CH3MultipleChoiceQuestions - MULTIPLE CHOICE QUESTIONS...

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MULTIPLE CHOICE QUESTIONS CHAPTER 3 1. Which of the following is a nominal account? a. Prepaid Insurance b. Unearned Revenue c. Insurance Expense d. Interest Receivable 2. Which of the following errors will cause an imbalance in the trial balance? a. Omission of a transaction in the journal b. Posting an entire journal entry twice to the ledger c. Posting a credit of $ 720 to Accounts Payable as a credit of $ 720 to Accounts Receivable. d. Listing the balance of an account with a debit balance in the credit column of the trial balance. 3. Which of the following statements is associated with the accrual basis of accounting? a. The timing of cash receipts and disbursements is emphasized. b. A minimum amount of record keeping is required. c. This method is used less frequently by businesses than the cash method of accounting. d. Revenues are recognized in the period they are earned, regardless of the time period the cash is received. 4. An accrued expense is an expense that: a. Has been incurred but has not been paid. b. Has been paid but has not been incurred. c. Has been incurred for which payment is to be made in installments. d. Will never be paid. 5. In reviewing some adjusting entries, you observe an entry which contains a debit to Prepaid Insurance and a credit to Insurance Expense. The purpose of this journal entry is to record a(n): a. Accrued expense b. Deferred expense c. Expired Cost d. Prepaid Revenue 6. An adjusting entry to record an accrued expense involves a debit to a (n): a. Expense account and a credit to a prepaid account b. Expense account and a credit to cash. c.
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CH3MultipleChoiceQuestions - MULTIPLE CHOICE QUESTIONS...

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