Intermediate Accounting PreAssessment Questions with Answers, Exams of Accounting

Download Intermediate Accounting PreAssessment Questions with Answers and more Exams Accounting in PDF only on Docsity! Intermediate Accounting 1- D103: Units 2-4 Pre- Assessment Questions with Answers. Report a $3500 sale on account - Correct Answers Debit: Accounts Receivable $3500; Credit: Service Revenue $3500 Journalize depreciation for the equipment that is $5,000 - Correct Answers Debit: Depreciation Expense $5000; Credit: Accumulated- Depreciation Equipment $5000 Journalize the adjusting entry for an employer that owes $1300 for payroll on Jan 10, 2021, for the payroll period ending December 31, 2020. - Correct Answers Debit: Salaries and Wages Expense $1300; Credit: Salaries and Wages Payable $1300 Calculate and journalize the annual adjusting entry to be made after a six- month insurance policy was purchased on September 1, 2020, for $3,600. Period ending Dec 31.2020 - Correct Answers Debit: Insurance Expense $2400; Credit: Prepaid Insurance $2400 Sales Revenue - Correct Answers Sales-Income Statement Accounts Receivable - Correct Answers Sales-Income Statement Sales Discounts - Correct Answers Sales-Income Statement Sales Returns and Allowances - Correct Answers Sales-Income Statement (revenue section) Advertising Expense - Correct Answers Selling Expense-Income Statement Salaries-Sales - Correct Answers Selling Expense-Income Statement Travel & Entertainment for Sales Personnel - Correct Answers Selling Expense-Income Statement Insurance Expense - Correct Answers Administrative Expense-Income Statement Salaries-Officers - Correct Answers Administrative Expense-Income Statement Legal and Professional Services - Correct Answers Administrative Expense-Income Statement Rent Revenue - Correct Answers other revenues and gains-income statement Gain on sale of land - Correct Answers other revenues and gains- income statement Interest on bonds and notes - Correct Answers other expenses and losses-income statement Supplies Inventory - Correct Answers current asset-balance sheet Prepaid Insurance - Correct Answers current asset-balance sheet investments available for sale - Correct Answers current asset-balance sheet Equity Investment - Correct Answers long-term asset-balance sheet equipment - Correct Answers property, plant, and equipment-balance sheet cash - Correct Answers current asset-balance sheet Accumulated Depreciation - Equipment - Correct Answers property, plant, and equipment-balance sheet Trademark - Correct Answers intangible asset-balance sheet Accounts Payable - Correct Answers current liabilities-balance sheet predictive value - Correct Answers ingredient of relevance Confirmatory Value - Correct Answers ingredient of relevance Materiality - Correct Answers ingredient of relevance Completeness - Correct Answers ingredient of faithful representation Neutrality - Correct Answers ingredient of faithful representation Free from error - Correct Answers ingredient of faithful representation implies that a company can divide its economic activities time periods such as monthly, quarterly, or yearly. - Correct Answers periodicity assumption economic activity can be identified with a particular unit of accountability - Correct Answers economic entity assumption According to the revenue recognition principle, at which point should revenue be recognized? - Correct Answers When the performance obligation is satisfied What are the enhancing qualities of accounting information? - Correct Answers Comparability, Verifiability, Timeliness, and Understandability Which organization enforces appropriate accounting practices for publicly traded companies? - Correct Answers SEC Which ingredient supports faithful representation? - Correct Answers Completeness Deferrals - Correct Answers prepaid expenses and unearned revenues accruals - Correct Answers accrued revenues and accrued expenses an adjusting entry for prepaid expenses - Correct Answers debit expenses, credit assets an adjusting entry for unearned revenues - Correct Answers debit liability, credit revenue deferrals understate or overstate net income? - Correct Answers understate deferrals understate or overstate liabilities? - Correct Answers overstate deferrals understate or overstate stockholder's equity? - Correct Answers understate adjusting entry for accrued revenues - Correct Answers debit asset, credit revenue adjusting entry for accrued expenses - Correct Answers debit expense, credit liability accruals (blank) liabilities and interest expense - Correct Answers understate accruals (blank) net income and stockholders' equity - Correct Answers overstate The accounting period is the calendar year. Employees are paid every Friday for the five-day week ending on that day. Salaries amount to $4,000 per week. The accounting period ends on a Tuesday. Using the information given above, what is the necessary adjusting entry at December 31, 2020? - Correct Answers Debit Salaries & Wages Expense, Credit Salaries & Wages Payable; $1,600 Cost of Goods Sold, Salaries & Wages, Depreciation, Utilities, Interest, and Advertising are ALL - Correct Answers expenses Which approach does income reporting follow? - Correct Answers modified all-inclusive concept where companies record most items, including unusual or infrequent ones, as part of net income. In addition, companies are required to highlight these items in the financial statements so that users can better determine the long-run earning power of the company. merchandise inventory balance is used to calculate - Correct Answers the Cost of Goods (not a selling expense) net sales= - Correct Answers Gross Billings - Returns & Allowances - Discounts Gross Profit= - Correct Answers Net Sales - COGS A $280,000 write-down of equipment leased to others A $160,000 adjustment of accruals on long-term contracts A $240,000 write-off of obsolete inventory In its 2020 income statement, what amount should be reported as total unusual losses? - Correct Answers $680,000 (all of these are unusual or infrequent losses) Purchased supplies on account for $850 - Correct Answers debit supplies $850; credit accounts payable $850 accounts payable is a LIABILITY with a normal... - Correct Answers credit balance interest revenue - Correct Answers other revenues and gains- income statement Dividend Revenue - Correct Answers other revenues and gains-income statment The last item on the income statement is - Correct Answers net sales/losses Statement of Financial Position - Correct Answers balance sheet What is the correct order to present current assets? - Correct Answers Cash, accounts receivable, inventories, prepaid items (in order of liquidity) Are dividends on the balance sheet? - Correct Answers NO What is included in an owners' equity section reported in the balance sheet? - Correct Answers noncontrolling interest (Capital Stock, Additional Paid-in Capital, Retained Earnings, Accumulated Other Comprehensive