ACCT 2101 Exam 2 Study Guide Chapters 4 � 6
Comprehensive review materials covering intermediate accounting concepts and principles
Scarlett Carter
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ACCT 2101 Exam 2 Study Guide Chapters 4 – 6
Chapter 4
1.The periodicity assumption states that:
a. a transaction can only affect one period of time.
b. estimates should not be made if a transaction affects more than one time period.
c. adjustments to the enterprise's accounts can only be made in the time period when
the business terminates its operations.
d. the economic life of a business can be divided into artificial time periods.
2.One of the accounting concepts upon which adjustments for prepayments and accruals are
based is:
a. expense recognition.
b. cost.
c. monetary unit.
d. economic entity.
3.An accounting time period that is one year in length is called:
a. a fiscal year.
b. an interim period.
c. the time period assumption.
d. a reporting period.
4.Expenses are recognized when:
a. they contribute to the production of revenue.
b. they are paid.
c. they are billed by the supplier.
d. the invoice is received.
5.The revenue recognition principle dictates that revenue should be recognized in the
accounting records:
a. when cash is received.
b. when it is earned.
c. at the end of the month.
d. in the period that income taxes are paid.
6.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 earned?
a. December 5
b. December 10
c. November 30
d. December 1
7.Under the cash basis of accounting:
a. Revenue is recognized when services are performed.
b. Expenses are matched with the revenue that is produced.
c. cash must be received before revenue is recognized.
d. a promise to pay is sufficient to recognize revenue.
Chapter 4
1.The periodicity assumption states that:
a. a transaction can only affect one period of time.
b. estimates should not be made if a transaction affects more than one time period.
c. adjustments to the enterprise's accounts can only be made in the time period when
the business terminates its operations.
d. the economic life of a business can be divided into artificial time periods.
2.One of the accounting concepts upon which adjustments for prepayments and accruals are
based is:
a. expense recognition.
b. cost.
c. monetary unit.
d. economic entity.
3.An accounting time period that is one year in length is called:
a. a fiscal year.
b. an interim period.
c. the time period assumption.
d. a reporting period.
4.Expenses are recognized when:
a. they contribute to the production of revenue.
b. they are paid.
c. they are billed by the supplier.
d. the invoice is received.
5.The revenue recognition principle dictates that revenue should be recognized in the
accounting records:
a. when cash is received.
b. when it is earned.
c. at the end of the month.
d. in the period that income taxes are paid.
6.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 earned?
a. December 5
b. December 10
c. November 30
d. December 1
7.Under the cash basis of accounting:
a. Revenue is recognized when services are performed.
b. Expenses are matched with the revenue that is produced.
c. cash must be received before revenue is recognized.
d. a promise to pay is sufficient to recognize revenue.
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University
East Carolina University
Subject
Accounting