Classroom Response System Questions

1
Classroom Response System Questions

• to accompany
• Needles/Powers, Financial Accounting, Ninth
  Edition
• CHAPTER 3

2
Instructor Notes

• all content comes from Study Guide and Test Bank
• notes page view displays exact source of
  content

3
Question 1

• A business can choose a fiscal year that
  corresponds to
• the calendar year.
• the yearly business cycle.
• any 12-month period.
• any of the above.

4
Question 1

• A business can choose a fiscal year that
  corresponds to
• the calendar year.
• the yearly business cycle.
• any 12-month period.
• any of the above. Correct Answer

5
Question 2

• Expired costs are listed on the income statement.
  
• T
• F

6
Question 2

• Expired costs are listed on the income statement.
  
• T Correct Answer
• F

7
Question 3

• A calendar year refers to any 12-month period.
• T
• F

8
Question 3

• A calendar year refers to any 12-month period.
• T
• F Correct Answer

9
Question 4

• The cash basis of accounting often violates the
  matching rule.
• T
• F

10
Question 4

• The cash basis of accounting often violates the
  matching rule.
• T Correct Answer
• F

11
Question 5

• Earnings management refers to the efforts put
  forth to produce as accurate a net income figure
  as possible.
• T
• F

12
Question 5

• Earnings management refers to the efforts put
  forth to produce as accurate a net income figure
  as possible.
• T
• F Correct Answer
• Hint Earnings management refers to the unethical
  manipulation of income.

13
Question 6

• Accrual accounting involves all of the following
  except
• recording all revenues when cash is received.
• applying the matching rule.
• recognizing expenses when incurred.
• adjusting the accounts.

14
Question 6

• Accrual accounting involves all of the following
  except
• recording all revenues when cash is received.
  Correct Answer
• applying the matching rule.
• recognizing expenses when incurred.
• adjusting the accounts.

15
Question 7

• Which of the following accounts probably would
  need to be adjusted at year end?
• Notes Payable
• Supplies
• Land
• Dividends

16
Question 7

• Which of the following accounts probably would
  need to be adjusted at year end?
• Notes Payable
• Supplies
• Land Correct Answer
• Dividends

17
Question 8

• Which of the following accounts is an example of
  a contra account?
• Unearned Art Fees
• Depreciation Expense, Buildings
• Prepaid Insurance
• Accumulated Depreciation, Office Equipment

18
Question 8

• Which of the following accounts is an example of
  a contra account?
• Unearned Art Fees
• Depreciation Expense, Buildings
• Prepaid Insurance
• Accumulated Depreciation, Office Equipment
  Correct Answer

19
Question 9

• Which of the following accounts could increase as
  a result of adjusting entries?
• Prepaid Insurance
• Accounts Receivable
• Unearned Fees
• Office Equipment

20
Question 9

• Which of the following accounts could increase as
  a result of adjusting entries?
• Prepaid Insurance
• Accounts Receivable Correct Answer
• Unearned Fees
• Office Equipment

21
Question 10

• Which of the following items is an example of a
  deferral?
• Accruing year-end wages
• Recognizing revenues earned but not yet recorded
• Recording prepaid rent
• Recognizing expenses incurred but not yet
  recorded

22
Question 10

• Which of the following items is an example of a
  deferral?
• Accruing year-end wages
• Recognizing revenues earned but not yet recorded
• Recording prepaid rent Correct Answer
• Recognizing expenses incurred but not yet
  recorded

23
Question 11

• Which of the following accounts could decrease as
  a result of adjusting entries?
• Office Supplies
• Accumulated Depreciation-Buildings
• Wages Expense
• Revenue from Services

24
Question 11

• Which of the following accounts could decrease as
  a result of adjusting entries?
• Office Supplies Correct Answer
• Accumulated Depreciation-Buildings
• Wages Expense
• Revenue from Services

25
Question 12

• An adjusting entry would not include which of the
  following accounts?
• Income Taxes Payable
• Unearned Revenue
• Interest Receivable
• Cash

26
Question 12

• An adjusting entry would not include which of the
  following accounts?
• Income Taxes Payable
• Unearned Revenue
• Interest Receivable
• Cash Correct Answer

27
Question 13

• Which of the following accounts would probably be
  contained in an adjusted trial balance but not in
  a trial balance?
• Unearned Revenue
• Cash
• Depreciation Expense
• Utilities Expense

28
Question 13

• Which of the following accounts would probably be
  contained in an adjusted trial balance but not in
  a trial balance?
• Unearned Revenue
• Cash
• Depreciation Expense Correct Answer
• Utilities Expense

29
Question 14

• Adjusting entries must be made immediately after
  the financial statements have been prepared.
• T
• F

30
Question 14

• Adjusting entries must be made immediately after
  the financial statements have been prepared.
• T
• F Correct Answer
• Hint Adjusting entries are made before the
  financial statements are prepared.

