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1. (TCO E) An accounting time period that is one year in length is called (Points : 3)

       a fiscal year.

       an interim period.

       the time period assumption.

       a reporting period. |

2. (TCO E) In a service-type business, revenue is considered earned (Points : 3)

       at the end of the month.

       at the end of the year.

       when the service is performed.

       when cash is received. |

3. (TCO E) On April 1, 2007, M Corporation paid $48,000 cash for equipment that will be used in business operations. The equipment will be used for four years and will have no residual value. M records depreciation expense of $9,000 for the calendar year ending December 31, 2007. Which accounting principle has been violated? (Points : 3)

       Revenue recognition principle

       No principle has been violated because M has correctly matched the expense for using the equipment to the period during which it generated revenue.

       Matching principle because the cash was paid in 2007 and should be expensed in 2007.

       Cost principle |

4. The following is selected information from G Corporation for the fiscal year ending October 31, 2007. Cash received from customers          $150,000

Revenue earned                                 175,000

Cash paid for expenses                        85,000

Expenses incurred,                            100,000(TCO E) Based on the accrual basis of accounting, what is G Corporation's net income for the year ending October 31, 2007?(Points : 3)

       $57,000

       $75,000

       $41,000

       $85,000 |

5. (TCO E)

Adjusting entries are made to ensure that: (Points : 3)

       expense are recognized in the period in which they are incurred.

       revenues are recorded in the period in which they are earned.

       balance sheet and income statement accounts have correct balances at the end of an accounting period.

       All of the above. |

6. (TCO B) The primary source of...