Question 1

An accounting transaction never affects more than one accounting time period.

Accepted Answer

A) True 
 B)False  False

Question 2

Since some costs are not recorded, adjusting entries are necessary.

Accepted Answer

A) True 
 B)False  True

Question 3

Revenue must be recognized when (or as) the company satisfies the performance obligation, regardless of whether or not the transaction price has been determined.

Accepted Answer

A) True 
 B)False  False

Question 4

Presented below is the trial balance and adjusted trial balance for Sandhu Corporation on December 31, 2018.   InstructionsPrepare in journal entry form, with explanations, the adjusting entries that explain the changes in the balances from the trial balance to the adjusted trial balance.

Accepted Answer

The answer of Presented below is the trial balance and...

Question 5

The statement of financial position and income statement can be prepared from the information provided by an adjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 6

The adjusted trial balance of Norfaxx Services Inc. appears below. Using the information from the adjusted trial balance, prepare, for the month ending December 31, 2018:
a. an income statement;
b. a statement of changes in equity; and
c. a classified statement of financial position.

Accepted Answer

The answer of The adjusted trial balance of Norfaxx Services...

Question 7

Which of the following accounts would not likely need to be adjusted at year end?

Accepted Answer

A)  Supplies 
B)  Equipment 
C)  Prepaid Insurance 
D)  Unearned Revenue 
A)  Supplies 
B)  Equipment 
C)  Prepaid Insurance 
D)  Unearned Revenue

Question 8

The purpose of an adjusted trial balance is to ensure all adjusting entries have been recorded.

Accepted Answer

A) True 
 B)False

Question 9

The post-closing trial balance will contain only permanent accounts.

Accepted Answer

A) True 
 B)False

Question 10

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Accepted Answer

A) True 
 B)False

Question 11

Adjusting entries are required

Accepted Answer

A)  because some costs expire with the passage of time, but have not yet been recorded. 
B)  when the company's net income is below budget. 
C)  when expenses are recorded in the period in which they are incurred. 
D)  when revenues are recorded in the period in which they are earned. 
A)  because some costs expire with the passage of time, but have not yet been recorded. 
B)  when the company's net income is below budget. 
C)  when expenses are recorded in the period in which they are incurred. 
D)  when revenues are recorded in the period in which they are earned.

Question 12

When money is received from a customer prior to the delivery of goods or the performance of a service, it is recorded as revenue.

Accepted Answer

A) True 
 B)False

Question 13

An asset-expense relationship exists with

Accepted Answer

A)  liability accounts. 
B)  revenue accounts. 
C)  prepaid expense adjusting entries. 
D)  accrued expense adjusting entries. 
A)  liability accounts. 
B)  revenue accounts. 
C)  prepaid expense adjusting entries. 
D)  accrued expense adjusting entries.

Question 14

Unearned revenues are

Accepted Answer

A)  received and recorded as liabilities before they are earned. 
B)  earned and recorded as liabilities before they are received. 
C)  earned but not yet received or recorded. 
D)  earned and already received and recorded. 
A)  received and recorded as liabilities before they are earned. 
B)  earned and recorded as liabilities before they are received. 
C)  earned but not yet received or recorded. 
D)  earned and already received and recorded.

Question 15

The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000 and represents three months rent starting on November 1. The adjusting entry required on December 31, assuming adjusting entries have not previously been made, is

Accepted Answer

A)  debit Prepaid Rent, $ \$ 4,000 $; credit Rent Expense $ \$ 4,000 $. 
B)  debit Prepaid Rent, $ \$ 8,000 $; credit Rent Expense, $ \$ 8,000 $. 
C)  debit Rent Expense, $ \$ 12,000 $; cre dit Prepaid Rent, $ \$ 12,000 $. 
D)  debit Rent Expense, $ \$ 8,000 $; credit Prepaid Rent, $ \$ 8,000 $. 
A)  debit Prepaid Rent, $ \$ 4,000 $; credit Rent Expense $ \$ 4,000 $. 
B)  debit Prepaid Rent, $ \$ 8,000 $; credit Rent Expense, $ \$ 8,000 $. 
C)  debit Rent Expense, $ \$ 12,000 $; cre dit Prepaid Rent, $ \$ 12,000 $. 
D)  debit Rent Expense, $ \$ 8,000 $; credit Prepaid Rent, $ \$ 8,000 $.

Question 16

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

Accepted Answer

A)  debit Unearned Revenue and credit Cash. 
B)  debit Unearned Revenue and credit Sales. 
C)  credit Unearned Revenue and debit Sales. 
D)  debit Unearned Revenue and credit Accounts Receivable. 
A)  debit Unearned Revenue and credit Cash. 
B)  debit Unearned Revenue and credit Sales. 
C)  credit Unearned Revenue and debit Sales. 
D)  debit Unearned Revenue and credit Accounts Receivable.

Question 17

Deng Corporation's fiscal year ends on June 30. Deng also has a policy of paying their weekly payroll every Friday. Payroll records indicate the following salary costs were incurred late in June and early July:   Instructions 
a. Prepare any necessary adjusting journal entries that should be made at year end on June 30.
b. Prepare the journal entry to record the payment of the payroll on July 2.

Accepted Answer

The answer of Deng Corporation's fiscal year ends on June...

Question 18

Guardian Corp. sells $6,250 of goods on account in the current year and collects $3,250 of this. It incurs $4,200 in expenses on account during the current year and pays $2,600 of them. Guardian would report what amount of net income under the cash and accrual bases of accounting, respectively?

Accepted Answer

A)  $2,050 on the cash basis and $3,000 on the accrual basis 
B)  $3,250 on the cash basis and $4,200 on the accrual basis 
C)  $3,000 on the cash basis and $1,600 on the accrual basis 
D)  $650 on the cash basis and $2,050 on the accrual basis 
A)  $2,050 on the cash basis and $3,000 on the accrual basis 
B)  $3,250 on the cash basis and $4,200 on the accrual basis 
C)  $3,000 on the cash basis and $1,600 on the accrual basis 
D)  $650 on the cash basis and $2,050 on the accrual basis

Question 19

The Jasmine Corporation purchased a notebook computer for $3,600 on December 1. The useful life of the notebook computer is estimated to be 3 years. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

Accepted Answer

A)  debit Depreciation Expense, $1,200; credit Accumulated Depreciation-Equipment, $1,200. 
B)  debit Depreciation Expense, $100; credit Accumulated Depreciation-Equipment, $100. 
C)  debit Accumulated Depreciation-Equipment, $1,200; credit Depreciation Expense, $1,200. 
D)  debit Equipment, $100; credit Accumulated Depreciation-Equipment, $100. 
A)  debit Depreciation Expense, $1,200; credit Accumulated Depreciation-Equipment, $1,200. 
B)  debit Depreciation Expense, $100; credit Accumulated Depreciation-Equipment, $100. 
C)  debit Accumulated Depreciation-Equipment, $1,200; credit Depreciation Expense, $1,200. 
D)  debit Equipment, $100; credit Accumulated Depreciation-Equipment, $100.

Question 20

Expenses paid before being used or consumed are initially recorded as liabilities.

Accepted Answer

A) True 
 B)False

An accounting transaction never affects more than one accounting time period.

Since some costs are not recorded, adjusting entries are necessary.

Revenue must be recognized when (or as) the company satisfies the performance obligation, regardless of whether or not the transaction price has been determined.

Presented below is the trial balance and adjusted trial balance for Sandhu Corporation on December 31, 2018. InstructionsPrepare in journal entry form, with explanations, the adjusting entries that explain the changes in the balances from the trial balance to the adjusted trial balance.

The statement of financial position and income statement can be prepared from the information provided by an adjusted trial balance.

The adjusted trial balance of Norfaxx Services Inc. appears below. Using the information from the adjusted trial balance, prepare, for the month ending December 31, 2018: a. an income statement; b. a statement of changes in equity; and c. a classified statement of financial position.

Which of the following accounts would not likely need to be adjusted at year end?

The purpose of an adjusted trial balance is to ensure all adjusting entries have been recorded.

The post-closing trial balance will contain only permanent accounts.

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Adjusting entries are required

When money is received from a customer prior to the delivery of goods or the performance of a service, it is recorded as revenue.

An asset-expense relationship exists with

Unearned revenues are

The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000 and represents three months rent starting on November 1. The adjusting entry required on December 31, assuming adjusting entries have not previously been made, is

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

Guardian Corp. sells $6,250 of goods on account in the current year and collects $3,250 of this. It incurs $4,200 in expenses on account during the current year and pays $2,600 of them. Guardian would report what amount of net income under the cash and accrual bases of accounting, respectively?

The Jasmine Corporation purchased a notebook computer for $3,600 on December 1. The useful life of the notebook computer is estimated to be 3 years. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

Expenses paid before being used or consumed are initially recorded as liabilities.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 4: Accrual Accounting Concepts

An accounting transaction never affects more than one accounting time period.

Since some costs are not recorded, adjusting entries are necessary.

Revenue must be recognized when (or as) the company satisfies the performance obligation, regardless of whether or not the transaction price has been determined.

Presented below is the trial balance and adjusted trial balance for Sandhu Corporation on December 31, 2018. InstructionsPrepare in journal entry form, with explanations, the adjusting entries that explain the changes in the balances from the trial balance to the adjusted trial balance.

The statement of financial position and income statement can be prepared from the information provided by an adjusted trial balance.

The adjusted trial balance of Norfaxx Services Inc. appears below. Using the information from the adjusted trial balance, prepare, for the month ending December 31, 2018: a. an income statement; b. a statement of changes in equity; and c. a classified statement of financial position.

Which of the following accounts would not likely need to be adjusted at year end?

The purpose of an adjusted trial balance is to ensure all adjusting entries have been recorded.

The post-closing trial balance will contain only permanent accounts.

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Adjusting entries are required

When money is received from a customer prior to the delivery of goods or the performance of a service, it is recorded as revenue.

An asset-expense relationship exists with

Unearned revenues are

The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000 and represents three months rent starting on November 1. The adjusting entry required on December 31, assuming adjusting entries have not previously been made, is

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

Guardian Corp. sells $6,250 of goods on account in the current year and collects $3,250 of this. It incurs $4,200 in expenses on account during the current year and pays $2,600 of them. Guardian would report what amount of net income under the cash and accrual bases of accounting, respectively?

The Jasmine Corporation purchased a notebook computer for $3,600 on December 1. The useful life of the notebook computer is estimated to be 3 years. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

Expenses paid before being used or consumed are initially recorded as liabilities.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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