Question 1

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Accepted Answer

A)  The cash account was credited for $47,000.
B)  Accounts payable was debited for $47,000.
C)  Supplies expense was increased by $47,000.
D)  Operating income was not changed by the payment to the suppliers.E) A) and B)
F) A) and C)

Question 2

Which of the following best describes the operating cycle?

Accepted Answer

A)  It is the length of the manufacturing process.
B)  It is the time that elapses from the purchase of inventory on account to the sale of inventory on account.
C)  It is the time that elapses from the completion of the manufacturing process to the cash collection from sale of the manufactured goods.
D)  It is the time that elapses from the cash payment to suppliers to collection of cash from customers.E) A) and C)
F) None of the above

Question 3

Selling inventory to a customer on account results in an increase in both assets and revenues.

Accepted Answer

A) True 
 B)False

Question 4

The trial balance needs to be prepared prior to preparation of the income statement.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is correct?

Accepted Answer

A)  Expense accounts result in decreases in net income and stockholders' equity and therefore have credit balances.
B)  Revenue accounts result in increases in net income and stockholders' equity and therefore have debit balances.
C)  Loss accounts result in decreases in net income and stockholders' equity and therefore have debit balances.
D)  Gain accounts result in increases in net income and stockholders' equity and therefore have debit balances.E) C) and D)
F) B) and D)

Question 6

The operating cycle is the time that elapses between a company's cash payment to suppliers for inventory purchases and the collection of cash from sale of inventory to customers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following best describes the expense recognition principle?

Accepted Answer

A)  It requires expenses to be recorded when they are paid for.
B)  It requires expenses to be recorded when incurred to generate revenues.
C)  It requires expenses to be recorded consistent with the cash basis of accounting.
D)  It does not allow expenses to be recorded if they are incurred prior to being paiD.The expense recognition principle requires that expenses be recorded when incurred in generating revenue.E) A) and B)
F) C) and D)

Question 8

Unearned revenues are reported as liabilities on the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 3: Operating Decisions and the Accounting System

Which of the following best describes the operating cycle?

Correct Answer
verified

Selling inventory to a customer on account results in an increase in both assets and revenues.

Correct Answer
verified

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Correct Answer
verified

The trial balance needs to be prepared prior to preparation of the income statement.

Correct Answer
verified

Unearned revenues are reported as liabilities on the balance sheet.

Correct Answer
verified

The operating cycle is the time that elapses between a company's cash payment to suppliers for inventory purchases and the collection of cash from sale of inventory to customers.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Which of the following best describes the expense recognition principle?

Correct Answer
verified

Exam 3: Operating Decisions and the Accounting System

Which of the following best describes the operating cycle?

Correct AnswerverifiedShow Answer

Selling inventory to a customer on account results in an increase in both assets and revenues.

Correct AnswerverifiedShow Answer

Which of the following statements is false when Mama June Pizza Company paid $47,000 cash on accounts owed to suppliers?

Correct AnswerverifiedShow Answer

The trial balance needs to be prepared prior to preparation of the income statement.

Correct AnswerverifiedShow Answer

Unearned revenues are reported as liabilities on the balance sheet.

Correct AnswerverifiedShow Answer

The operating cycle is the time that elapses between a company's cash payment to suppliers for inventory purchases and the collection of cash from sale of inventory to customers.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following best describes the expense recognition principle?

Correct AnswerverifiedShow Answer

Correct Answer
verified

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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