BRAINSCAPE1
IU A200 Exam 1 Exam with
complete solutions latest version
Harry Company uses janitorial supplies on a daily basis. Under the ACCRUAL basis of
accounting, these supplies should be an expense of the period in which they are... -
CORRECT ANSWER-used
Recording of periodic depreciation on assets such as buildings or trucks relates
primarily to - CORRECT ANSWER-the matching principle
An adjusting entry that decreases both assets and owner's equity at the end of the
accounting period is the entry to record - CORRECT ANSWER-depreciation
The two major divisions of stockholders' equity are - CORRECT ANSWER-contributed
capital and retained earnings
The adjustment to record the completion of services for which clients had paid in
advance would involve which of the following? - CORRECT ANSWER-a decrease in
liabilities and an increase in equity
which of the following is true of accrual accounting? - CORRECT ANSWER-revenue is
recorded on the income statement even when the cash has not yet been received
At Francis Marion Company, the bookkeeper made a mistake and recorded
equipment(which had been purchased for use in the business and had an expected life
of 10 years) as an expense in the period it was purchased. The result of this mistake is -
CORRECT ANSWER-both assets and net income are understated
Which of the following is true about unearned revenue? - CORRECT ANSWER-when
unearned revenue is earned, liabilities are decreased and revenue is increased
If a company fails to record accrued interest on a note payable at the end of an
accounting period - CORRECT ANSWER-total liabilities will be understated
BRAINSCAPE1
IU A200 Exam 1 Exam with
complete solutions latest version
Harry Company uses janitorial supplies on a daily basis. Under the ACCRUAL basis of
accounting, these supplies should be an expense of the period in which they are... -
CORRECT ANSWER-used
Recording of periodic depreciation on assets such as buildings or trucks relates
primarily to - CORRECT ANSWER-the matching principle
An adjusting entry that decreases both assets and owner's equity at the end of the
accounting period is the entry to record - CORRECT ANSWER-depreciation
The two major divisions of stockholders' equity are - CORRECT ANSWER-contributed
capital and retained earnings
The adjustment to record the completion of services for which clients had paid in
advance would involve which of the following? - CORRECT ANSWER-a decrease in
liabilities and an increase in equity
which of the following is true of accrual accounting? - CORRECT ANSWER-revenue is
recorded on the income statement even when the cash has not yet been received
At Francis Marion Company, the bookkeeper made a mistake and recorded
equipment(which had been purchased for use in the business and had an expected life
of 10 years) as an expense in the period it was purchased. The result of this mistake is -
CORRECT ANSWER-both assets and net income are understated
Which of the following is true about unearned revenue? - CORRECT ANSWER-when
unearned revenue is earned, liabilities are decreased and revenue is increased
If a company fails to record accrued interest on a note payable at the end of an
accounting period - CORRECT ANSWER-total liabilities will be understated
BRAINSCAPE1
