FAR — Financial Accounting & Reporting — Quiz 67

Questions in this quiz (10)

1. Which term describes revenue recognized before cash is collected?

   • Accrued revenue
   • Unearned revenue
   • Deferred expense
   • Accrued liability

2. Which term describes cash received before goods are delivered?

   • Accrued revenue
   • Unearned revenue
   • Prepaid expense
   • Deferred liability

3. Which entry records revenue received in cash?

   • Debit Cash; Credit Revenue
   • Debit Revenue; Credit Cash
   • Debit Accounts Receivable; Credit Revenue
   • Debit Expense; Credit Cash

4. Which entry records revenue earned on credit?

   • Debit Cash; Credit Revenue
   • Debit Accounts Receivable; Credit Revenue
   • Debit Revenue; Credit Accounts Receivable
   • Debit Expense; Credit Cash

5. What results when expenses are subtracted from revenues?

   • Gross profit
   • Net income
   • Assets
   • Liabilities

6. Which of the following best defines operating expenses?

   • Costs incurred to run daily operations
   • Long-term investments
   • Owner contributions
   • Liability payments

7. Which accounting principle requires expenses to match revenues?

   • Matching principle
   • Revenue recognition principle
   • Cost principle
   • Conservatism principle

8. Which account increases when an expense is recorded?

   • Expense
   • Cash
   • Revenue
   • Equity

9. Which account decreases when paying an expense in cash?

   • Cash
   • Expense
   • Revenue
   • Accounts receivable

10. Which of the following is an operating expense?

    • Rent expense
    • Bonds payable
    • Inventory
    • Capital stock