FAR — Financial Accounting & Reporting — Quiz 14

Questions in this quiz (10)

1. Which of the following best describes deferred revenue?

   • Revenue earned but not billed
   • Cash received before services are performed
   • Revenue recorded at the end of the year
   • Revenue recognized when cash is paid

2. Which adjusting entry records the use of prepaid insurance?

   • Debit Insurance Expense; Credit Prepaid Insurance
   • Debit Prepaid Insurance; Credit Cash
   • Debit Insurance Expense; Credit Cash
   • Debit Cash; Credit Insurance Expense

3. Which account appears on the income statement after adjusting entries?

   • Accumulated amortization
   • Interest expense
   • Equipment
   • Notes payable

4. Which account decreases when deferred revenue becomes earned?

   • Cash
   • Unearned revenue
   • Accounts receivable
   • Expense

5. Which adjusting entry allocates the cost of intangible assets over time?

   • Accrued adjustment
   • Amortization adjustment
   • Revenue adjustment
   • Deferred expense

6. Which step follows preparation of the adjusted trial balance?

   • Closing entries
   • Preparing financial statements
   • Posting transactions
   • Journalizing

7. Which account is credited when recording accrued revenue?

   • Accounts receivable
   • Revenue
   • Cash
   • Expense

8. Which account increases when amortization expense is recorded?

   • Liability
   • Contra asset
   • Equity
   • Revenue

9. A company receives cash in advance for services. Which account is credited?

   • Revenue
   • Unearned revenue
   • Accounts payable
   • Expense

10. Which adjusting entry records wages earned but not yet paid?

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