Question 1

Boone's Cleaning Service performed cleaning services during December 2019,but had not collected any cash from its customers as of December 31,2019.What impact did performing these services have on the accounting equation?

Accepted Answer

A)  Performing the service increased assets and increased liabilities.
B)  Performing the service increased assets and increased stockholders' equity.
C)  Performing the service increased assets and decreased stockholders' equity.
D)  Performing the service decreased liabilities and decreased stockholders' equity.E) A) and B)
F) B) and D)

Question 2

According to the expense recognition principle,wages expense is recognized on the income statement when the wages are paid rather than when the employee provides the work.

Accepted Answer

A) True 
 B)False

Question 3

Complete the chart below for Monticello Corporation by placing an X in the appropriate boxes to indicate how the transaction should be recorded.

Accepted Answer

The answer of Complete the chart below for Monticello Corporation...

Question 4

Application of generally accepted accounting principles requires that the accrual basis of accounting be used for reporting revenues and expenses on the income statement.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not reported as an operating expense on the income statement?

Accepted Answer

A)  Wages expense.
B)  Rent expense.
C)  Interest expense.
D)  Cost of goods sold.E) B) and D)
F) B) and C)

Question 6

The following information has been provided by Hable Company: • Advertising expense $9,900
• Interest expense $3,700
• Rent expense for store $12,000
• Loss on sale of property and equipment $5,700
• Cost of goods sold $21,300
• Depreciation expense $7,100
• Prepaid insurance $1,000
-
How much were Hable's total expenses in calculating operating income?

Accepted Answer

A)  $50,300.
B)  $54,000.
C)  $56,000.
D)  $43,200.E) B) and C)
F) A) and B)

Question 7

Which of the following accounts does not have a debit balance?

Accepted Answer

A)  Prepaid expenses.
B)  Insurance expense.
C)  Unearned revenue.
D)  Investments.E) All of the above
F) A) and B)

Question 8

Purchasing a six-month insurance policy results in a debit to insurance expense and a credit to cash at the date of purchase.

Accepted Answer

A) True 
 B)False

Exam 3: Operating Decisions and the Accounting System

Which of the following is not reported as an operating expense on the income statement?

Correct Answer
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Application of generally accepted accounting principles requires that the accrual basis of accounting be used for reporting revenues and expenses on the income statement.

Correct Answer
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Complete the chart below for Monticello Corporation by placing an X in the appropriate boxes to indicate how the transaction should be recorded.

Correct Answer
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Correct Answer
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According to the expense recognition principle,wages expense is recognized on the income statement when the wages are paid rather than when the employee provides the work.

Correct Answer
verified

Boone's Cleaning Service performed cleaning services during December 2019,but had not collected any cash from its customers as of December 31,2019.What impact did performing these services have on the accounting equation?

Correct Answer
verified

Purchasing a six-month insurance policy results in a debit to insurance expense and a credit to cash at the date of purchase.

Correct Answer
verified

Which of the following accounts does not have a debit balance?

Correct Answer
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Exam 3: Operating Decisions and the Accounting System

Which of the following is not reported as an operating expense on the income statement?

Correct AnswerverifiedShow Answer

Application of generally accepted accounting principles requires that the accrual basis of accounting be used for reporting revenues and expenses on the income statement.

Correct AnswerverifiedShow Answer

Complete the chart below for Monticello Corporation by placing an X in the appropriate boxes to indicate how the transaction should be recorded.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to the expense recognition principle,wages expense is recognized on the income statement when the wages are paid rather than when the employee provides the work.

Correct AnswerverifiedShow Answer

Boone's Cleaning Service performed cleaning services during December 2019,but had not collected any cash from its customers as of December 31,2019.What impact did performing these services have on the accounting equation?

Correct AnswerverifiedShow Answer

Purchasing a six-month insurance policy results in a debit to insurance expense and a credit to cash at the date of purchase.

Correct AnswerverifiedShow Answer

Which of the following accounts does not have a debit balance?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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