196.If unearned revenues are initially recorded in revenue accounts and have
not
all been earned at the end of the accounting period, then failure to make an adjusting entry will cause
a.liabilities to be overstated.
b.revenues to be understated.
c.revenues to be overstated.
d.accounts receivable to be overstated.
a197.On January 2, 2014, National Credit and Cash purchased a general liability insurance policy for ?4,800 for coverage for the calendar year. The entire ?4,800 was charged to Insurance Expense on January 2, 2014. If the firm prepares monthly financial statements, the proper adjusting entry on January 31, 2014, will be:
a.Insurance Expense....................................4,400
Prepaid Insurance...........................................4,400
b.Prepaid Insurance.....................................4,400
Insurance Expense..........................................4,400
c.Insurance Expense....................................400
Prepaid Insurance...........................................400
d.Prepaid Insurance.....................................400
Insurance Expense..........................................400
a
198.Information that is presented in a clear fashion, so that reasonably informed users of thatinformation can interpret it is an example of
a.relevance.
b.faithful representation.
c.understandability.
d.comparability.
a
199.Accounting information should be verifiable in order to enhance
a.comparability.
b.faithful representation.
c.consistency.
d.relevance.
a
200.If accounting information has relevance, it is useful in making predictions about
a.future tax audits.
b.new accounting principles.
c.foreign currency exchange rates.
d.the future events of a company.
a
201.Which one of the following is not an enhancing quality of useful information?
a.Timelines
b.Understand ability
c.Monetary Unit
d.Comparability
a
202.All of the following are characteristics of accounting information
except
a.faithful representation.
b.comparability.
c.relevance.
d.flexibility.
a
203.The two fundamental qualities of useful information are
a.verifiability and timeliness.
b.relevance and faithful representation.
c.comparability and flexibility.
d.understandability and consistency.
a
204.Relevant accounting information
a.is information that has been audited.
b.must be reported within the operating cycle or one year, whichever is longer.
c.has been objectively determined.
d.is information that is capable of making a difference in a business decision.
a
205.Characteristics associated with relevant accounting information are
a.comparability and timeliness.
b.predictive value and confirmatory value.
c.neutral and verifiable.
d.consistency and understandability.