Question 1

Match the terms with the definitions.
-The cost of an asset that is subject to depreciation.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet 
A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 2

The matching principle in accounting requires the matching of

Accepted Answer

A)  revenue earned with the expenses incurred to produce the revenue. 
B)  revenue earned with the assets used to produce the revenue. 
C)  revenue earned with the liabilities incurred to produce the revenue. 
D)  revenue earned with the assets used less the liabilities incurred. 
A)  revenue earned with the expenses incurred to produce the revenue. 
B)  revenue earned with the assets used to produce the revenue. 
C)  revenue earned with the liabilities incurred to produce the revenue. 
D)  revenue earned with the assets used less the liabilities incurred.

Question 3

Supplies originally cost $600, but only $150 worth of supplies were used this period. The adjusting entry would be

Accepted Answer

A)  debit Supplies Expense, $150; credit Supplies, $150. 
B)  debit Supplies Expense, $450; credit Supplies, $450. 
C)  debit Supplies, $150; credit Supplies Expense, $150. 
D)  debit Supplies, $450; credit Supplies Expense, $450. 
A)  debit Supplies Expense, $150; credit Supplies, $150. 
B)  debit Supplies Expense, $450; credit Supplies, $450. 
C)  debit Supplies, $150; credit Supplies Expense, $150. 
D)  debit Supplies, $450; credit Supplies Expense, $450.

Question 4

The 10-column work sheet is used to facilitate the preparation of the income statement, the statement of owner's equity, and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

What does the credit balance in the Accumulated Depreciation account represent?

Accepted Answer

A)  the cost of additional equipment purchased this year 
B)  the amount of depreciation taken in past years 
C)  the cost of existing equipment sold during the year 
D)  the amount of depreciation taken in the current year 
A)  the cost of additional equipment purchased this year 
B)  the amount of depreciation taken in past years 
C)  the cost of existing equipment sold during the year 
D)  the amount of depreciation taken in the current year

Question 6

Match the terms with the definitions.
-The work sheet columns that show the amounts that will be reported in the statement of owner's equity and balance sheet.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet 
A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 7

Match the terms with the definitions.
-The third pair of amount columns on the work sheet. Used to prove the equality of the debits and credits in the general ledger accounts after making all end-of-period adjustments.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet 
A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 8

The historical cost principle allows for assets to be recorded at actual cost.

Accepted Answer

A) True 
 B)False

Question 9

The net income or loss for the year can be found on the work sheet as the balance item at the bottom of either the Balance Sheet columns or the Income Statement columns.

Accepted Answer

A) True 
 B)False

Question 10

Match the terms with the definitions.
-A twelve-month period for which financial reports are prepared.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet 
A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 11

The matching of assets and expenses of a business on a periodic basis is referred to as the matching concept.

Accepted Answer

A) True 
 B)False

Question 12

The second pair of columns on a 10-column work sheet prepared at the end of the period would be the

Accepted Answer

A)  Income Statement columns. 
B)  Trial Balance columns. 
C)  Adjustments columns. 
D)  Adjusted Trial Balance columns. 
A)  Income Statement columns. 
B)  Trial Balance columns. 
C)  Adjustments columns. 
D)  Adjusted Trial Balance columns.

Question 13

Under the cash basis of accounting, a certain expense may be incurred in one period but not entered until the following period.

Accepted Answer

A) True 
 B)False

Question 14

Adjusting entries may affect the cash account.

Accepted Answer

A) True 
 B)False

Question 15

The ____________________ is a method of accounting under which revenues are recorded when paid by customers and expenses are recorded when cash is paid.

Accepted Answer

cash basis

Question 16

Match the terms with the definitions.
-An account with a credit balance that is deducted from the related asset account on the balance sheet.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet 
A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 17

The matching principle offers the best measure of net income.

Accepted Answer

A) True 
 B)False

Question 18

Match the terms with the definitions.
-A principle that requires the matching of revenues earned during an accounting period with the expenses incurred to produce the revenues.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet 
A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 19

When an account balance is not affected by an adjusting entry, the amount shown in the Trial Balance columns is extended directly to the Adjusted Trial Balance columns.

Accepted Answer

A) True 
 B)False

Question 20

The formula to calculate straight-line depreciation is depreciable cost times the expected life of the asset.

Accepted Answer

A) True 
 B)False

Exam 5: Adjusting Entries and the Work Sheet

Match the terms with the definitions. -The cost of an asset that is subject to depreciation.

The matching principle in accounting requires the matching of

Supplies originally cost $600, but only $150 worth of supplies were used this period. The adjusting entry would be

The 10-column work sheet is used to facilitate the preparation of the income statement, the statement of owner's equity, and the balance sheet.

What does the credit balance in the Accumulated Depreciation account represent?

Match the terms with the definitions. -The work sheet columns that show the amounts that will be reported in the statement of owner's equity and balance sheet.

Match the terms with the definitions. -The third pair of amount columns on the work sheet. Used to prove the equality of the debits and credits in the general ledger accounts after making all end-of-period adjustments.

The historical cost principle allows for assets to be recorded at actual cost.

The net income or loss for the year can be found on the work sheet as the balance item at the bottom of either the Balance Sheet columns or the Income Statement columns.

Match the terms with the definitions. -A twelve-month period for which financial reports are prepared.

The matching of assets and expenses of a business on a periodic basis is referred to as the matching concept.

The second pair of columns on a 10-column work sheet prepared at the end of the period would be the

Under the cash basis of accounting, a certain expense may be incurred in one period but not entered until the following period.

Adjusting entries may affect the cash account.

The ____________________ is a method of accounting under which revenues are recorded when paid by customers and expenses are recorded when cash is paid.

Match the terms with the definitions. -An account with a credit balance that is deducted from the related asset account on the balance sheet.

The matching principle offers the best measure of net income.

Match the terms with the definitions. -A principle that requires the matching of revenues earned during an accounting period with the expenses incurred to produce the revenues.

When an account balance is not affected by an adjusting entry, the amount shown in the Trial Balance columns is extended directly to the Adjusted Trial Balance columns.

The formula to calculate straight-line depreciation is depreciable cost times the expected life of the asset.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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