Question 1

Accounts often need to be adjusted because

Accepted Answer

A)  there are never enough accounts to record all the transactions. 
B)  many transactions affect more than one time period. 
C)  there are always errors made in recording transactions. 
D)  management can't decide what they want to report. 
A)  there are never enough accounts to record all the transactions. 
B)  many transactions affect more than one time period. 
C)  there are always errors made in recording transactions. 
D)  management can't decide what they want to report.

Question 2

The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

Accepted Answer

A) True 
 B)False

Question 3

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be

Accepted Answer

A)  debit Unearned Service Revenue and credit Cash. 
B)  debit Unearned Service Revenue and credit Service Revenue. 
C)  debit Unearned Service Revenue and credit Prepaid Expense. 
D)  debit Unearned Service Revenue and credit Accounts Receivable. 
A)  debit Unearned Service Revenue and credit Cash. 
B)  debit Unearned Service Revenue and credit Service Revenue. 
C)  debit Unearned Service Revenue and credit Prepaid Expense. 
D)  debit Unearned Service Revenue and credit Accounts Receivable.

Question 4

The time period assumption states that

Accepted Answer

A)  a transaction can only affect one period of time. 
B)  estimates should not be made if a transaction affects more than one time period. 
C)  adjustments to the company's accounts can only be made in the time period when the business terminates its operations. 
D)  the economic life of a business can be divided into artificial time periods. 
A)  a transaction can only affect one period of time. 
B)  estimates should not be made if a transaction affects more than one time period. 
C)  adjustments to the company's accounts can only be made in the time period when the business terminates its operations. 
D)  the economic life of a business can be divided into artificial time periods.

Question 5

Ryan Adams, an employee of Heartbreaker Corp., will not receive his paycheck until April 2. Based on services performed from March 15 to March 31, his salary was $1,000. The adjusting entry for Heartbreaker Corp. on March 31 is a. Salaries and Wages Expense$\quad$$\quad$1,000
$\quad$Salaries and Wages Payable$\quad$$\quad$1,000
b. No entry is required.$\quad$$\quad$1,000
c. Salaries and Wages Expense$\quad$$\quad$1,000
$\quad$Cash$\quad$$\quad$1,000
d. Salaries and Wages Payable $\quad$$\quad$1,000
$\quad$Cash$\quad$$\quad$1,000

Accepted Answer

The answer of Ryan Adams, an employee of Heartbreaker Corp.,...

Question 6

The time period assumption is also referred to as the

Accepted Answer

A)  calendar assumption. 
B)  cyclicity assumption. 
C)  periodicity assumption. 
D)  fiscal assumption. 
A)  calendar assumption. 
B)  cyclicity assumption. 
C)  periodicity assumption. 
D)  fiscal assumption.

Question 7

In general, the shorter the time period, the difficulty of making the proper adjustments to accounts

Accepted Answer

A)  is increased. 
B)  is decreased. 
C)  is unaffected. 
D)  depends on if there is a profit or loss. 
A)  is increased. 
B)  is decreased. 
C)  is unaffected. 
D)  depends on if there is a profit or loss.

Question 8

Accumulated Depreciation is

Accepted Answer

A)  an expense account. 
B)  a stockholders' equity account. 
C)  a liability account. 
D)  a contra asset account. 
A)  an expense account. 
B)  a stockholders' equity account. 
C)  a liability account. 
D)  a contra asset account.

Question 9

If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future.

Accepted Answer

A) True 
 B)False

Question 10

Expenses incurred but not yet paid or recorded are called

Accepted Answer

A)  prepaid expenses. 
B)  accrued expenses. 
C)  interim expenses. 
D)  unearned expenses. 
A)  prepaid expenses. 
B)  accrued expenses. 
C)  interim expenses. 
D)  unearned expenses.

Question 11

Which of the following statements related to the adjusted trial balance is incorrect?

Accepted Answer

A)  It shows the balances of all accounts at the end of the accounting period. 
B)  It is prepared before adjusting entries have been made. 
C)  It proves the equality of the total debit balances and the total credit balances in the ledger. 
D)  Financial statements can be prepared directly from the adjusted trial balance. 
A)  It shows the balances of all accounts at the end of the accounting period. 
B)  It is prepared before adjusting entries have been made. 
C)  It proves the equality of the total debit balances and the total credit balances in the ledger. 
D)  Financial statements can be prepared directly from the adjusted trial balance.

Question 12

A liability-revenue account relationship exists with an unearned rent revenue adjusting entry.

Accepted Answer

A) True 
 B)False

Question 13

Accrued expenses are

Accepted Answer

A)  paid and recorded in an asset account before they are used or consumed. 
B)  paid and recorded in an asset account after they are used or consumed. 
C)  incurred but not yet paid or recorded. 
D)  incurred and already paid or recorded. 
A)  paid and recorded in an asset account before they are used or consumed. 
B)  paid and recorded in an asset account after they are used or consumed. 
C)  incurred but not yet paid or recorded. 
D)  incurred and already paid or recorded.

