The accounting equation is the basis for analyzing

Question 1.1.The accounting equation is the basis for analyzing, summarizing, and recording transactions in accounting. The accounting equation is: (Points : 2) Assets =Liabilities Assets = Liabilities + Stockholders Equity Liabilities = Assets + Stockholders Equity Stockholders Equity = Liabilities + AssetsQuestion 2.2.On April 1, Smith, Inc. paid $3,600 for an insurance premium on a three-year insurance policy. How does this transaction affect Smart’s accounts? (Points : 2) Increase insurance expense and decrease cash by $3,600 each Increase unearned insurance and decrease cash by $3,600 each Increase prepaid insurance and decrease cash by $3,600 each Increase prepaid insurance and decrease retained earnings by $3,600 eachQuestion 3.3.Which of the following will increase stockholders’ equity? (Points : 2) Expenses Owner investment Accounts payable DividendsQuestion 4.4.Which section of the Statement of Cash Flows is affected when cash is received in payment of an account receivable? (Points : 2) Cash flow from investing activities Cash flow from financing activities Cash flow from operating activities There is no effect on the statement of cash flowsQuestion 5.5.A&M Co. provided services of $2,000,000 to clients on account. How does this transaction affect A&M’s accounts? (Points : 2) Increase accounts receivable and cash by $2,000,000 each Increase accounts receivable and unearned revenues by $2,000,000 each Increase cash and decrease accounts receivable by $2,000,000 each Increase accounts receivable and revenues by $2,000,000 eachQuestion 6.6.What is the purpose of accrual accounting? (Points : 2) To avoid misleading information which arises from timing of cash receipts and payments Helps with cash transactions Helps to align the ongoing concern concept To help post to accounts receivableQuestion 7.7.On the balance sheet, Accrued expenses are ordinarily reported as: (Points : 2) Fixed assets Prepaid expenses Assets LiabilitiesQuestion 8.8.What are the four timing differences between recognizing revenues and expenses between accrual basis and cash basis accounting? (Points : 2) Accrued revenue, accrued expenses, deferred revenue, deferred expenses Cash, revenue, expenses and liabilities Accounts receivable, accounts payable, long term liabilities, intangible assets Revenue, expenses, assets, retained earningsQuestion 9.9.What type of an account is unearned revenue? (Points : 2) Asset Revenue Stockholders’ equity LiabilityQuestion 10.10.Jedi Co. billed a client for flying lessons given in January. The payment was received in February. Under the accrual basis of accounting, when should Jedi record the revenue? (Points : 2) January February Some in January and some in February Jedi should not record any revenueQuestion 11.11.Depreciation Expense and Accumulated Depreciation are classified, respectively, as (Points : 2) expense and contra asset asset and contra liability revenue and asset contra asset and expenseQuestion 12.12.Updating accrual accounting records prior to preparing financial statements is: (Points : 2) The adjustment process Going concern adjustments The closing process Converting to cash basis accountingQuestion 13.13.Which of the following accounts would likely be included in a deferral adjusting entry? (Points : 2) Interest revenue Unearned revenue Salaries payable Accounts receivableQuestion 14.14.Unearned rent, representing rent paid for the next six months’ occupancy, would be reported on the landlord’s balance sheet as a (n) (Points : 2) asset liability capital stock revenueQuestion 15.15.The __________ is prepared with various sections, subsections, and captions that aid in its interpretation and analysis. (Points : 2) accounting equation retained earnings statement intangible asset section classified balance sheetQuestion 16.16.Accumulated depreciation is __________ to get the carrying value. (Points : 2) added to equipment subtracted from equipment added to accounts payable subtracted from accounts payableQuestion 17.17.On the statement of cash flows, the cash flows from operating activities section would include (Points : 2) receipts from the issuance of capital stock receipts from the sale of investments payments for the acquisition of investments cash receipts from sales activitiesQuestion 18.18.Which of the following is an example of a deferred expense? (Points : 2) Prepaid advertising Unearned revenue Accounts payable Accounts receivableQuestion 19.19.For a corporation, stockholders’ equity consists of (Points : 2) assets plus liabilities current assets plus long-term assets intangible assets capital stock and retained earningsQuestion 20.20.If prepaid insurance expires over time, this asset account becomes a (n) (Points : 2) liability another asset revenue expenseTime Remaining:

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