Module 1(a) Green Sheets 1.Which of the following list of events properly reflects the early steps taken in the accounting process? A.Record relevant transactions, post journal information to ledger accounts, analyze each transaction, prepare an unadjusted trial balance B.Post journal information to ledger accounts, analyze each transaction, post journal information to ledger accounts, prepare an adjusted trial balance C.Analyze each transaction, record relevant transactions, post journal information to ledger accounts, prepare an unadjusted trial balance D.Analyze each transaction, post journal information to ledger accounts, record relevant transactions, prepare an unadjusted trial balance E.Prepare an unadjusted trial balance, analyze accounts for abnormal balances, post closing entries, Prepare financial statements 2.Deferred Expense normally carries a _______ balance and is reported on the ______________. A.Debit; Statement of stockholders' equity. B.Debit; Income statement. C.Credit; Balance sheet. D.Debit; Balance Sheet. E.Credit; Income Statement 5.Accountants use the term "credit" to refer to A.Accounting events which represent an economic inflow B.A reduction in amounts owed C.Events that increase account balances D.An amount entered on the right-hand side of an account E.Both C and D 5(b)If the liabilities of a business increased $75,000 during a period of time and the equity in the business decreased $30,000 during the same period, the assets of the business must have: A) Decreased $105,000.B) Decreased $45,000.C) Increased $30,000.D) Increased $45,000. E) Increased $105,000. Page 63 Downloaded by Burbank England ([email protected])lOMoARcPSD|20851058
6.The recognition of a revenue wouldmost likelybe accompanied by which of the following? A.a decrease in assets B.an increase in liabilities C.an increase in assets D.The contribution of capital by an owner E.None of the above 7.Select the true statement below A.According to the matching principle, wages expense is recognized on the income statement when the wages are paid rather than when the employee provides the work. B.Purchasing a six-month insurance policy results in a debit to insurance expense and a credit to cash at the date of purchase. C. Accruals occur when the cash flow precedes either revenue or expense recognition. D.The matching principle requires expenses to be recorded on the income statement in the same period they are incurred in generating revenues. E.None of the above. 8.A company that sells magazines and collects subscription fees prior to the publication and distribution of the magazine. As the cash is received in advance from the customers, the company should record a debit to Cash and a credit to A.Sales revenue. B.Prepaid expenses. C.Unearned revenue. D.Accounts payable. E.None of the above is correct. 9. A calendar year reporting company preparing its annual financial statements should use the phrase "For the twelve months ended as of December 31, 2017" in the heading of which financial statements? A.This heading would not be appropriate for any of the required financial statements. B.This heading would be used on the income statement. C.This heading would be used on the balance sheet. D.This heading would be used on both the balance sheet and income statement 10. When a magazine company collects cash for selling a subscription, it is an example of: A) An accrued liability transaction.B) An accrued receivable transaction. C) A prepaid expense transaction.D) A deferred revenue transaction.E. An estimated revenue 11) A company purchased supplies for cash, which will be consumed during future months. Which of the following correctly describes the impact of the supplies purchase on the financial statements? A) Total assets will remain unchanged.B) Total assets will decrease. C) Operating expenses will increase.D) Operating income will decrease.E. NOTA Page 64 Downloaded by Burbank England ([email protected])lOMoARcPSD|20851058
12) Consider the following statements about deferred revenues & select the number of true statements: (i) deferred revenues are generally accompanied by the businesses promise to make a future cash payment. (ii) deferred revenues are revenues that have been earned but not yet collected in cash. (iii) deferred revenues are classified as liabilities on the balance sheet (iv) deferred revenues are classified as assets on the balance sheet.
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