If Oxbow Corporation does not record a sale made on account in December until a month later when the customer pays its invoice, how will Oxbow's December financial statements be impacted?
A. Assets will be understated on the balance sheet, while revenues will be overstated on the income statement
...
Financial Accounting Exam 2 TTU
Questions & Answers
If Oxbow Corporation does not record a sale made on account in December until a
month later when the customer pays its invoice, how will Oxbow's December financial
statements be impacted?
A. Assets will be understated on the balance sheet, while revenues will be overstated
on the income statement
B. Assets will be overstated on the balance sheet, while revenues will be overstated on
the income statement
C. Assets will be understated on the balance sheet, while revenues will be understated
on the income statement
D. Assets will be overstated on the balance sheet, while revenues will be overstated on
the income statement - ANSWERSC
Which of the following transactions would be recorded of using the accrual bases of
accounting but not if using the cash basis of accounting?
A. Purchasing inventory on account
B. Collecting customer payments
C. Paying off loans
D. Borrowing money - ANSWERSA
A physician performs medical services for a patient on October 20; the total bill for the
medical services was $200. The patient makes a copay of $20 on October 20, and the
insurance company pays the remaining balance of $180 on November 19. On what
date(s) will the physician record the revenue for those medical services provided on
October 20? (Assume accrual basis)
A. $200 of revenue on October 20
B. $20 of revenue on October 20 and $180 of revenue on November 19
C. $180 of revenue on October 20 and the remaining $20 on November 19
D. $200 of revenue on November 19 - ANSWERSA
The Animal Adventure zoo gift shop sells stuffed animal toys. It's stuffed giraffe has a
suggested retail price of $19.95. The zoo initially priced it at $17.99, but it is now
marked down to $13.50. At other zoos, this same stuffed giraffe is priced at $15.99. An
Animal Adventure zoo customer purchases the giraffe for $13.50 from the gift shop. At
what price should Animal Adventure record the sale?
A. $19.95
B. $13.50
C. $17.99
D. $15.99 - ANSWERSB
According to U.S. GAAP, when should revenue be recorded?
, A. At the stated date in the contract
B. When the goods or services have been priced and offered for sale
C. When the service is performed or the goods have been delivered to the customer
D. When cash is received from the customer - ANSWERSC
All of the following are types of adjusting entries except
A. Depreciation
B. Deferrals
C. Transactions
D. Accruals - ANSWERSC
AllTech Corporation had a balance of $2,400 in Prepaid Supplies at the beginning of the
year. The company purchased $900 of supplies during the year. At year end, Prepaid
Supplies had a balance of $2,500. What is the amount of Supplies Expense that AllTech
Corporation will recognize for this year?
A. $1,000
B. $900
C. $2,500
D. $800 - ANSWERSD, remember Suppilies Expense is calculated as follows,
(Beginning Prepaid Supplies balance + purchase of supplies - Ending Prepaid Supplies
balance)
In this case ($2,400 + $900 - $2400 = $800)
What type of account is unearned revenue?
A. Asset
B. Revenue
C. Liability
D. Expense - ANSWERSC
What data flows from the statement of retained earnings to the balance sheet?
A. Assets
B. Ending retained earnings
C. Cash
D. Net income - ANSWERSB
Which financial statement reports assets, liabilities, and equity?
A. Statement of cash flows
B. Income statement
C. Statement of retained earnings
D. Balance sheet - ANSWERSD
A company's balance of retained earnings on January 1 was $25 million. During the
year, sales revenue was $100 million, while expenses totaled $45 million. The company
declared and paid $14 million in cash dividends during the year. What was the balance
of retained earnings at the end of the year?
A. $184 million
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