetual inventory system and on November 30 purchased merchandise for
which it must pay the shipping charges. Which of the following is one part of the required journal
entry when Jax pays the shipping charges of $200? - ANS✅✅a debit to inventory for $200
Sales Discounts is a contra asset account. T or F - ANS✅✅false
Which statement is true when recording the sale of goods for cash in a perpetual inventory system?
a) Only one journal entry is necessary. It will record the receipt of cash and sales revenue.
b) Only one journal entry is necessary. It will record cost of goods sold and reduce of inventory.
c) Two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to
record the cost of goods sold and to reduce inventory.
