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

Chapter 3 - Goals Achievement

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Chapter 3 – Goals Achievement

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Goals Achievement
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Question 1 of 12

1. Question
In general, accountants measure income using an approach based on:
- transactions
- economics
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Question 2 of 12

2. Question
Which concept holds that an organization’s life can be divided into discrete accounting periods (months, quarters, years)?
- transactions approach
- periodicity assumption
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Question 3 of 12

3. Question
The periodicity assumption seems practical and logical; however, it introduces allocation problems when dividing the life of a company into specific units of time.
- true
- false
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Question 4 of 12

4. Question
Under the accrual basis of accounting, revenue should be recognized at the time services are rendered or when goods are sold and delivered to a customer.
- right
- wrong
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Question 5 of 12

5. Question
Business expenses should be recognized in the same period as the revenues they helped to produce. This concept is known as the:
- matching principle
- cash basis of accounting
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Question 6 of 12

6. Question
Adjusting entries are necessary to fulfill the goals of proper income measurement and are consistent with the cash basis of accounting.
- true
- false
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Question 7 of 12

7. Question
The recording and accounting for prepaid expenses, depreciation, and similar items is consistent with the adjusting process for:
- multiperiod costs and revenues that must be split among two or more accounting periods
- revenues and expenses that have been earned or incurred in a given period but not recorded in the accounts
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Question 8 of 12

8. Question
Revenues and expenses that gradually accumulate throughout an accounting period are known as:
- accruals
- deferrals
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Question 9 of 12

9. Question
An appropriate journal entry to record accrued interest would involve a debit to Interest Expense and a credit to:
- Interest Payable
- Unearned Interest
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Question 10 of 12

10. Question
Adjusting entries should be determined:
- subsequent to preparing financial statements
- prior to preparing financial statements
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Question 11 of 12

11. Question
An adjusted trial balance is prepared by changing specific account balances in the trial balance by the amount of the adjustments from the adjusting entries.
- true
- false
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Question 12 of 12

12. Question
Prepaid expenses would initially be recorded in an expense account under which adjusting entry approach?
- balance sheet approach
- income statement approach
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Additional Resources

Illustrative Entries

Examples of journal entries for numerous sample transactions

Account Types

Typical financial statement accounts with debit/credit rules and disclosure conventions

Glossary

Includes financial and managerial terms

Time Value of Money

Future and present value tables

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Chapters 1-4
Chapters 5-8
Chapters 9-11
Chapters 12-14
Chapters 15-16
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20
Chapters 21-24
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