ACC 556 STR help A Guide to career/uophelp.com ACC 556 STR help A Guide to career/uophelp.com | Page 11

Chapter 4 Quiz
Question 1
The revenue recognition principle dictates that revenue be recognized in
the accounting period in which the performance obligation is satisfied.
Question 2
An adjusting entry to a prepaid expense is required to recognize expired
expenses.
Question 3
Unearned revenue is a prepayment that requires an adjusting entry when
services are performed.
· Question 4
When closing entries are prepared, each income statement account is
closed directly to retained earnings.
· Question 5
The accounting cycle begins with the journalizing of the transactions
· Question 6
Management usually wants ________ financial statements and the IRS
requires all businesses to file _________ tax returns.
· Question 7
A flower shop makes a large sale for $1,000 on November 30. The
customer is sent a statement on December 5 and a check is received on
December 10. The flower shop follows GAAP and applies the revenue
recognition principle. When is the $1,000 considered to be recognized?
· Question 8
Which statement is correct?
· Question 9
Given the data below for a firm in its first year of operation, determine
net income under the cash basis of accounting.
Cash received from customers
$48,000
Accounts receivable
12,000
Cash paid for expenses
26,000
Accounts payable (related to expenses)
3,000
Prepaid rent for next period
7,000
· Question 10