Question 1

Which of the following accounts is most likely associated with an accrued expense? 104)

Accepted Answer

A) Accounts Receivable. 
B) Service revenue. 
C) Salaries Payable. 
D) Depreciation expense. 
E) Unearned revenue. 
A) Accounts Receivable. 
B) Service revenue. 
C) Salaries Payable. 
D) Depreciation expense. 
E) Unearned revenue. C

Question 2

How much did Grow pay for insurance during 2018?

Accepted Answer

A) $8,700. 
B) $4,500. 
C) $17,700. 
D) $18,000. 
E) $18,300. 
A) $8,700. 
B) $4,500. 
C) $17,700. 
D) $18,000. 
E) $18,300. D

Question 3

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Accepted Answer

A) True 
 B)False  False

Question 4

Before an adjusting entry for accrued salaries is made, the amount in Salaries Expense is understated and the amount in Salaries Payable is also understated.

Accepted Answer

A) True 
 B)False

Question 5

Earned but uncollected revenues that are recorded during the adjusting process, with a credit to a revenue account and a debit to an expense account, are referred to as accrued expenses.

Accepted Answer

A) True 
 B)False

Question 6

Adjusting entries are used to record the effects of internal economic events

Accepted Answer

A) True 
 B)False

Question 7

BioVert Company had $2,500 of store supplies on hand at the beginning of2015. During 2015 BioVert purchased $250 worth of store supplies. On December 31, 2015, $1,125 worth of store supplies remained. What is the amount of BioVert Company's store supplies expense for 2015?

Accepted Answer

$2,500 + $

Question 8

Before making adjusting entries at the end of an accounting period, some accounts may 3)not show proper financial statement amounts even though all transactions were correctly recorded.

Accepted Answer

A) True 
 B)False

Question 9

The total amount of depreciation recorded for an asset during the entire time the asset has been owned:

Accepted Answer

A) Is shown on the statement of changes in equity. 
B) Is referred to as accumulated depreciation. 
C) Is not shown on the balance sheet. 
D) Is shown on the income statement. 
E) Is recorded in a liability account. 
A) Is shown on the statement of changes in equity. 
B) Is referred to as accumulated depreciation. 
C) Is not shown on the balance sheet. 
D) Is shown on the income statement. 
E) Is recorded in a liability account.

Question 10

The 12-month period that ends when a company's activities are at their lowest point iscalled the:

Accepted Answer

A) Natural business year. 
B) Calendar year. 
C) Fiscal year. 
D) Accounting period. 
E) Interim period. 
A) Natural business year. 
B) Calendar year. 
C) Fiscal year. 
D) Accounting period. 
E) Interim period.

Question 11

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

Accepted Answer

A) Operating expenses. 
B) Unearned expenses. 
C) Accounts payable. 
D) Prepaid expenses. 
E) Accrued expenses. 
A) Operating expenses. 
B) Unearned expenses. 
C) Accounts payable. 
D) Prepaid expenses. 
E) Accrued expenses.

Question 12

On January 1, 2015, Peach Company purchased a five-year insurance policy for $5,000.If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2015 is:

Accepted Answer

A) Debit Prepaid Insurance, $1,000; credit Insurance Expense, $1,000. 
B) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. 
C) Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000. 
D) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. 
E) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. 
A) Debit Prepaid Insurance, $1,000; credit Insurance Expense, $1,000. 
B) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. 
C) Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000. 
D) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. 
E) Debit Insurance Expense, $360; credit Prepaid Insurance, $360.

Question 13

If on January 1 of this year, a company paid $12,000 rent for one year and adjustingentries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1,000.

Accepted Answer

A) True 
 B)False

Question 14

Prepaid expenses may be recorded as debits to expense accounts

Accepted Answer

A) True 
 B)False

Question 15

Due to an oversight, the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31. This oversight would:

Accepted Answer

A) Have no effect on profit 
B) Understate profit by $24,000. 
C) Have no effect on the balance sheet. 
D) Overstate profit by $24,000. 
E) Overstate liabilities. 
A) Have no effect on profit 
B) Understate profit by $24,000. 
C) Have no effect on the balance sheet. 
D) Overstate profit by $24,000. 
E) Overstate liabilities.

Question 16

The natural business year can only be used when the seasonal variation in sales does not match the calendar year.

Accepted Answer

A) True 
 B)False

Question 17

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Accepted Answer

A) Classified balance sheet accounts. 
B) Income statement accounts. 
C) Assets. 
D) Items that require adjusting entries. 
E) Items that require contra accounts. 
A) Classified balance sheet accounts. 
B) Income statement accounts. 
C) Assets. 
D) Items that require adjusting entries. 
E) Items that require contra accounts.

