Question 1

The adjusting entry for unearned revenue results in an increase (a debit) to an asset account and an increase (a credit) to a revenue account.

Accepted Answer

A) True 
 B)False  False

Question 2

If a company fails to make an adjusting entry to record supplies expense, then:

Accepted Answer

A) stockholders' equity will be understated. 
B) expense will be understated. 
C) assets will be understated. 
D) net income will be understated. 
A) stockholders' equity will be understated. 
B) expense will be understated. 
C) assets will be understated. 
D) net income will be understated. B

Question 3

Baden Industries borrows $20,000 at 7% annual interest for six months on October 1, 2022.Which is the appropriate entry to accrue interest if Baden employs a December 31, 2022, fiscal year?

Accepted Answer

A) Dr Interest Expense $350 Cr Interest Payable $350 
B) Dr Interest Expense $1,400 Cr Interest Payable $1,400 
C) Dr Interest Expense $350 Cr Notes Payable $350 
D) Dr Notes Payable $1,400 Cr Interest Payable $1,400 
A) Dr Interest Expense $350 Cr Interest Payable $350 
B) Dr Interest Expense $1,400 Cr Interest Payable $1,400 
C) Dr Interest Expense $350 Cr Notes Payable $350 
D) Dr Notes Payable $1,400 Cr Interest Payable $1,400 A

Question 4

Snelling Tables paid employee wages on and through Friday, January 26, and the next payroll will be paid in February.There are three more working days in January (29-31).Employees work 5 days a week and the company pays $1,200 a day in wages.What will be the adjusting entry to accrue wages expense at the end of January?

Accepted Answer

The answer of Snelling Tables paid employee wages on and...

Question 5

The worksheet starts with two columns for the:

Accepted Answer

A) adjustments. 
B) financial statements. 
C) trial balance. 
D) adjusted trial balance. 
A) adjustments. 
B) financial statements. 
C) trial balance. 
D) adjusted trial balance.

Question 6

Franklin Company schedules an appointment with High Country Septic Services on May 2.High Country services Franklin's septic system on May 9 and leaves an invoice at that time.Franklin pays the invoice on May 19.On what date does Franklin satisfy its performance obligation?

Accepted Answer

A) May 2 
B) May 9 
C) May 19 
D) Franklin Company does not have a performance obligation. 
A) May 2 
B) May 9 
C) May 19 
D) Franklin Company does not have a performance obligation.

Question 7

Adjustments for accrued revenues:

Accepted Answer

A) increase assets and increase revenues. 
B) increase assets and increase liabilities. 
C) decrease assets and increase revenues. 
D) decrease liabilities and increase revenues. 
A) increase assets and increase revenues. 
B) increase assets and increase liabilities. 
C) decrease assets and increase revenues. 
D) decrease liabilities and increase revenues.

Question 8

Which is not an application of revenue recognition?

Accepted Answer

A) Recording revenue as an adjusting entry on the last day of the accounting period. 
B) Accepting cash from an established customer for services to be performed over the next three months. 
C) Billing customers on June 30 for services completed during June. 
D) Receiving cash for services performed. 
A) Recording revenue as an adjusting entry on the last day of the accounting period. 
B) Accepting cash from an established customer for services to be performed over the next three months. 
C) Billing customers on June 30 for services completed during June. 
D) Receiving cash for services performed.

Question 9

If a resource has been consumed but a bill has not been received at the end of the accounting period, then:

Accepted Answer

A) an expense should be recorded when the bill is received. 
B) an expense should be recorded when the cash is paid out. 
C) an adjusting entry should be made recognizing the expense. 
D) it is optional whether to record the expense before the bill is received. 
A) an expense should be recorded when the bill is received. 
B) an expense should be recorded when the cash is paid out. 
C) an adjusting entry should be made recognizing the expense. 
D) it is optional whether to record the expense before the bill is received.

Question 10

A company usually determines the amount of supplies used during a period by:

Accepted Answer

A) adding the supplies on hand to the balance of the Supplies account. 
B) summing the amount of supplies purchased during the period. 
C) taking the difference between the supplies purchased and the supplies paid for during the period. 
D) taking the difference between the balance of the Supplies account and the cost of supplies on hand. 
A) adding the supplies on hand to the balance of the Supplies account. 
B) summing the amount of supplies purchased during the period. 
C) taking the difference between the supplies purchased and the supplies paid for during the period. 
D) taking the difference between the balance of the Supplies account and the cost of supplies on hand.

Question 11

Which of the following accounts is neither adjusted nor closed?

Accepted Answer

A) Supplies Expense 
B) Unearned Revenue 
C) Accumulated Depreciation 
D) Cash 
A) Supplies Expense 
B) Unearned Revenue 
C) Accumulated Depreciation 
D) Cash

Question 12

Adjustments for unearned revenue:

Accepted Answer

A) decrease liabilities and increase revenues. 
B) increase liabilities and increase revenues. 
C) increase assets and increase revenues. 
D) decrease revenues and decrease assets. 
A) decrease liabilities and increase revenues. 
B) increase liabilities and increase revenues. 
C) increase assets and increase revenues. 
D) decrease revenues and decrease assets.

Question 13

Which principle dictates that efforts (expenses) be recorded with accomplishments (revenues)?

Accepted Answer

A) Historical cost principle. 
B) Periodicity principle. 
C) Revenue recognition principle. 
D) Expense recognition principle. 
A) Historical cost principle. 
B) Periodicity principle. 
C) Revenue recognition principle. 
D) Expense recognition principle.

