Question :
61. A company purchased supplies for cash which will be consumed : 1228494
61. A company purchased supplies for cash which will be consumed during future months. Which of the following correctly describes the impact of the supplies purchase on the financial statements?
A. Total assets will remain unchanged.
B. Total assets will decrease.
C. Operating expenses will increase.
D. Operating income will decrease.
62. A company purchased supplies for cash which will be consumed during future months. Which of the following does not correctly describe the impact on the financial statements when the supplies are used during future months?
A. Total assets will remain unchanged.
B. Total assets will decrease.
C. Operating expenses will increase.
D. Operating income will decrease.
63. The revenue principle requires four conditions to be met. Which of the following is one of the four conditions?
A. The customer has paid for the goods or services.
B. Delivery of goods or performance of service has occurred or is scheduled to occur.
C. The price is fixed or determinable.
D. The customer has signed a contract.
64. Which of the following journal entries is correct when a company has incurred interest expense but has not yet paid the interest?
A. Option A
B. Option B
C. Option C
D. Option D
65. McNeil Company owed its employees for services performed and recorded a liability for the wages owed the employees. Which of the following correctly describes the impact on the financial statements when the employee wages are subsequently paid?
A. Operating expenses are increased.
B. Retained earnings decreases.
C. Operating income does not change.
D. Total assets remain the same.
66. Which of the following journal entries correctly records the receipt of a utility bill which will be paid for in later weeks?
A. Option A
B. Option B
C. Option C
D. Option D
67. Which of the following is not a proper application of the revenue principle?
A. Recording the sale of merchandise on credit as sales revenue.
B. Recording rent received in advance as unearned rent revenue.
C. Recording interest revenue when cash is collected rather than when earned.
D. Reducing the unearned service revenue account for service revenue performed at the end of the accounting period.
68. Which of the following is an example of revenue or expense to be recognized in the current period’s income statement?
A. Cash received from a client before the service is provided.
B. Inventory being held by a retail store.
C. Wages owed to employees who worked during the period.
D. Cash collected from an accounts receivable.
69. Which of the following liability accounts is likely to be satisfied without a future cash payment?
A. Wages payable
B. Unearned subscriptions revenue
C. Accounts payable
D. Taxes payable
70. A company receives a $50,000 cash deposit from a customer on October 15 but will not deliver the goods until November 20. Which of the following statements is true?
A. Cash will be reported on the statement of cash flows for the month of November.
B. Revenue will be recorded and reported on the income statement for October.
C. A liability will be reported on the balance sheet at the end of October.
D. A prepaid asset will be reported on the balance sheet at the end of October.
