Strayer ACC 556 Chapter 4 Quiz
The revenue recognition principle dictates that revenue be recognized in the accounting period in which the performance obligation is satisfied.
An adjusting entry to a prepaid expense is required to recognize expired expenses.
Unearned revenue is a prepayment that requires an adjusting entry when services are performed.
When closing entries are prepared, each income statement account is closed directly to retained earnings.
The accounting cycle begins with the journalizing of the transactions
Management usually wants ________ financial statements and the IRS requires all businesses to file _________ tax returns.
A flower shop makes a large sale for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows GAAP and applies the revenue recognition principle. When is the $1,000 considered to be recognized?
Which statement is correct?
Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting.
Cash received from customers $48,000
Accounts receivable 12,000
Cash paid for expenses 26,000
Accounts payable (related to expenses) 3,000
Prepaid rent for next period 7,000
Accrued expenses are:
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If a resource has been consumed but a bill has not been received at the end of the accounting period, then:
Depreciation is the process of:
If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month’s financial statements?
Why do generally accepted accounting principles require the application of the revenue recognition principle?
Which of the following would not result in unearned revenue?
Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause:
At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?
Can financial statements be prepared directly from the adjusted trial balance?
Which statement is correct concerning the adjusted trial balance?
Match the items below by entering the appropriate code letter in the space provided.