FAR Reviewer 4

Which of the following events would be associated with an end-of-period adjustment? a. The decision to start a second production shift. b. The payment of salaries and wages. C. The recording of depreciation on equipment. d. The transfer of staff to another department.

(a)  

Deferred revenues should be reported as a. contributed capital on the balance sheet. b. expenses on the income statement. c. income on the income statement. d. liabilities on the balance sheet.

(a)  

Accrued revenues should be reported as a. assets on the balance sheet. b. expenses on the income statement. c. liabilities on the balance sheet. d. revenues on the income statement.

(a)  

A deferred expense should be recorded when a. an expense is incurred as cash is paid. b. a non-cash resource is consumed after cash is paid. c. a service is rendered before payment of cash. d. cash is paid before an expense has been incurred.

(a)  

An accrued expense should be recorded a. by a buyer when a service is received on payment of cash. b. by a seller when a service is rendered before payment of cash. c. when an expense is incurred as cash is paid. d. when an expense is incurred before cash is paid.

(a)  

An accrued revenue should be recorded by a a. buyer when a service is received on payment of cash. b. seller when a customer pays for a service before the service is rendered. c. seller when a service is rendered before receipt of cash. d. seller when a service is rendered on receipt of cash.

(a)  

Deferred expenses should be reported as a. assets on the balance sheet. b. expenses on the income statement. c. income on the income statement. d. liabilities on the balance sheet.

(a)  

Accrued expenses should be reported as a. assets on the balance sheet. b. expenses on the income statement. c. liabilities on the balance sheet. d.revenues on the income statement.

(a)  

An end-of-period adjustment involves a. a change in an account balance that is neither an accrual or a deferral. b. a recognition of the extra cash flows related to the year-end delivery of goods and services. c. an adjustment that results in revenues or expenses being reported in a different time period from the associated cash flows. d. an exchange of resources between two departments in an organization.

(a)  

A deferred revenue should be recorded by a a. buyer when a service is received on payment of cash. b. seller when a customer pays for a service before the service is rendered. c. seller when a service is rendered before receipt of cash. d. seller when a service is rendered on receipt of cash.

(a)