Question 1

If the debit portion of an adjusting entry is to an asset account, then the credit portion must be to a liability account.

Accepted Answer

A) True 
 B)False

Question 2

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Accepted Answer

A) Fees Earned 
B) Accounts Receivable 
C) Unearned Fees 
D) Depreciation Expense 
A) Fees Earned 
B) Accounts Receivable 
C) Unearned Fees 
D) Depreciation Expense

Question 3

Which of the following is not a characteristic of the accrual basis of accounting?

Accepted Answer

A) revenues and expenses are reported in the period in which cash is received or paid 
B) revenues are reported when services have been performed or products have been delivered to customers 
C) accrual basis of accounting supports the matching concept 
D) expenses are reported in the same period as the revenues to which they relate 
A) revenues and expenses are reported in the period in which cash is received or paid 
B) revenues are reported when services have been performed or products have been delivered to customers 
C) accrual basis of accounting supports the matching concept 
D) expenses are reported in the same period as the revenues to which they relate

Question 4

For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs.

Accepted Answer

A) True 
 B)False

Question 5

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

Accepted Answer

A) Record supplies used. 
B) Record purchase of supplies. 
C) Reduce supplies expense. 
D) Record sale of supplies. 
A) Record supplies used. 
B) Record purchase of supplies. 
C) Reduce supplies expense. 
D) Record sale of supplies.

Question 6

DogMart Company records depreciation for equipment. Depreciation for the period ending December 31 is $1,400 for office equipment
and $2,650 for production equipment. Prepare the two entries to record the depreciation.

Accepted Answer

The answer of DogMart Company records depreciation for equipment. Depreciation...

Question 7

If the effect of the credit portion of an adjusting entry is to increase the balance of a revenue account, which of the following describes the effect of the debit portion of the entry?

Accepted Answer

A) increases the balance of a contra revenue account 
B) decreases the balance of an asset account 
C) increases the balance of a stockholders' equity account 
D) decreases the balance of a liability account 
A) increases the balance of a contra revenue account 
B) decreases the balance of an asset account 
C) increases the balance of a stockholders' equity account 
D) decreases the balance of a liability account

Question 8

Explain the difference between accrual basis accounting and cash basis accounting.

Accepted Answer

Accrual basis accounting reports revenue

Question 9

Generally accepted accounting principles require that companies use the ____ of accounting.

Accepted Answer

A) cash basis 
B) deferral basis 
C) accrual basis 
D) account basis 
A) cash basis 
B) deferral basis 
C) accrual basis 
D) account basis

Question 10

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry.

Accepted Answer

A) Record payment of taxes. 
B) Record taxes expense incurred and to be paid in next period. 
C) Record taxes paid in advance. 
D) Record tax bill received from government. 
A) Record payment of taxes. 
B) Record taxes expense incurred and to be paid in next period. 
C) Record taxes paid in advance. 
D) Record tax bill received from government.

Question 11

Smokey Company purchases a one-year insurance policy on July 1 for $3,600. The adjusting entry on December 31 is

Accepted Answer

A) debit Insurance Expense, $1,800; credit Prepaid Insurance, $1,800 
B) debit Insurance Expense, $1,500; credit Prepaid Insurance, $1,500 
C) debit Insurance Expense, $2,100; credit Prepaid Insurance, $2,100 
D) debit Prepaid Insurance, $1,800; credit Cash, $1,800 
A) debit Insurance Expense, $1,800; credit Prepaid Insurance, $1,800 
B) debit Insurance Expense, $1,500; credit Prepaid Insurance, $1,500 
C) debit Insurance Expense, $2,100; credit Prepaid Insurance, $2,100 
D) debit Prepaid Insurance, $1,800; credit Cash, $1,800

Question 12

Depreciation on an office building is $2,800. The adjusting entry on December 31 would be

Accepted Answer

The answer of Depreciation on an office building is $2,800....

Question 13

If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account, which of the following describes the effect of the debit portion of the entry?