Question 14

Which of the following statements concerning accrual-basis accounting is incorrect?

Accepted Answer

A)  Accrual-basis accounting follows the revenue recognition principle. 
B)  Accrual-basis accounting is the method required by generally accepted accounting principles. 
C)  Accrual-basis accounting recognizes expenses when they are paid. 
D)  Accrual-basis accounting follows the expense recognition principle. 
A)  Accrual-basis accounting follows the revenue recognition principle. 
B)  Accrual-basis accounting is the method required by generally accepted accounting principles. 
C)  Accrual-basis accounting recognizes expenses when they are paid. 
D)  Accrual-basis accounting follows the expense recognition principle.

Question 15

Monthly and quarterly time periods are called

Accepted Answer

A)  calendar periods. 
B)  fiscal periods. 
C)  interim periods. 
D)  quarterly periods. 
A)  calendar periods. 
B)  fiscal periods. 
C)  interim periods. 
D)  quarterly periods.

Question 16

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

Accepted Answer

A)  $0. 
B)  $60,000. 
C)  $90,000. 
D)  $150,000. 
A)  $0. 
B)  $60,000. 
C)  $90,000. 
D)  $150,000.

Question 17

Nirvana Corporation issued a one-year, 9%, $400,000 note on April 30, 2015. Interest expense for the year ended December 31, 2015 was

Accepted Answer

A)  $21,000. 
B)  $24,000. 
C)  $27,000. 
D)  $36,000. 
A)  $21,000. 
B)  $24,000. 
C)  $27,000. 
D)  $36,000.

Question 18

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $18,500, and unexpired amounts per analysis of policies of $6,000?

Accepted Answer

A)  Debit Insurance Expense, $6,000; Credit Prepaid Insurance, $6,000. 
B)  Debit Insurance Expense, $18,500; Credit Prepaid Insurance, $18,500. 
C)  Debit Prepaid Insurance, $12,500; Credit Insurance Expense, $12,500. 
D)  Debit Insurance Expense, $12,500; Credit Prepaid Insurance, $12,500. 
A)  Debit Insurance Expense, $6,000; Credit Prepaid Insurance, $6,000. 
B)  Debit Insurance Expense, $18,500; Credit Prepaid Insurance, $18,500. 
C)  Debit Prepaid Insurance, $12,500; Credit Insurance Expense, $12,500. 
D)  Debit Insurance Expense, $12,500; Credit Prepaid Insurance, $12,500.

Question 19

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

Accepted Answer

A)  Cash. 
B)  Prepaid Rent. 
C)  Unearned Rent Revenue. 
D)  Rent Revenue. 
A)  Cash. 
B)  Prepaid Rent. 
C)  Unearned Rent Revenue. 
D)  Rent Revenue.

Question 20

A candy factory's employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in

Accepted Answer

A)  February. 
B)  March. 
C)  the period when the workers receive their checks. 
D)  either in February or March depending on when the pay period ends. 
A)  February. 
B)  March. 
C)  the period when the workers receive their checks. 
D)  either in February or March depending on when the pay period ends.

Accounts often need to be adjusted because

The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be

The time period assumption states that

The time period assumption is also referred to as the

In general, the shorter the time period, the difficulty of making the proper adjustments to accounts

Accumulated Depreciation is

If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future.

Expenses incurred but not yet paid or recorded are called

Which of the following statements related to the adjusted trial balance is incorrect?

A liability-revenue account relationship exists with an unearned rent revenue adjusting entry.

Accrued expenses are

Which of the following statements concerning accrual-basis accounting is incorrect?

Monthly and quarterly time periods are called

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

Nirvana Corporation issued a one-year, 9%, $400,000 note on April 30, 2015. Interest expense for the year ended December 31, 2015 was

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $18,500, and unexpired amounts per analysis of policies of $6,000?

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

A candy factory's employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

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Exam 3: Adjusting the Accounts

Accounts often need to be adjusted because

The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be

The time period assumption states that

The time period assumption is also referred to as the

In general, the shorter the time period, the difficulty of making the proper adjustments to accounts

Accumulated Depreciation is

If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future.

Expenses incurred but not yet paid or recorded are called

Which of the following statements related to the adjusted trial balance is incorrect?

A liability-revenue account relationship exists with an unearned rent revenue adjusting entry.

Accrued expenses are

Which of the following statements concerning accrual-basis accounting is incorrect?

Monthly and quarterly time periods are called

Fugazi City College sold season tickets for the 2015 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

Nirvana Corporation issued a one-year, 9%, $400,000 note on April 30, 2015. Interest expense for the year ended December 31, 2015 was

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $18,500, and unexpired amounts per analysis of policies of $6,000?

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

A candy factory's employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters