FAR — Financial Accounting & Reporting — Quiz 15

Questions in this quiz (10)

1. Which adjusting entry is required when services are provided but payment has not yet been received?

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

2. Which account increases when recording amortization expense?

   • Equipment
   • Accumulated amortization
   • Cash
   • Accounts payable

3. Which adjusting entry recognizes utilities expense incurred but unpaid?

   • Debit Utilities Expense; Credit Utilities Payable
   • Debit Utilities Payable; Credit Cash
   • Debit Cash; Credit Utilities Expense
   • Debit Utilities Expense; Credit Cash

4. Which accounting concept requires expenses to be recorded in the same period as related revenues?

   • Historical cost principle
   • Matching principle
   • Revenue recognition principle
   • Full disclosure principle

5. Which financial statement is affected when expenses increase?

   • Balance sheet
   • Income statement
   • Statement of cash flows
   • Statement of retained earnings

6. Which account is credited when recording accrued payroll?

   • Cash
   • Salaries payable
   • Salaries expense
   • Accounts receivable

7. A company pays $12,000 for a four-month consulting contract beginning June 1. What expense is recognized by June 30?

   • $1,000
   • $3,000
   • $4,000
   • $12,000

8. Which account is credited when revenue previously recorded as deferred becomes earned?

   • Revenue
   • Unearned revenue
   • Accounts receivable
   • Expense

9. Which adjusting entry records expiration of prepaid rent?

   • Debit Rent Expense; Credit Prepaid Rent
   • Debit Prepaid Rent; Credit Rent Expense
   • Debit Rent Expense; Credit Cash
   • Debit Cash; Credit Rent Expense

10. Which best describes the purpose of the adjusted trial balance?

    • To record adjusting entries
    • To verify debit and credit balances after adjustments
    • To close temporary accounts
    • To prepare journal entries