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Hico Co.received a $5,000 cash advance for services to be provided to a customer in the future. Hico Co.received a $5,000 cash advance for services to be provided to a customer in the future.

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(I)(I)(N)(...

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Using the form below,record each of the following 2012 transactions for Craig Corporation: a)Nov.1.Received cash from clients for services to be performed over the next six months,$6,000. b)Nov.1.Paid $600 for a 12-month insurance policy. c)Dec.31.Recorded expiration of two months of the insurance. d)Dec.31.Earned $2,000 of the amount received from clients in November. Using the form below,record each of the following 2012 transactions for Craig Corporation: a)Nov.1.Received cash from clients for services to be performed over the next six months,$6,000. b)Nov.1.Paid $600 for a 12-month insurance policy. c)Dec.31.Recorded expiration of two months of the insurance. d)Dec.31.Earned $2,000 of the amount received from clients in November.

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The amount of net income shown on the December 31,2012 income statement would amount to:


A) $550.
B) $800.
C) $50.
D) $250.

E) A) and D)
F) None of the above

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Give an example of a transaction that decreases a liability and increases equity.

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Performed services f...

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Liu Co.prepaid its fire insurance for three years.The amount of cash paid for the insurance was $21,000. Liu Co.prepaid its fire insurance for three years.The amount of cash paid for the insurance was $21,000.

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(N)(N)(N)(...

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Which of the following accounts is a temporary account?


A) Prepaid Insurance
B) Unearned Subscriptions Revenue
C) Retained Earnings
D) Subscription Revenue

E) A) and C)
F) B) and C)

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The following accounts and balances were drawn from the records of Schultz Company: The following accounts and balances were drawn from the records of Schultz Company: Based on this information,the amount of retained earnings was: A) $9,500 B) $18,500 C) $15,500 D) $22,500 Based on this information,the amount of retained earnings was:


A) $9,500
B) $18,500
C) $15,500
D) $22,500

E) A) and B)
F) A) and C)

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What was Nez's cash flow from operating activities for 2012?


A) $3,600
B) $1,500
C) $4,500
D) $600

E) A) and B)
F) None of the above

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Which of the following lists represents the correct sequence of stages in an accounting cycle?


A) record transactions,prepare statements,adjust accounts,close temporary accounts
B) prepare statements,close temporary accounts,record transactions,adjust accounts
C) close temporary accounts,record transactions,prepare statements,adjust accounts
D) record transactions,adjust accounts,prepare statements,close temporary accounts

E) None of the above
F) All of the above

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Which of the following could describe the effects of a claims exchange transaction on a company's financial statements? Which of the following could describe the effects of a claims exchange transaction on a company's financial statements? A) Choice A B) Choice B C) Choice C D) Choice D


A) Choice A
B) Choice B
C) Choice C
D) Choice D

E) A) and B)
F) A) and C)

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Which of the following does not involve a deferral?


A) receipt of advance fees from clients
B) recording salaries of employees earned but not yet paid
C) payment of six months' rent
D) purchase of supplies on account

E) A) and B)
F) All of the above

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Anderson Book Company shows the following transactions for the accounting period ending December 31,2012: 1)Sold books to customers for $34,000 on account 2)Collected $28,000 from customers 3)Issued common stock for $8,000 cash 4)Prepaid four months rent for $4,400 on October 1,2012 5)Purchase supplies for $10,500 cash 6)Physical count shows $3,250 of supplies left over on December 31,2012 7)Recorded adjustment for prepaid rent used up Show how the above transactions and yearend adjustments affect the financial statement accounts on the accounting equation.After entering all the transactions and adjustments,enter column totals. Anderson Book Company shows the following transactions for the accounting period ending December 31,2012: 1)Sold books to customers for $34,000 on account 2)Collected $28,000 from customers 3)Issued common stock for $8,000 cash 4)Prepaid four months rent for $4,400 on October 1,2012 5)Purchase supplies for $10,500 cash 6)Physical count shows $3,250 of supplies left over on December 31,2012 7)Recorded adjustment for prepaid rent used up Show how the above transactions and yearend adjustments affect the financial statement accounts on the accounting equation.After entering all the transactions and adjustments,enter column totals.

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After closing,the only accounts with non-zero balances are assets,liabilities,and equity.

A) True
B) False

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On November 1,2012,Kelly Rowan received $2,100 in advance for services that she will perform over the next six months.Related to this transaction,list any amounts and the related accounts that will be shown on the following 2012 financial statements after adjustments. a)Balance Sheet b)Income Statement c)Statement of Cash Flows

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Two of the steps in the accounting cycle are adjusting the accounts and closing the accounts.

A) True
B) False

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Harrison and Sons is a law firm.On September 1,2012,Harrison contracted to provide 12 months of legal services to a client.On that date,Harrison collected a $36,000 retainer and began providing services.How much revenue would Harrison report from that client for the year ending December 31,2012?


A) $36,000
B) $12,000
C) $9,000
D) $15,000

E) A) and C)
F) A) and B)

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Total assets on the December 31,2012 balance sheet amounted to


A) $2,650.
B) $3,450.
C) $1,800.
D) $3,150.

E) A) and C)
F) C) and D)

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Which of the following transactions involves a deferral?


A) recording the prepayment of three months' rent
B) recording the interest earned (but not received) on a certificate of deposit
C) recording interest accrued on a note payable
D) recording salaries of employees earned but not yet paid

E) A) and B)
F) A) and C)

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Which of the following is an example of a claims exchange transaction?


A) An asset decreases and an equity account decreases.
B) An asset increases and another asset decreases.
C) A liability increases and an equity account decreases.
D) A liability increases and an equity account also increases.

E) A) and C)
F) A) and B)

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The term "accrual" describes an earnings event that is recognized before cash is paid or received.

A) True
B) False

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