Q1. The Statement of Retained Earnings is prepared using:
a. An Adjusted Trial Balance and Income Statement
b. And Income Statement
c. A Balance Sheet
d. An Income Statement and a Balance Sheet
Q2. Deferred revenue is that revenue is
a. earned but the cash has not been received
b. not earned but the cash has been received
c. not earned and the cash has not been received
d. earned and the cash has been received.
Q3. Adjusting entries are
a. rarely needed in large companies
b. the same as correcting entries
c. needed to bring accounts up to date and match revenue and expense
d. the same as correcting entries
Q4. Which of the following is considered to be unearned revenue?
a. theater tickets sold yesterday on credit for yesterday's performance
b. theater tickets sold for next month's performance
c. theater tickets that were not sold for the current performance
d. theater tickets sold last month for yesterday's performance
Q5. Which of the following is an example of accrued revenue?
a. snow removal services that have been provided but have not been billed or paid
b. snow removal services that has been provided and paid on the same day
c. an agreement that has been signed for snow removal services for the next three months
d. snow removal services that have been paid for three months in advance
Q6. Which one of the fixed asset accounts listed below will not have a related contra asset account?
a. Land
b. Buildings
c. Delivery Equipment
d. Office Equipment
Q7. The first item appearing on the statement of retained earnings is
a. the beginning balance of retained earnings
b. net income
c. dividends
d. Net increase of current year
8. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?
a. Fees Earned
b. Insurance Expense
c. Prepaid Insurance
d. Utilities Expense
9. Which of the following accounts ordinarily appears in the post-closing trial balance?
a. Supplies Expenses
b. Unearned Rent
c. Dividends
d. Fees Earned.
10. Which of the accounting steps in the accounting process below would be completed last?
a. posting to ledger
b. journalizing
c. preparing the financial statements
d. preparing the adjusted trial balance
11. When the terms of sale are FOB shipping point, who should ultimately pay the transportation charges?
a. Supplier
b. Seller
c. Shipping company
d. Buyer
12. Which of the following methods uses the oldest price of inventory first when assigning a value to our inventory?
a. FIFO
b. LIFO
c. Average cost
13. Merchandise inventory is classified on the balance sheet as a
a. current asset
b. current liability
c. it's not on the balance sheet
d. long-term liability
14. A new account on the multi-step income statement for a merchandiser uses which of the following as an expense when selling inventory?
a. wages expense
b. merchandise inventory
c. cost of goods sold
d. copyright
15. Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximately
a. 24%
b. 20%
c. 36%
d. 2%