Question 1

The matching concept

Accepted Answer

A)  addresses the relationship between the journal and the balance sheet 
B)  determines whether the normal balance of an account is a debit or credit 
C)  requires that the dollar amount of debits equal the dollar amount of credits on a trial balance 
D)  states that the revenues and related expenses should be reported in the same period 
A)  addresses the relationship between the journal and the balance sheet 
B)  determines whether the normal balance of an account is a debit or credit 
C)  requires that the dollar amount of debits equal the dollar amount of credits on a trial balance 
D)  states that the revenues and related expenses should be reported in the same period

Question 2

Deferred revenue is revenue that is

Accepted Answer

A)  earned and the cash has been received 
B)  earned but the cash has not been received 
C)  not earned and the cash has not been received 
D)  not earned but the cash has been received 
A)  earned and the cash has been received 
B)  earned but the cash has not been received 
C)  not earned and the cash has not been received 
D)  not earned but the cash has been received

Question 3

Accumulated Depreciation and Depreciation Expense are classified, respectively, as

Accepted Answer

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

Question 4

The entry to adjust for the cost of supplies used during the accounting period is

Accepted Answer

A)  debit Supplies Expense; credit Supplies 
B)  debit Stockholders' Equity; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Stockholders' Equity 
A)  debit Supplies Expense; credit Supplies 
B)  debit Stockholders' Equity; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Stockholders' Equity

Question 5

Match the type of account a-e) with the business transactions that follow.
-Electric bill to be paid next month.

Accepted Answer

A) Prepaid expense 
B) Accrued expense 
C) Unearned revenue 
D) Accrued revenue 
E) None of these 
A) Prepaid expense 
B) Accrued expense 
C) Unearned revenue 
D) Accrued revenue 
E) None of these

Question 6

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

Accepted Answer

A) True 
 B)False

Question 7

On December 31, a business estimates depreciation on equipment used during the first year of operations to be $2,900. a) Journalize the adjusting entry required on December 31. b) If the adjusting entry in a) were omitted, which items would be erroneously stated on 1) the income statement for the year and 2) the balance sheet as of December 31?

Accepted Answer

a)Depreciation Expense
2,900
Accumulated

Question 8

Two income statements for Danielle's Design Services are shown below:
Danielle's Design Services
Income Statements
For Years 1 and 2 Ending December 31   a) Prepare a vertical analysis of Danielle's Design Services income statements.
b) What types of trends are indicated: favorable or unfavorable?
c) What other information would enhance the analysis?

Accepted Answer

a) @#IMG-DLM& ​
b) The vertical analysis shows bot

Question 9

The type of account and normal balance of Prepaid Insurance is

Accepted Answer

A)  asset, credit 
B)  asset, debit 
C)  contra asset, credit 
D)  contra asset, debit 
A)  asset, credit 
B)  asset, debit 
C)  contra asset, credit 
D)  contra asset, debit

Question 10

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry. $$\begin{array} { | c | c | c | } 
\hline \text { Wages Expense } & 4,500 & \
\hline \text { Wages Payable } & & 4,500 \
\hline ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? & & \
\hline
\end{array}$$

Accepted Answer

A)  Record payment of wages. 
B)  Record wages paid last month. 
C)  Record wages paid in advance. 
D)  Record wages expense incurred and to be paid next month. 
A)  Record payment of wages. 
B)  Record wages paid last month. 
C)  Record wages paid in advance. 
D)  Record wages expense incurred and to be paid next month.

Question 11

Which of the following pairs of accounts could not appear in the same adjusting entry?

Accepted Answer

A)  Service Revenue and Unearned Revenue 
B)  Interest Income and Interest Expense 
C)  Rent Expense and Prepaid Rent 
D)  Salaries Payable and Salaries Expense 
A)  Service Revenue and Unearned Revenue 
B)  Interest Income and Interest Expense 
C)  Rent Expense and Prepaid Rent 
D)  Salaries Payable and Salaries Expense

Question 12

Which of the accounting steps in the accounting process below would be completed last?

Accepted Answer

A)  preparing the adjusted trial balance 
B)  posting 
C)  preparing the financial statements 
D)  journalizing 
A)  preparing the adjusted trial balance 
B)  posting 
C)  preparing the financial statements 
D)  journalizing

Question 13

An adjusting entry would adjust an expense account so the expense is reported when incurred.

Accepted Answer

A) True 
 B)False

Question 14

Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as an)

Accepted Answer

A)  asset 
B)  liability 
C)  contra asset 
D)  stockholders' equity 
A)  asset 
B)  liability 
C)  contra asset 
D)  stockholders' equity

Question 15

A contra asset account for Land will normally appear on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of an accrued expense?

Accepted Answer

A)  salary owed but not yet paid 
B)  fees received but not yet earned 
C)  supplies on hand 
D)  a two-year premium paid on a fire insurance policy 
A)  salary owed but not yet paid 
B)  fees received but not yet earned 
C)  supplies on hand 
D)  a two-year premium paid on a fire insurance policy

Question 17

A company pays an employee $3,000 for a five day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

Accepted Answer

A) True 
 B)False

Question 18

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Accepted Answer

A) True 
 B)False

Question 19

Depreciation on equipment for the year is $6,300.
a) Record the journal entry if the company prepares adjustments once a year.
b) Record the journal entry if the company prepares adjustments on a monthly basis.

Accepted Answer

a)Depreciation Expense
Accumul

Question 20

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Accepted Answer

A)  $2,100 
B)  $700 
C)  $2,800 
D)  $1,400 
A)  $2,100 
B)  $700 
C)  $2,800 
D)  $1,400

Exam 3: The Adjusting Process

The matching concept

Deferred revenue is revenue that is

Accumulated Depreciation and Depreciation Expense are classified, respectively, as

The entry to adjust for the cost of supplies used during the accounting period is

Match the type of account a-e) with the business transactions that follow. -Electric bill to be paid next month.

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

The type of account and normal balance of Prepaid Insurance is

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry. Wages Expense 4,500 Wages Payable 4,500 ????????????????

Which of the following pairs of accounts could not appear in the same adjusting entry?

Which of the accounting steps in the accounting process below would be completed last?

An adjusting entry would adjust an expense account so the expense is reported when incurred.

Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as an)

A contra asset account for Land will normally appear on the balance sheet.

Which of the following is an example of an accrued expense?

A company pays an employee $3,000 for a five day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Depreciation on equipment for the year is $6,300. a) Record the journal entry if the company prepares adjustments once a year. b) Record the journal entry if the company prepares adjustments on a monthly basis.

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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