Financial Statements and Accounting Principles Quiz
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Questions and Answers

Who has primary responsibility for the information contained in the financial statements?

  • The SEC
  • The company's management (correct)
  • The company's investors
  • The company's auditors

    • After adjusting entries, what are the correct account balances for prepaid insurance and insurance expense?

  • Prepaid insurance $8,400, and Insurance expense $1,200 (correct)
  • Prepaid insurance $7,200, and Insurance expense $2,400
  • Prepaid insurance $0, and Insurance expense $9,600
  • Prepaid insurance $9,600, and Insurance expense $0

    • What is the result of equipment purchased with cash?

  • Total assets decrease
  • Current assets do not change (correct)
  • Stockholders' equity does not change
  • Current assets increase

    • How is an uncollectible account written off?

    <p>Includes a credit to Allowance for Uncollectible Accounts</p> Signup and view all the answers

    What happens to amounts over 90 days past due, based on the year-end review of Accounts Receivable?

    <p>They are written off</p> Signup and view all the answers

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