Accepted Answer

A) increases the balance of a contra expense account 
B) increases the balance of a stockholders' equity account 
C) decreases the balance of an asset account 
D) decreases the balance of a liability account 
A) increases the balance of a contra expense account 
B) increases the balance of a stockholders' equity account 
C) decreases the balance of an asset account 
D) decreases the balance of a liability account

Question 14

For each of the following, journalize the necessary adjusting entry:
(a)A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that the fiscal period ends (1) on Tuesday, (2) on Wednesday.(b)The balance in the prepaid insurance account before adjustment at the end of the year is $18,000. Journalize the adjusting entry required under each of the following alternatives: (1) the amount of insurance expired during the year is $5,300, (2) the amount of unexpired insurance applicable to a future period is $2,700.(c)On July 1 of the current year, a business pays $54,000 to the city for license taxes for the coming fiscal year. The same business is also required to pay an annual property tax at the end of the year. The estimated amount of the current year's property tax allocated to July is $4,800. (1) Journalize the two adjusting entries required to bring the accounts affected by the taxes up to date as of July 31. (2) What is the amount of tax expense for July?
(d)The estimated depreciation on equipment for the year is $32,000.

Accepted Answer

The answer of For each of the following, journalize the...

Question 15

Match the type of account (a - e) with the business transactions that follow.
-Annual property taxes that are paid at the end of the year.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 16

Which account would normally not require an adjusting entry?

Accepted Answer

A) Wages Expense 
B) Accounts Receivable 
C) Accumulated Depreciation 
D) Cash 
A) Wages Expense 
B) Accounts Receivable 
C) Accumulated Depreciation 
D) Cash

Question 17

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

Accepted Answer

A) Record payment of fees earned. 
B) Record fees earned at the end of the month. 
C) Record fees that have not been earned at the end of the month. 
D) Record payment of fees to be earned. 
A) Record payment of fees earned. 
B) Record fees earned at the end of the month. 
C) Record fees that have not been earned at the end of the month. 
D) Record payment of fees to be earned.

Question 18

On March 1, a business paid $3,600 for a twelve-month liability insurance policy. On April 1, the business entered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts:
(a) insurance expense for the month of March
(b) balance in prepaid insurance as of March 31
(c) equipment rent expense for the month of April
(d) balance in prepaid equipment rental as of April 30

Accepted Answer

The answer of On March 1, a business paid $3,600...

Question 19

Using the following account balances for Garry's Tree Service, prepare a trial balance.​

Accepted Answer

The answer of Using the following account balances for Garry's...

Question 20

Zoey Bella Corp. has a payroll of $10,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. Prepare the adjusting entry on December 31 assuming the year ends on Thursday.​

Accepted Answer

$10,000/5

Exam 3: The Adjusting Process

If the debit portion of an adjusting entry is to an asset account, then the credit portion must be to a liability account.

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Which of the following is not a characteristic of the accrual basis of accounting?

For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs.

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

DogMart Company records depreciation for equipment. Depreciation for the period ending December 31 is $1,400 for office equipment and $2,650 for production equipment. Prepare the two entries to record the depreciation.

If the effect of the credit portion of an adjusting entry is to increase the balance of a revenue account, which of the following describes the effect of the debit portion of the entry?

Explain the difference between accrual basis accounting and cash basis accounting.

Generally accepted accounting principles require that companies use the ____ of accounting.

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry.

Smokey Company purchases a one-year insurance policy on July 1 for $3,600. The adjusting entry on December 31 is

Depreciation on an office building is $2,800. The adjusting entry on December 31 would be

If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account, which of the following describes the effect of the debit portion of the entry?

Match the type of account (a - e) with the business transactions that follow. -Annual property taxes that are paid at the end of the year. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Which account would normally not require an adjusting entry?

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

Using the following account balances for Garry's Tree Service, prepare a trial balance.​

Zoey Bella Corp. has a payroll of $10,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. Prepare the adjusting entry on December 31 assuming the year ends on Thursday.​

Introduction to Accounting and Business

Analyzing Transactions

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters

Using the following account balances for Garry's Tree Service, prepare a trial balance.

Zoey Bella Corp. has a payroll of $10,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. Prepare the adjusting entry on December 31 assuming the year ends on Thursday.