BRAINSCAPE1
A200 FINAL EXAM Exam with
complete solutions latest version
An equity investor is - CORRECT ANSWER-A person who provides money to a
company which never has to be paid back but periodic cash payments are expected
A member of the board of directors is - CORRECT ANSWER-A representative of the
stockholders who guides the corporation by making decisions concerning top
management compensation, dividend payments, and various other major decisions
concerning the firm
What changes describe the purchase of supplies on account? - CORRECT ANSWER-
Increase in assets and liabilities
What changes describe the payment for repairs to equipment? - CORRECT ANSWER-
Decrease in assets and owner's equity
What changes describe payment of an accounts payable? - CORRECT ANSWER-
Decrease in assets and liabilities
Net income and dividends paid to the stockholders are found in the - CORRECT
ANSWER-Retained Earnings Statement
The approach to preparing financial statements based on recognizing revenues when
they are earned and matching expenses to those revenues is - CORRECT ANSWER-
Accrual basis accounting
The recognition of an expense may be accompanied by - CORRECT ANSWER-A
decrease in liabilities
Due to an oversight, the company bookkeeper made no adjusting entry for accrued and
unpaid employee wages. This oversight would - CORRECT ANSWER-Overstate net
income
Rent received in advance is - CORRECT ANSWER-A deferred revenue
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A&D Window Cleaning performed services, but has not yet billed customers for the
month. If A&D fails to record the adjusting entry, what is the impact on the financial
statement? - CORRECT ANSWER-Balance sheet: assets understated , equity
understated
Income statement: revenues understated
If expenses exceed revenue during a given accounting period - CORRECT ANSWER-
The income statement will show a net loss
On May 1, 2007, Perez Company paid $12,000 rent for a one year lease on equipment
it uses in its operations. The adjusting entry at the end of the year - CORRECT
ANSWER-Decreases assets and stockholders' equity
The dual effect of transactions means - CORRECT ANSWER-Every transaction affects
at least two accounts
Expenses are the cost of providing goods and services and result in - CORRECT
ANSWER-Decrease in assets or increase in liabilities
An adjusting entry to record utilities used during a month for which no bill has yet been
received is an example of - CORRECT ANSWER-Accruing expenses to reflect
expenses incurred during the accounting period that are not yet paid or recorded
What doesn't affect total assets, total liabilities, or total stockholder's equity on the
balance sheet? - CORRECT ANSWER-Collecting money from customers on account
The matching principle - CORRECT ANSWER-Requires that expenses be subtracted
from income in the same period that the related revenues are recognized
GAAP is an acronym for - CORRECT ANSWER-Generally Accepted Accounting
Principles
If a company fails to record expired rent at the end of an accounting period - CORRECT
ANSWER-Total assets will be overstated
Outflows or the using of assets as a result of the major or central operations of a
business are termed - CORRECT ANSWER-Expenses
What is an example of a deferral (or prepaid) adjusting entry? - CORRECT ANSWER-
Recording the usage of office supplies during the period
True or False
Total assets are increased when an accounts receivable is collected - CORRECT
ANSWER-False
True or False
BRAINSCAPE1
A200 FINAL EXAM Exam with
complete solutions latest version
An equity investor is - CORRECT ANSWER-A person who provides money to a
company which never has to be paid back but periodic cash payments are expected
A member of the board of directors is - CORRECT ANSWER-A representative of the
stockholders who guides the corporation by making decisions concerning top
management compensation, dividend payments, and various other major decisions
concerning the firm
What changes describe the purchase of supplies on account? - CORRECT ANSWER-
Increase in assets and liabilities
What changes describe the payment for repairs to equipment? - CORRECT ANSWER-
Decrease in assets and owner's equity
What changes describe payment of an accounts payable? - CORRECT ANSWER-
Decrease in assets and liabilities
Net income and dividends paid to the stockholders are found in the - CORRECT
ANSWER-Retained Earnings Statement
The approach to preparing financial statements based on recognizing revenues when
they are earned and matching expenses to those revenues is - CORRECT ANSWER-
Accrual basis accounting
The recognition of an expense may be accompanied by - CORRECT ANSWER-A
decrease in liabilities
Due to an oversight, the company bookkeeper made no adjusting entry for accrued and
unpaid employee wages. This oversight would - CORRECT ANSWER-Overstate net
income
Rent received in advance is - CORRECT ANSWER-A deferred revenue
BRAINSCAPE1
, BRAINSCAPE1
A&D Window Cleaning performed services, but has not yet billed customers for the
month. If A&D fails to record the adjusting entry, what is the impact on the financial
statement? - CORRECT ANSWER-Balance sheet: assets understated , equity
understated
Income statement: revenues understated
If expenses exceed revenue during a given accounting period - CORRECT ANSWER-
The income statement will show a net loss
On May 1, 2007, Perez Company paid $12,000 rent for a one year lease on equipment
it uses in its operations. The adjusting entry at the end of the year - CORRECT
ANSWER-Decreases assets and stockholders' equity
The dual effect of transactions means - CORRECT ANSWER-Every transaction affects
at least two accounts
Expenses are the cost of providing goods and services and result in - CORRECT
ANSWER-Decrease in assets or increase in liabilities
An adjusting entry to record utilities used during a month for which no bill has yet been
received is an example of - CORRECT ANSWER-Accruing expenses to reflect
expenses incurred during the accounting period that are not yet paid or recorded
What doesn't affect total assets, total liabilities, or total stockholder's equity on the
balance sheet? - CORRECT ANSWER-Collecting money from customers on account
The matching principle - CORRECT ANSWER-Requires that expenses be subtracted
from income in the same period that the related revenues are recognized
GAAP is an acronym for - CORRECT ANSWER-Generally Accepted Accounting
Principles
If a company fails to record expired rent at the end of an accounting period - CORRECT
ANSWER-Total assets will be overstated
Outflows or the using of assets as a result of the major or central operations of a
business are termed - CORRECT ANSWER-Expenses
What is an example of a deferral (or prepaid) adjusting entry? - CORRECT ANSWER-
Recording the usage of office supplies during the period
True or False
Total assets are increased when an accounts receivable is collected - CORRECT
ANSWER-False
True or False
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