Expense and Prepaid Insurance
Name:___________________________________________ Net ID:_____
True/False: If the statement is FALSE, you must explain why or correct it to get credit
(1 point each)
Example:
New York City is the capital of the United States of America.
255198292710Washington D.C.
TrueFalse(circle one)
Questions:
1.Under accrual basis accounting, revenues are recognized when earned and expenses are recognized when incurred.
TrueFalse(circle one)
If false, explain below or correct above:
2.Expenses are decreases in assets or increases in liabilities incurred in order to generate revenues.
TrueFalse(circle one)
If false, explain below or correct above:
3.Deferred expenses are initially recorded as assets and when they are later used, expenses will increase and assets will decrease.
TrueFalse(circle one)
If false, explain below or correct above:
4.Due to the relationship of financial statements, the statement of retained earnings links the income statement to the balance sheet.
TrueFalse(circle one)
If false, explain below or correct above:
5.The mission of the Securities & Exchange Commission (SEC) is to develop generally accepted accounting principles. TrueFalse(circle one)
If false, explain below or correct above:
FALSE
The mission of the SEC is to protect investors and maintain the integrity of the securities markets. The mission of the FASB is to develop generally accepted accounting principles. Multiple Choice – Circle the correct answer.
(1 point each) 6.Which of the following is not a criterion pertaining to the revenue realization principle?
A. The goods or services have been delivered.
B. The selling price is fixed or determinable.
C. Collection is reasonably assured.
D. The cash payment has been received.
7. On October 1, 2013, Adams Company paid $4,800 for a two-year insurance policy with the insurance coverage beginning on that date. As of December 31, 2013, which of the following account balances are correct after
True/False: If the statement is FALSE, you must explain why or correct it to get credit
(1 point each)
Example:
New York City is the capital of the United States of America.
255198292710Washington D.C.
TrueFalse(circle one)
Questions:
1.Under accrual basis accounting, revenues are recognized when earned and expenses are recognized when incurred.
TrueFalse(circle one)
If false, explain below or correct above:
2.Expenses are decreases in assets or increases in liabilities incurred in order to generate revenues.
TrueFalse(circle one)
If false, explain below or correct above:
3.Deferred expenses are initially recorded as assets and when they are later used, expenses will increase and assets will decrease.
TrueFalse(circle one)
If false, explain below or correct above:
4.Due to the relationship of financial statements, the statement of retained earnings links the income statement to the balance sheet.
TrueFalse(circle one)
If false, explain below or correct above:
5.The mission of the Securities & Exchange Commission (SEC) is to develop generally accepted accounting principles. TrueFalse(circle one)
If false, explain below or correct above:
FALSE
The mission of the SEC is to protect investors and maintain the integrity of the securities markets. The mission of the FASB is to develop generally accepted accounting principles. Multiple Choice – Circle the correct answer.
(1 point each) 6.Which of the following is not a criterion pertaining to the revenue realization principle?
A. The goods or services have been delivered.
B. The selling price is fixed or determinable.
C. Collection is reasonably assured.
D. The cash payment has been received.
7. On October 1, 2013, Adams Company paid $4,800 for a two-year insurance policy with the insurance coverage beginning on that date. As of December 31, 2013, which of the following account balances are correct after