Question 14

Mary Richardo, CPA, has billed her clients for services performed.She subsequently receives payments from her clients.What entry will she make upon receipt of the payments?

Accepted Answer

A) Debit Unearned Service Revenue and credit Service Revenue 
B) Debit Cash and credit Accounts Receivable 
C) Debit Accounts Receivable and credit Service Revenue 
D) Debit Cash and credit Service Revenue 
A) Debit Unearned Service Revenue and credit Service Revenue 
B) Debit Cash and credit Accounts Receivable 
C) Debit Accounts Receivable and credit Service Revenue 
D) Debit Cash and credit Service Revenue

Question 15

One of the accounting concepts upon which adjustments for prepayments and accruals are based is:

Accepted Answer

A) expense recognition. 
B) cost. 
C) monetary unit. 
D) economic entity. 
A) expense recognition. 
B) cost. 
C) monetary unit. 
D) economic entity.

Question 16

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

Accepted Answer

A) True 
 B)False

Question 17

Boyce Company purchased office supplies costing $7,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $1,800 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be:

Accepted Answer

A) debit Supplies Expense, $5,200; credit Supplies, $5,200. 
B) debit Supplies, $1,800; credit Supplies Expense, $1,800. 
C) debit Supplies Expense, $1,800; credit Supplies, $1,800. 
D) debit Supplies, $5,200; credit Supplies Expense, $5,200. 
A) debit Supplies Expense, $5,200; credit Supplies, $5,200. 
B) debit Supplies, $1,800; credit Supplies Expense, $1,800. 
C) debit Supplies Expense, $1,800; credit Supplies, $1,800. 
D) debit Supplies, $5,200; credit Supplies Expense, $5,200.

Question 18

In the accounting cycle, closing entries are prepared before adjusting entries.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following items describe the two classifications of adjusting entries?

Accepted Answer

A) Postponements and advances. 
B) Accruals and advances. 
C) Deferrals and postponements. 
D) Accruals and deferrals. 
A) Postponements and advances. 
B) Accruals and advances. 
C) Deferrals and postponements. 
D) Accruals and deferrals.

Question 20

Using accrual accounting, expenses are recorded and reported only:

Accepted Answer

A) when they are incurred whether or not cash is paid. 
B) when they are incurred and paid at the same time. 
C) if they are paid before they are incurred. 
D) if they are paid after they are incurred. 
A) when they are incurred whether or not cash is paid. 
B) when they are incurred and paid at the same time. 
C) if they are paid before they are incurred. 
D) if they are paid after they are incurred.

The adjusting entry for unearned revenue results in an increase (a debit) to an asset account and an increase (a credit) to a revenue account.

If a company fails to make an adjusting entry to record supplies expense, then:

Baden Industries borrows $20,000 at 7% annual interest for six months on October 1, 2022.Which is the appropriate entry to accrue interest if Baden employs a December 31, 2022, fiscal year?

The worksheet starts with two columns for the:

Franklin Company schedules an appointment with High Country Septic Services on May 2.High Country services Franklin's septic system on May 9 and leaves an invoice at that time.Franklin pays the invoice on May 19.On what date does Franklin satisfy its performance obligation?

Adjustments for accrued revenues:

Which is not an application of revenue recognition?

If a resource has been consumed but a bill has not been received at the end of the accounting period, then:

A company usually determines the amount of supplies used during a period by:

Which of the following accounts is neither adjusted nor closed?

Adjustments for unearned revenue:

Which principle dictates that efforts (expenses) be recorded with accomplishments (revenues)?

Mary Richardo, CPA, has billed her clients for services performed.She subsequently receives payments from her clients.What entry will she make upon receipt of the payments?

One of the accounting concepts upon which adjustments for prepayments and accruals are based is:

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

Boyce Company purchased office supplies costing $7,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $1,800 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be:

In the accounting cycle, closing entries are prepared before adjusting entries.

Which of the following items describe the two classifications of adjusting entries?

Using accrual accounting, expenses are recorded and reported only:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 4: Accrual Accounting Concepts

The adjusting entry for unearned revenue results in an increase (a debit) to an asset account and an increase (a credit) to a revenue account.

If a company fails to make an adjusting entry to record supplies expense, then:

Baden Industries borrows $20,000 at 7% annual interest for six months on October 1, 2022.Which is the appropriate entry to accrue interest if Baden employs a December 31, 2022, fiscal year?

The worksheet starts with two columns for the:

Franklin Company schedules an appointment with High Country Septic Services on May 2.High Country services Franklin's septic system on May 9 and leaves an invoice at that time.Franklin pays the invoice on May 19.On what date does Franklin satisfy its performance obligation?

Adjustments for accrued revenues:

Which is not an application of revenue recognition?

If a resource has been consumed but a bill has not been received at the end of the accounting period, then:

A company usually determines the amount of supplies used during a period by:

Which of the following accounts is neither adjusted nor closed?

Adjustments for unearned revenue:

Which principle dictates that efforts (expenses) be recorded with accomplishments (revenues)?

Mary Richardo, CPA, has billed her clients for services performed.She subsequently receives payments from her clients.What entry will she make upon receipt of the payments?

One of the accounting concepts upon which adjustments for prepayments and accruals are based is:

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

Boyce Company purchased office supplies costing $7,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $1,800 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be:

In the accounting cycle, closing entries are prepared before adjusting entries.

Which of the following items describe the two classifications of adjusting entries?

Using accrual accounting, expenses are recorded and reported only:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters