Question 1 What are the distinctive features of accural accounting and cash-basi

Question

Question 1
What are the distinctive features of accural accounting and cash-basis accounting?
Answer a. Cash-basis accounting records all transactions
b. Accrual accounting is superior because it provides more information
c. Accrual accounting records only receivables, payables, and depreciation
d. All the above are true
Question 2
Hercules Workout World gains a client who prepays $630 for a package of six physical training sessions. Hercules Workout World collects the $630 in advance and will provide the training later. After two training sessions, what should Hercules Workout World report on its income statement?
Answer a. Unearned service revenue of $210
b. Service revenue of $210
c. Cash of $420
d. Service revenue of $630
Question 3
The revenue principle says
Answer a. Measure revenues and expenses in order to compute net income
b. Divide time into annual periods to measure revenue properly
c. Record revenue only after you have earned it
d. Record revenue after you receive cash
Question 4
Accounting data flow from the
Answer a. Balance sheet to the income statement
b. Statement of owner's equity to the balance sheet
c. Income statement to the statement of owner's equity
d. Both b and c are correct
Question 5
Which accounting principle or concept guides accounting for expenses?
Answer a. The Accounting Expense Principle
b. Matching Principle
c. Time-Period Concept
d. Revenue Principle
Question 6
Assume you prepay Hercules Workout World for a package of six physical training sessions. Which type of account should you have in your records?
Answer a. Prepaid expense
b. Accrued expense
c. Accrued revenue
d. Unearned revenue
Question 7
Which accounting principle or concept discuss how often information should be reported?
Answer a. Time-Period Concept
b. Revenue Principle
c. Matching Principle
d. Accounting Concept
Question 8
Adjusting the accounts is the process of
Answer a. Recording transactions as they occur during the period
b. Zeroing out account balances to prepare for the next period
c. Subtracting expenses from revenues to measure net income
d. Updating the accounts at the end of the period
Question 9
Unearned revenue is always a(n)
Answer a. Asset
b. Liability
c. Revenue
d. Owner's equity because you collected the cash in advance
Question 10
The adjusted trial balance shows
Answer a. Amounts ready for the financial statements
b. Amounts that may be out of balance
c. Assets, liabilities, and owner's equity only
d. Revenues and expenses only

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