Question 18

Which of the following is not considered a basic type of adjusting entry? 124)

Accepted Answer

A) An entry to convert an asset to a liability. 
B) An entry to accrue unpaid expenses. 
C) An entry to accrue uncollected revenue. 
D) An entry to convert a liability to a revenue. 
E) An entry to convert an asset to an expense. 
A) An entry to convert an asset to a liability. 
B) An entry to accrue unpaid expenses. 
C) An entry to accrue uncollected revenue. 
D) An entry to convert a liability to a revenue. 
E) An entry to convert an asset to an expense.

Question 19

Unearned revenue is reported in the financial statements as

Accepted Answer

A) An asset on the balance sheet. 
B) A revenue on the balance sheet. 
C) A liability on the balance sheet. 
D) An unearned revenue on the income statement. 
E) An operating activity on the statement of cash flows. 
A) An asset on the balance sheet. 
B) A revenue on the balance sheet. 
C) A liability on the balance sheet. 
D) An unearned revenue on the income statement. 
E) An operating activity on the statement of cash flows.

Question 20

Correcting an error always requires two entries

Accepted Answer

A) True 
 B)False

Which of the following accounts is most likely associated with an accrued expense? 104)

How much did Grow pay for insurance during 2018?

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Before an adjusting entry for accrued salaries is made, the amount in Salaries Expense is understated and the amount in Salaries Payable is also understated.

Earned but uncollected revenues that are recorded during the adjusting process, with a credit to a revenue account and a debit to an expense account, are referred to as accrued expenses.

Adjusting entries are used to record the effects of internal economic events

BioVert Company had $2,500 of store supplies on hand at the beginning of2015. During 2015 BioVert purchased $250 worth of store supplies. On December 31, 2015, $1,125 worth of store supplies remained. What is the amount of BioVert Company's store supplies expense for 2015?

Before making adjusting entries at the end of an accounting period, some accounts may 3)not show proper financial statement amounts even though all transactions were correctly recorded.

The total amount of depreciation recorded for an asset during the entire time the asset has been owned:

The 12-month period that ends when a company's activities are at their lowest point iscalled the:

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

On January 1, 2015, Peach Company purchased a five-year insurance policy for $5,000.If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2015 is:

If on January 1 of this year, a company paid $12,000 rent for one year and adjustingentries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1,000.

Prepaid expenses may be recorded as debits to expense accounts

Due to an oversight, the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31. This oversight would:

The natural business year can only be used when the seasonal variation in sales does not match the calendar year.

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Which of the following is not considered a basic type of adjusting entry? 124)

Unearned revenue is reported in the financial statements as

Correcting an error always requires two entries

Accounting in Business

Analyzing and Recording Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Appendix

Filters

Exam 3: Adjusting Accounts for Financial Statements

Which of the following accounts is most likely associated with an accrued expense? 104)

How much did Grow pay for insurance during 2018?

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Before an adjusting entry for accrued salaries is made, the amount in Salaries Expense is understated and the amount in Salaries Payable is also understated.

Earned but uncollected revenues that are recorded during the adjusting process, with a credit to a revenue account and a debit to an expense account, are referred to as accrued expenses.

Adjusting entries are used to record the effects of internal economic events

BioVert Company had $2,500 of store supplies on hand at the beginning of2015. During 2015 BioVert purchased $250 worth of store supplies. On December 31, 2015, $1,125 worth of store supplies remained. What is the amount of BioVert Company's store supplies expense for 2015?

Before making adjusting entries at the end of an accounting period, some accounts may 3)not show proper financial statement amounts even though all transactions were correctly recorded.

The total amount of depreciation recorded for an asset during the entire time the asset has been owned:

The 12-month period that ends when a company's activities are at their lowest point iscalled the:

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

On January 1, 2015, Peach Company purchased a five-year insurance policy for $5,000.If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2015 is:

If on January 1 of this year, a company paid $12,000 rent for one year and adjustingentries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1,000.

Prepaid expenses may be recorded as debits to expense accounts

Due to an oversight, the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31. This oversight would:

The natural business year can only be used when the seasonal variation in sales does not match the calendar year.

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Which of the following is not considered a basic type of adjusting entry? 124)

Unearned revenue is reported in the financial statements as

Correcting an error always requires two entries

Accounting in Business

Analyzing and Recording Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Appendix

Filters