Question 1

Prepaid 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 2

Adjusting entries are often made because some business events are not recorded as they occur.

Accepted Answer

A) True 
 B)False

Question 3

Employees at Biquell Corporation are paid $15,000 cash every Friday for working Monday through Friday.The calendar year accounting period ends on Wednesday, December 31.How much salaries and wages expense should be recorded two days later on January 2?

Accepted Answer

A) $15,000 
B) $9,000 
C) None, expense recognition requires the weekly salary to be accrued on December 31. 
D) $6,000 
A) $15,000 
B) $9,000 
C) None, expense recognition requires the weekly salary to be accrued on December 31. 
D) $6,000

Question 4

Which of the following accounts would appear in an adjusted trial balance but not a post-closing trial balance?

Accepted Answer

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

Question 5

Given the following adjusted trial balance:   After closing entries have been posted, the balance in retained earnings will be:

Accepted Answer

A) $3,306. 
B) $3,220. 
C) $3,490. 
D) $3,404. 
A) $3,306. 
B) $3,220. 
C) $3,490. 
D) $3,404.

Question 6

A post-closing trial balance will show:

Accepted Answer

A) zero balances for all accounts. 
B) zero balances for balance sheet accounts. 
C) only balance sheet accounts. 
D) only income statement accounts. 
A) zero balances for all accounts. 
B) zero balances for balance sheet accounts. 
C) only balance sheet accounts. 
D) only income statement accounts.

Question 7

A company purchased office supplies costing $5,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $900 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, $5,900; credit Supplies, $5,900. 
B) debit Supplies, $900; credit Supplies Expense, $900. 
C) debit Supplies Expense, $4,100; credit Supplies, $4,100. 
D) debit Supplies, $4,100; credit Supplies Expense, $4,100. 
A) debit Supplies Expense, $5,900; credit Supplies, $5,900. 
B) debit Supplies, $900; credit Supplies Expense, $900. 
C) debit Supplies Expense, $4,100; credit Supplies, $4,100. 
D) debit Supplies, $4,100; credit Supplies Expense, $4,100.

Question 8

Recognizing when an expense contributes to the production of revenue is critical.

Accepted Answer

A) True 
 B)False

Question 9

A 10-column worksheet is a permanent accounting record.

Accepted Answer

A) True 
 B)False

Question 10

Net income is recorded on the worksheet under the:

Accepted Answer

A) debit column of the adjusted trial balance and the credit column of retained earnings. 
B) debit column of the income statement and the credit column of the balance sheet. 
C) credit column of the adjusted trial balance and the debit column of retained earnings. 
D) credit column of the income statement and the debit column of the balance sheet. 
A) debit column of the adjusted trial balance and the credit column of retained earnings. 
B) debit column of the income statement and the credit column of the balance sheet. 
C) credit column of the adjusted trial balance and the debit column of retained earnings. 
D) credit column of the income statement and the debit column of the balance sheet.

Question 11

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 High Country satisfy its performance obligation?

Accepted Answer

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

Question 12

Adjusting entries can be classified as:

Accepted Answer

A) postponements and advances. 
B) accruals and deferrals. 
C) deferrals and postponements. 
D) accruals and advances. 
A) postponements and advances. 
B) accruals and deferrals. 
C) deferrals and postponements. 
D) accruals and advances.

Question 13

Equipment was purchased by Noland Manufacturing on January 1, 2022, for $125,000.Noland's policy is to adjust its accounts at year-end.Which is the appropriate journal entry to record depreciation at year-end if the company expects to use equipment consistently for five years? In the choices below, as per convention, debits are listed first followed by credits.

Accepted Answer

A) Dr Depreciation Expense - Equipment $25,000 Cr Accumulated Depreciation - Equipment $25,000 
B) Dr Accumulated Depreciation - Equipment $25,000 Cr Depreciation Expense - Equipment $25,000 
C) Dr Depreciation Expense - Equipment $25,000 Cr Equipment $25,000 
D) Dr Accumulated Depreciation - Equipment $25,000 Cr Equipment $25,000 
A) Dr Depreciation Expense - Equipment $25,000 Cr Accumulated Depreciation - Equipment $25,000 
B) Dr Accumulated Depreciation - Equipment $25,000 Cr Depreciation Expense - Equipment $25,000 
C) Dr Depreciation Expense - Equipment $25,000 Cr Equipment $25,000 
D) Dr Accumulated Depreciation - Equipment $25,000 Cr Equipment $25,000

Question 14

An adjusting entry made to record accrued interest on a note receivable due next year consists of a:

Accepted Answer

A) debit to Interest Expense and a credit to Interest Payable. 
B) debit to Interest Receivable and a credit to Interest Revenue. 
C) debit to Interest Expense and a credit to Notes Payable. 
D) debit to Interest Expense and a credit to Cash. 
A) debit to Interest Expense and a credit to Interest Payable. 
B) debit to Interest Receivable and a credit to Interest Revenue. 
C) debit to Interest Expense and a credit to Notes Payable. 
D) debit to Interest Expense and a credit to Cash.

Question 15

Accumulated Depreciation is a liability account and has a credit normal account balance.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would not be an application of the revenue recognition or expense recognition principle?

Accepted Answer

A) Recording accrued salaries and wages expense. 
B) Recording accrued interest revenue. 
C) Recording the collection of an advance customer payment as revenue. 
D) Recording prepaid expense adjustments. 
A) Recording accrued salaries and wages expense. 
B) Recording accrued interest revenue. 
C) Recording the collection of an advance customer payment as revenue. 
D) Recording prepaid expense adjustments.

Question 17

Adjusting entries are:

Accepted Answer

A) the same as correcting entries. 
B) needed to ensure that the expense recognition principle is followed. 
C) optional. 
D) rarely needed. 
A) the same as correcting entries. 
B) needed to ensure that the expense recognition principle is followed. 
C) optional. 
D) rarely needed.

Question 18

An accounting period starting on February 1 that is one year long is called a (an):

Accepted Answer

A) fiscal year. 
B) interim period. 
C) calendar year. 
D) multi-period. 
A) fiscal year. 
B) interim period. 
C) calendar year. 
D) multi-period.

Prepaid expenses are:

Adjusting entries are often made because some business events are not recorded as they occur.

Employees at Biquell Corporation are paid $15,000 cash every Friday for working Monday through Friday.The calendar year accounting period ends on Wednesday, December 31.How much salaries and wages expense should be recorded two days later on January 2?

Which of the following accounts would appear in an adjusted trial balance but not a post-closing trial balance?

Given the following adjusted trial balance: After closing entries have been posted, the balance in retained earnings will be:

A post-closing trial balance will show:

A company purchased office supplies costing $5,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $900 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be:

Recognizing when an expense contributes to the production of revenue is critical.

A 10-column worksheet is a permanent accounting record.

Net income is recorded on the worksheet under 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 High Country satisfy its performance obligation?

Adjusting entries can be classified as:

An adjusting entry made to record accrued interest on a note receivable due next year consists of a:

Accumulated Depreciation is a liability account and has a credit normal account balance.

Which of the following would not be an application of the revenue recognition or expense recognition principle?

Adjusting entries are:

An accounting period starting on February 1 that is one year long is called a (an):

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

Prepaid expenses are:

Adjusting entries are often made because some business events are not recorded as they occur.

Employees at Biquell Corporation are paid $15,000 cash every Friday for working Monday through Friday.The calendar year accounting period ends on Wednesday, December 31.How much salaries and wages expense should be recorded two days later on January 2?

Which of the following accounts would appear in an adjusted trial balance but not a post-closing trial balance?

Given the following adjusted trial balance: After closing entries have been posted, the balance in retained earnings will be:

A post-closing trial balance will show:

A company purchased office supplies costing $5,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $900 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be:

Recognizing when an expense contributes to the production of revenue is critical.

A 10-column worksheet is a permanent accounting record.

Net income is recorded on the worksheet under 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 High Country satisfy its performance obligation?

Adjusting entries can be classified as:

An adjusting entry made to record accrued interest on a note receivable due next year consists of a:

Accumulated Depreciation is a liability account and has a credit normal account balance.

Which of the following would not be an application of the revenue recognition or expense recognition principle?

Adjusting entries are:

An accounting period starting on February 1 that is one year long is called a (an):

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