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Chapters 1-4The Accounting Cycle
Chapters 5-8Current Assets
Chapters 9-11Long-Term Assets
Chapters 12-14Liabilities/Equities
Chapters 15-16Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20Managerial/Cost
Chapters 21-24Budgeting/Decisions

Chapters 1-4The Accounting Cycle
Chapters 5-8Current Assets
Chapters 9-11Long-Term Assets
Chapters 12-14Liabilities/Equities
Chapters 15-16Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20Managerial/Cost
Chapters 21-24Budgeting/Decisions

Chapter 3 – Multiple Choice

By admin / June 30, 2015

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Question 1 of 8

1. Question
For purposes of measuring business income, the life of a business is:
- divided into specific points in time.
- divided into irregular cycles.
- divided into discrete accounting periods.
- considered to be a continuous cycle.
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Question 2 of 8

2. Question
Adjusting entries at the end of an accounting period would not be required for which of the following
- Multiperiod costs that must be split among two or more accounting periods.
- Multiperiod revenues that must be split among two or more accounting periods.
- Expenses that have been incurred in a given period but not as yet recorded in the accounts.
- Revenue that has been earned and recorded in the accounting records.
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Question 3 of 8

3. Question
Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Which of the following journal entries would Blankenship ordinarily record on the Friday payday?
- Salary Expense 10,000
  
  Salary Payable 10,000
- Salary Expense 10,000
  
  Cash 10,000
- Salary Payable 10,000
  
  Cash 10,000
- Salary Payable 10,000
  
  Salary Expense 10,000
Correct

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Question 4 of 8

4. Question
Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. What journal entry would be recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday?
- Salary Expense 6,000
  
  Salary Payable 6,000
- Salary Expense 6,000
  
  Cash 6,000
- Salary Payable 6,000
  
  Cash 6,000
- Salary Payable 6,000
  
  Salary Expense 6,000
Correct

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Question 5 of 8

5. Question
Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Blankenship’s year-end occurred on Wednesday, at which time a correct adjusting entry was recorded. On the following Friday, which of the following payroll journal entries should be recorded?
- Salary Expense 10,000
  
  Cash 10,000
- Salary Expense   4,000
  
  Salary Payable   6,000
  
        Cash   10,000
- Salary Expense   6,000
  
  Salary Payable   4,000
  
        Cash   10,000
- Salary Payable 10,000
  
  Cash 10,000
Correct

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Question 6 of 8

6. Question
The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts?
- Equipment
- Accumulated Depreciation: Equipment
- Retained Earnings
- Cash
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Question 7 of 8

7. Question
At the end of the current accounting period, Johnson Company failed to record utilities consumed during the period. Johnson will be billed for the utilities during the next accounting period. As a result, current period assets, liabilities, equity, and income, respectively, are:
- Overstated, overstated, correct, correct
- Correct, understated, overstated, overstated
- Overstated, understated, overstated, overstated
- Overstated, understated, correct, correct
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Question 8 of 8

8. Question
On November 1, 20X1, Limit Company purchased a one-year insurance policy for $12,000. Limit Company debited Cash and credited Prepaid Insurance for $12,000. At the end of December, 20X1, $2,000 of insurance had expired. The journal entry to properly state all accounts involved on December 31, 20X1, would be:
- Insurance Expense   2,000
  
  Prepaid Insurance   22,000
  
        Cash   24,000
- Insurance Expense 2,000
  
  Prepaid Insurance 2,000
- Insurance Expense 2,000
  
  Cash 2,000
- Prepaid Insurance 2,000
  
  Insurance Expense 2,000
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