31
Question 15

• The adjusted trial balance is the same as the
  trial balance, except that it has been modified
  by adjusting entries.
• T
• F

32
Question 15

• The adjusted trial balance is the same as the
  trial balance, except that it has been modified
  by adjusting entries.
• T Correct Answer
• F

33
Question 16

• Which of the following would not appear in an
  adjusted trial balance?
• Prepaid Insurance
• Unearned Management Fees
• Net Income
• Depreciation Expense

34
Question 16

• Which of the following would not appear in an
  adjusted trial balance?
• Prepaid Insurance
• Unearned Management Fees
• Net Income Correct Answer
• Depreciation Expense
• Hint Net income is the result of the calculation
  that nets revenues and expenses. The adjusted
  trial balance contains summary balances of each
  general ledger account after adjusting entries
  have been made.

35
Question 17

• Which of the following accounts would appear in a
  post-closing trial balance?
• Interest Income
• Income Summary
• Retained Earnings
• Dividends

36
Question 17

• Which of the following accounts would appear in a
  post-closing trial balance?
• Interest Income
• Income Summary
• Retained Earnings Correct Answer
• Dividends

37
Question 18

• One important purpose of closing entries is to
• update the accounting records.
• set balance sheet accounts to zero to begin the
  next accounting period.
• set nominal accounts to zero to begin the next
  accounting period.
• close the Retained Earnings account.

38
Question 18

• One important purpose of closing entries is to
• update the accounting records.
• set balance sheet accounts to zero to begin the
  next accounting period.
• set nominal accounts to zero to begin the next
  accounting period. Correct Answer
• close the Retained Earnings account.

39
Question 19

• Which of the following sequences of actions
  describes the sequence of the accounting cycle?
• Post, record, analyze, prepare, close, adjust
• Analyze, record, post, adjust, prepare, close
• Prepare, record, post, adjust, analyze, close
• Enter, record, close, prepare, adjust, analyze

40
Question 19

• Which of the following sequences of actions
  describes the sequence of the accounting cycle?
• Post, record, analyze, prepare, close, adjust
• Analyze, record, post, adjust, prepare, close
  Correct Answer
• Prepare, record, post, adjust, analyze, close
• Enter, record, close, prepare, adjust, analyze

41
Question 20

• The Income Summary account appears in the
  statement of retained earnings.
• T
• F

42
Question 20

• The Income Summary account appears in the
  statement of retained earnings.
• T
• F Correct Answer
• Hint Income Summary does not appear on any
  financial statement.

43
Question 21

• Closing entries convert real and nominal accounts
  to zero balances.
• T
• F

44
Question 21

• Closing entries convert real and nominal accounts
  to zero balances.
• T
• F Correct Answer
• Hint Only nominal accounts are closed.

45
Question 22

• Which of the following accounts would not be
  involved in closing entries?
• Unearned Commissions
• Retained Earnings
• Telephone Expense
• Dividends

46
Question 22

• Which of the following accounts would not be
  involved in closing entries?
• Unearned Commissions Correct Answer
• Retained Earnings
• Telephone Expense
• Dividends

47
Question 23

• When a net loss has occurred,
• all expense accounts are closed with debits.
• the Income Summary account is closed with a
  credit.
• the Dividends account is closed with a debit.
• all revenue accounts are closed with credits.

48
Question 23

• When a net loss has occurred,
• all expense accounts are closed with debits.
• the Income Summary account is closed with a
  credit. Correct Answer
• the Dividends account is closed with a debit.
• all revenue accounts are closed with credits.

49
Question 24

• Which of the following is not an objective of
  closing entries?
• To transfer net income or loss to Retained
  Earnings
• To produce zero balances in all nominal accounts
• To update the revenue and expense accounts
• To be able to begin measuring income or loss for
  the following period

50
Question 24

• Which of the following is not an objective of
  closing entries?
• To transfer net income or loss to Retained
  Earnings
• To produce zero balances in all nominal accounts
• To update the revenue and expense accounts
  Correct Answer
• To be able to begin measuring income or loss for
  the following period

51
Question 25

• In the accounting cycle, which of the following
  is considered the output document or record?
• Financial Statements
• The ledger
• The journal
• Source documents

52
Question 25

• In the accounting cycle, which of the following
  is considered the output document or record?
• Financial Statements Correct Answer
• The ledger
• The journal
• Source documents

53
Question 26

• In the accounting cycle, closing entries are
  prepared before adjusting entries.
• T
• F

54
Question 26

• In the accounting cycle, closing entries are
  prepared before adjusting entries.
• T
• F Correct Answer

55
Question 27

• Closing entries must be recorded before financial
  statements can be prepared.
• T
• F

56
Question 27

• Closing entries must be recorded before financial
  statements can be prepared.
• T
• F Correct Answer

57
Question 28

• In the accounting cycle, information from source
  documents is initially recorded in the journal.
• T
• F

58
Question 28

• In the accounting cycle, information from source
  documents is initially recorded in the journal.
• T Correct Answer
• F

59
Question 29

• After all closing entries have been posted, which
  of the following accounts is most likely to have
  a nonzero balance?
• Income Summary
• Wages Payable
• Interest Expense
• Service Revenue

60
Question 29

• After all closing entries have been posted, which
  of the following accounts is most likely to have
  a nonzero balance?
• Income Summary
• Wages Payable Correct Answer
• Interest Expense
• Service Revenue