Question 1

Which of the following is an example of a prepaid expense?

Accepted Answer

A) Supplies 
B) Accounts Receivable 
C) Unearned Subscriptions 
D) Unearned Fees 
A) Supplies 
B) Accounts Receivable 
C) Unearned Subscriptions 
D) Unearned Fees

Question 2

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.

Accepted Answer

Salaries Expense [($

Question 3

The matching principle supports matching expenses with the related revenues.

Accepted Answer

A) True 
 B)False

Question 4

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Accepted Answer

The purpose of an adjusted trial balance

Question 5

Using accrual accounting, revenues are recorded

Accepted Answer

A) when cash is received without regard to when the services are performed or products have been delivered to customers 
B) when a service has been performed or products have been delivered to customers without regard to when cash is received 
C) when cash is received at the time services are performed or products have been delivered to customers 
D) only if cash is received after the services are performed or products have been delivered to customers 
A) when cash is received without regard to when the services are performed or products have been delivered to customers 
B) when a service has been performed or products have been delivered to customers without regard to when cash is received 
C) when cash is received at the time services are performed or products have been delivered to customers 
D) only if cash is received after the services are performed or products have been delivered to customers

Question 6

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

Accepted Answer

A) True 
 B)False

Question 7

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

Question 8

Supplies are recorded as assets when purchased. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies

Accepted Answer

A) still on hand 
B) purchased 
C) used 
D) required for the next accounting period 
A) still on hand 
B) purchased 
C) used 
D) required for the next accounting period

Question 9

A fixed asset's market value is reflected on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

The balance in the supplies account before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

Accepted Answer

A) debit Supplies, $1,500; credit Supplies Expense, $1,500 
B) debit Supplies Expense, $4,750; credit Supplies, $4,750 
C) debit Supplies Expense, $1,500; credit Supplies, $1,500 
D) debit Supplies, $4,750; credit Supplies Expense, $4,750 
A) debit Supplies, $1,500; credit Supplies Expense, $1,500 
B) debit Supplies Expense, $4,750; credit Supplies, $4,750 
C) debit Supplies Expense, $1,500; credit Supplies, $1,500 
D) debit Supplies, $4,750; credit Supplies Expense, $4,750

Question 11

Which of the following is an example of accrued revenue?

Accepted Answer

A) snow removal services that have been paid for three months in advance 
B) snow removal services that have been provided but have not been billed or paid 
C) an agreement that has been signed for snow removal services for the next three months 
D) snow removal services that have been provided and paid on the same day 
A) snow removal services that have been paid for three months in advance 
B) snow removal services that have been provided but have not been billed or paid 
C) an agreement that has been signed for snow removal services for the next three months 
D) snow removal services that have been provided and paid on the same day

Question 12

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Accepted Answer

A) $2,100 
B) $700 
C) $2,800 
D) $1,400 
A) $2,100 
B) $700 
C) $2,800 
D) $1,400

Question 13

On December 15, Great Designs Company hired an independent contractor for a project. The contractor completed the project on December 29 and submitted an invoice for $2,425 which was due on January 15. The amount was duly paid on January 15.​
(a) Prepare the journal entry or entries necessary to record these transactions.(b) Explain why you prepared this/these journal entries.

Accepted Answer

The answer of On December 15, Great Designs Company hired...

Question 14

On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.

Accepted Answer

Jan. 1
Prepaid Rent

Question 15

Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

Accepted Answer

A) debit Salaries Payable, $12,000; credit Cash, $12,000 
B) debit Salary Expense, $12,000; credit Dividends, $12,000 
C) debit Salary Expense, $12,000; credit Salaries Payable, $12,000 
D) debit Dividends, $12,000; credit Cash, $12,000 
A) debit Salaries Payable, $12,000; credit Cash, $12,000 
B) debit Salary Expense, $12,000; credit Dividends, $12,000 
C) debit Salary Expense, $12,000; credit Salaries Payable, $12,000 
D) debit Dividends, $12,000; credit Cash, $12,000

Question 16

The account type and normal balance of Unearned Revenue is

Accepted Answer

A) revenue, credit 
B) expense, debit 
C) liability, credit 
D) asset, debit 
A) revenue, credit 
B) expense, debit 
C) liability, credit 
D) asset, debit

Question 17

A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Accepted Answer

A) True 
 B)False

Question 18

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Accepted Answer

A) True 
 B)False

Question 19

What effect will this adjustment have on the accounting records?

Accepted Answer

A) increase net income 
B) increase revenues reported for the period 
C) decrease liabilities 
D) all of these are true 
A) increase net income 
B) increase revenues reported for the period 
C) decrease liabilities 
D) all of these are true

Question 20

Match the type of account (a - e) with the business transactions that follow.
-A contract to provide tutoring services beginning next month was signed.
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 -...

Exam 3: The Adjusting Process

Which of the following is an example of a prepaid expense?

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.

The matching principle supports matching expenses with the related revenues.

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Using accrual accounting, revenues are recorded

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

Using accrual accounting, expenses are recorded and reported only

Supplies are recorded as assets when purchased. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies

A fixed asset's market value is reflected on the balance sheet.

The balance in the supplies account before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

Which of the following is an example of accrued revenue?

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.

Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

The account type and normal balance of Unearned Revenue is

A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

What effect will this adjustment have on the accounting records?

Match the type of account (a - e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

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

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