Question 1

Which of the following errors would cause the adjusted trial balance to not balance?

Accepted Answer

A)  failure to post one side of a journal entry 
B)  omitting the adjusting entry for depreciation expense 
C)  posting the debit for accrued interest to insurance expense 
D)  reversing the debits and credits in an adjusting entry 
A)  failure to post one side of a journal entry 
B)  omitting the adjusting entry for depreciation expense 
C)  posting the debit for accrued interest to insurance expense 
D)  reversing the debits and credits in an adjusting entry

Question 2

The accounting cycle describes a process that includes all of the following except ________.

Accepted Answer

A)  recording business transactions 
B)  aggregating business transactions into the financial statements 
C)  creating a road map of events 
D)  summarizing business transactions into the financial statements 
A)  recording business transactions 
B)  aggregating business transactions into the financial statements 
C)  creating a road map of events 
D)  summarizing business transactions into the financial statements

Question 3

Formally recording the transaction in the accounting system is an example of ________.

Accepted Answer

A)  posting 
B)  journalizing 
C)  preparing 
D)  closing 
A)  posting 
B)  journalizing 
C)  preparing 
D)  closing

Question 4

Boston Corporation purchased two insurance policies during the current year. On February 1, 2018 the company purchased a two-year liability policy for $18,000. On May 1, 2018 it purchased a one year automobile policy for $7,200. These payments were charged to insurance expense. Boston Company has a fiscal year end of June 30.
Required:
1. How much insurance expense should be recognized from these policies on June 30, 2018?
2. What adjusting entry will be required on June 30, 2018?

Accepted Answer

1. The company should recognize $4,950 i

Question 5

Which of the following transactions would never be reversed in the following period?

Accepted Answer

A)  accrual of interest revenue 
B)  accrual of wages expense 
C)  assignment of depreciation expense 
D)  accrual of interest expense 
A)  accrual of interest revenue 
B)  accrual of wages expense 
C)  assignment of depreciation expense 
D)  accrual of interest expense

Question 6

The December 31 financial statements of Jagger Company included the effects of the following transactions recorded on December 31:
a. Wages of $6,800 were recorded. These wages will be paid on January 2.
b. Interest expense of $750 that will be paid on February 1 was recorded.
c. Interest revenue of $300 that will be paid on March 1 was recorded.
Required: Prepare the reversing entries for these transactions.

Accepted Answer

None

Question 7

If service revenue is $260,000, total expenses are $175,000, additional capital stock issued of $13,000 and dividends declared are $4,000, what is the change in retained earnings as a result of the closing process?

Accepted Answer

A)  an increase of $260,000 
B)  an increase of $81,000 
C)  an increase of $4,000 
D)  an increase of $9,000 
A)  an increase of $260,000 
B)  an increase of $81,000 
C)  an increase of $4,000 
D)  an increase of $9,000

Question 8

If the total of all debit entries equals the total of all credit entries on the unadjusted trial balance, all transactions have been correctly recorded.

Accepted Answer

A) True 
 B)False

Question 9

All of the following accounts are temporary accounts except ________.

Accepted Answer

A)  Gain on Sale of Equipment 
B)  Sales Revenue 
C)  Dividends Payable 
D)  Interest Expense 
A)  Gain on Sale of Equipment 
B)  Sales Revenue 
C)  Dividends Payable 
D)  Interest Expense

Question 10

Helmsley Corporation received one year's rent in advance on a warehouse. This transaction results in a(n) ________.

Accepted Answer

A)  expense 
B)  liability 
C)  asset 
D)  revenue 
A)  expense 
B)  liability 
C)  asset 
D)  revenue

Question 11

In transferring information to the general ledger, the reference column in the ledger contains the ________.

Accepted Answer

A)  chronological order of the entry 
B)  general journal page number 
C)  account abbreviation 
D)  general ledger page number 
A)  chronological order of the entry 
B)  general journal page number 
C)  account abbreviation 
D)  general ledger page number

Question 12

Jackson Company sold land that had been held for future plant expansion for more than its carrying value. This transaction results in a(n) ________.

Accepted Answer

A)  revenue 
B)  expense 
C)  gain 
D)  loss 
A)  revenue 
B)  expense 
C)  gain 
D)  loss

Question 13

If a company fails to adjust a deferred revenue recorded as a liability, liabilities will be overstated on the income statement.

Accepted Answer

A) True 
 B)False

Question 14

The normal balance of a liability account is a debit.

Accepted Answer

A) True 
 B)False

Question 15

Bradley Company paid $25,000 in dividends to its shareholders. This transaction ________.

Accepted Answer

A)  increased expenses 
B)  decreased revenues 
C)  increased liabilities 
D)  decreased shareholders' equity 
A)  increased expenses 
B)  decreased revenues 
C)  increased liabilities 
D)  decreased shareholders' equity

Question 16

Heartland Corporation records all insurance premiums as prepaid insurance. Additional information for the current year is presented below: $$\begin{array} { | l | r | } 
\hline \text { Prepaid Insurance, January 1 } & \$ 62,000 \
\hline \text { Insurance expense for year } & \$ 200,000 \
\hline \text { Prepaid Insurance, December 31 } & \$ 80,000 \
\hline
\end{array}$$ What were the total amount of insurance premiums paid during the year?

Accepted Answer

A)  $280,000 
B)  $218,000 
C)  $142,000 
D)  $200,000 
A)  $280,000 
B)  $218,000 
C)  $142,000 
D)  $200,000

Question 17

The adjusted trial balance includes only permanent accounts.

Accepted Answer

A) True 
 B)False

Question 18

Accounts are presented in the general ledger in the same order as they are presented in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Accrued revenues are earned before they are received.

Accepted Answer

A) True 
 B)False

Question 20

If an unearned revenue is initially recorded as a liability, the end-of-period adjusting entry records the unearned portion.

Accepted Answer

A) True 
 B)False

Exam 4: Review of the Accounting Cycle

Which of the following errors would cause the adjusted trial balance to not balance?

The accounting cycle describes a process that includes all of the following except ________.

Formally recording the transaction in the accounting system is an example of ________.

Which of the following transactions would never be reversed in the following period?

If service revenue is $260,000, total expenses are $175,000, additional capital stock issued of $13,000 and dividends declared are $4,000, what is the change in retained earnings as a result of the closing process?

If the total of all debit entries equals the total of all credit entries on the unadjusted trial balance, all transactions have been correctly recorded.

All of the following accounts are temporary accounts except ________.

Helmsley Corporation received one year's rent in advance on a warehouse. This transaction results in a(n) ________.

In transferring information to the general ledger, the reference column in the ledger contains the ________.

Jackson Company sold land that had been held for future plant expansion for more than its carrying value. This transaction results in a(n) ________.

If a company fails to adjust a deferred revenue recorded as a liability, liabilities will be overstated on the income statement.

The normal balance of a liability account is a debit.

Bradley Company paid $25,000 in dividends to its shareholders. This transaction ________.

The adjusted trial balance includes only permanent accounts.

Accounts are presented in the general ledger in the same order as they are presented in the balance sheet.

Accrued revenues are earned before they are received.

If an unearned revenue is initially recorded as a liability, the end-of-period adjusting entry records the unearned portion.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

The Statement of Cash Flows

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