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Exam 2: Accounting for Accruals and Deferrals

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Question 81

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Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.Increase = I Decrease = D Not Affected = NATodd Company collected $2,000 cash from accounts receivable.

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Collecting on accounts receivable incre...

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Question 82

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Two of the steps in the accounting cycle are adjusting the accounts and closing the accounts.

A) True
B) False

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Question 83

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Bledsoe Company received $31,000 cash from the issue of stock on January 1, Year 1. During Year 1, Bledsoe earned $10,100 of revenue on account. The company collected $9,200 cash from accounts receivable and paid $7,000 cash for operating expenses. Based on this information alone, during Year 1, which of the following statements is true?

Indicate whether each of the following statements about the closing process and the accounting cycle is true or false.The closing process transfers certain account balances to retained earnings at the end of the accounting cycle.Only accounts that appear on the income statement are closed at the end of each accounting cycle.The permanent accounts contain information that is cumulative in nature.The retained earnings balance at the end of any given year is equal to that year's net income.

Which of the following accounts would not appear on a balance sheet?

Classify each of the following transactions for the purpose of the statement of cash flows as operating activities (OA), investing activities (IA), financing activities (FA), or not reported on the statement of cash flows (NA).Collected accounts receivableMade adjusting entry to accrue salary expense at the end of the yearBorrowed funds from the bankPaid rent for the monthPaid cash to settle accounts payableIssued common stock for $30,000 cashPaid cash to acquire land

Rushmore Company provided services for $16,500 cash during Year 1. Rushmore incurred $13,000 expenses on account during Year 1, and by the end of the year, $3,500 of that amount had been paid with cash. Assuming that these are the only accounting events that affected Rushmore during Year 1, which of the following statements is true?

The adjusting entry to recognize work completed on unearned revenue involves which of the following?

Greg Company recognized revenue on account. Which of the following financial statements are affected by this accounting event?

Jantzen Company recorded employee salaries earned but not yet paid. Which of the following represents the effect of this transaction on the financial statements?

Revenue on account amounted to $9,000. Cash collections of accounts receivable amounted to $8,100. Cash paid for expenses was $7,500. The amount of employee salaries accrued at the end of the year was $900. What is the net cash flow from operating activities for the year?

XYZ Company used $5,000 cash to pay off its accounts payable. With respect to this event, indicate whether each of the following statements is true or false.Total assets would decrease.Expenses would increase.Total liabilities would remain the same.

Which of the following shows how the year-end adjustment to recognize supplies expense will affect a company's financial statements?

Leece Company experienced an accounting event that affected its financial statements as indicated below: $+/- \quad\quad\quad \text{n/a}\quad\quad\quad\quad\quad \text{n/a}\quad\quad\quad \text{n/a}\quad\quad\quad\quad \text{n/a}\quad\quad \text{n/a}\quad\quad \text{+QA}$ Which of the following accounting events could have caused these effects on the company's financial statements?

Wheaton Company performed services for a customer on account. Indicate whether each of the following statements about this transaction is true or false.Assets and stockholders' equity both increase when the revenue is recognized.This transaction did not affect cash flows.The company recorded an increase in revenue and a decrease in accounts receivable.Recognition of revenue would be delayed until cash was received.This transaction is an example of an asset exchange transaction.

Earning revenue on account would be classified as a/an?

Which of the following is an asset use transaction?