Financial Accounting > QUESTIONS & ANSWERS > Capella University - ACCOUNTING UNIT 2 MILESTONE GRADED A (All)

Capella University - ACCOUNTING UNIT 2 MILESTONE GRADED A

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Which of the following correctly shows a balance sheet? CONCEPT Balance Sheet 2 Which of the following is NOT true of an income statement?  Is of interest to potential shareholders  Is one indicator of the general health of a company  Shows a company's profitability for a specific period of time  Lists the company's liabilities CONCEPT Income Statement 3 As she performs the closing process, which step did Lily complete directly before determining the balance of the income summary account?  Making the drawing closing entry  Preparing an earnings summary  Preparing a post closing trial balance  Making the revenue closing entry CONCEPT Closing Entries 4 If a company had a beginning balance of $69,000 on its statement of changes in owner's equity, the owner had drawings of $15,000 and the ending balance was $76,000, how much net income was recorded?  $22,000  $76,000  $91,000  $61,000 CONCEPT Preparing Statements of Changes in Owner's Equity 5 Which of the following statements is true for a multi-step income statement?  Includes temporary and permanent accounts  Shows the amount of equity  Shows a higher net income  Has subtotals for gross profit and operating income CONCEPT Preparing Income Statements 6 Jody purchased a 12-month liability insurance policy on December 1, 2013 for $12,000. Based on the partial worksheet shown above, what adjustment will Jody make on December 31, 2013?  A debit to Prepaid Insurance for $12,000, and a credit to Insurance Expense for $12,000.  A debit to Insurance Expense for $12,000, and a credit to Prepaid Insurance for $12,000.  A debit to Prepaid Insurance for $1,000, and a credit to Insurance Expense for $1,000.  A debit to Insurance Expense for $1,000, and a credit to Prepaid Insurance for $1,000. CONCEPT Creating Adjusting Entries 7 If Karla spent $200 on Wednesday to have the windows in her building washed, recorded the accounting event that afternoon and on Friday paid $550 for a repair to the water heater and recorded that event on Friday evening, which of the accounting principles below is she following?  Full Disclosure Principle  Time Period Principle  Cost Principle  Expense Recognition Principle CONCEPT Conceptual Framework and Principles 8 A car valued at $30,000 has $600 of depreciation to be adjusted as of January 31st. Which entry should be made?  Debit Car, Credit Depreciation, both for $600  Credit Accumulated Depreciation, Debit Depreciation Expense, both for $600  Debit Accumulated Depreciation, Credit Depreciation Expense, both for $600  Debit Accumulated Depreciation, Credit Car, both for $600

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