Question 1

An adjusted trial balance

Accepted Answer

A) is prepared after the financial statements are completed. 
B) proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made. 
C) is a required financial statement under IFRS. 
D) cannot be used to prepare financial statements. 
A) is prepared after the financial statements are completed. 
B) proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made. 
C) is a required financial statement under IFRS. 
D) cannot be used to prepare financial statements.

Question 2

Under International Financial Reporting Standards (IFRS) the time period assumption means companies must issue financial statements using a calendar year time period.

Accepted Answer

A) True 
 B)False

Question 3

A contra account found on the statement of financial position behaves contrary to accounting rules by being debited on the right and credited on the left.

Accepted Answer

A) True 
 B)False

Question 4

If the adjusting entry for depreciation is not made,

Accepted Answer

A) assets will be understated. 
B) equity will be understated. 
C) net income will be understated. 
D) expenses will be understated. 
A) assets will be understated. 
B) equity will be understated. 
C) net income will be understated. 
D) expenses will be understated.

Question 5

An adjusted trial balance should be prepared before the adjusting entries are made.

Accepted Answer

A) True 
 B)False

Question 6

Accrued revenues are amounts recorded and received but not yet earned.

Accepted Answer

A) True 
 B)False

Question 7

Accumulated Depreciation is

Accepted Answer

A) an expense account. 
B) an equity account. 
C) a liability account. 
D) a contra asset account. 
A) an expense account. 
B) an equity account. 
C) a liability account. 
D) a contra asset account.

Question 8

Myron is a barber who does his own accounting for his shop.When he buys supplies he routinely debits Supplies Expense.Myron purchased $1,500 of supplies in January and his inventory at the end of January shows $600 of supplies remaining.What adjusting entry should Myron make on January 31?

Accepted Answer

A)   $\begin{array} { l  }\text { Supplies Expense}&600 \
 \text {Supplies }&&600 \\end{array}$ 
B)   $\begin{array} { l  }\text {Supplies Expense }&1,500 \
 \text {Cash }&&1,500 \\end{array}$ 
C)  $\begin{array} { l  } \text { Supplies }& 600\
 \text {Supplies Expense }&&600 \\end{array}$

D)  $\begin{array} { l  }\text {Supplies Expense}&900\
 \text {Supplies }&&900 \
\end{array}$ 
A)   $\begin{array} { l  }\text { Supplies Expense}&600 \
 \text {Supplies }&&600 \\end{array}$ 
B)   $\begin{array} { l  }\text {Supplies Expense }&1,500 \
 \text {Cash }&&1,500 \\end{array}$ 
C)  $\begin{array} { l  } \text { Supplies }& 600\
 \text {Supplies Expense }&&600 \\end{array}$

D)  $\begin{array} { l  }\text {Supplies Expense}&900\
 \text {Supplies }&&900 \
\end{array}$

Question 9

A contra asset account is subtracted from a related account in the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 10

The balance in the office supplies account on June 1 was $5,200, supplies purchased during June were $2,500, and the supplies on hand at June 30 were $2,000.The amount to be used for the appropriate adjusting entry is

Accepted Answer

A) $4,500. 
B) $2,500. 
C) $9,700. 
D) $5,700. 
A) $4,500. 
B) $2,500. 
C) $9,700. 
D) $5,700.

Question 11

Adjusting entries are needed to enable financial statements to conform to International Financial Reporting Standards (IFRS).

Accepted Answer

A) True 
 B)False

Question 12

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

Accepted Answer

A) True 
 B)False

Question 13

In an adjusted trial balance, all assets and liabilities reported on the statement of financial position are properly stated.

Accepted Answer

A) True 
 B)False

Question 14

Every adjusting entry affects one statement of financial position account and one income statement account.

Accepted Answer

A) True 
 B)False

Question 15

Accounting time periods that are one year in length are referred to as interim periods.

Accepted Answer

A) True 
 B)False

Question 16

BJ, an employee of Walker Corp., will not receive her paycheck until April 2.Based on services performed from March 15 to March 30, her salary was $800.The adjusting entry for Walker Corp.on March 31 is

Accepted Answer

A)  $\begin{array} { l  }\text { Salaries Expense}&800 \
 \text {Salaries Payable }&&800 \\end{array}$ 
B) $\begin{array} { l  }\text { No entry is required. }& \\end{array}$ 
C)  $\begin{array} { l  }\text { Salaries Expense }&800 \
 \text {Cash }&&800 \\end{array}$ 
D)  $\begin{array} { l  }\text { Salaries Payable }&800 \
 \text {Cash }&&800 \

\end{array}$ 
A)  $\begin{array} { l  }\text { Salaries Expense}&800 \
 \text {Salaries Payable }&&800 \\end{array}$ 
B) $\begin{array} { l  }\text { No entry is required. }& \\end{array}$ 
C)  $\begin{array} { l  }\text { Salaries Expense }&800 \
 \text {Cash }&&800 \\end{array}$ 
D)  $\begin{array} { l  }\text { Salaries Payable }&800 \
 \text {Cash }&&800 \

\end{array}$

Question 17

Speedy Clean Laundry purchased $€ 6,500$ worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30 , an inventory of the laundry supplies indicated only $€ 1,500$ on hand. The adjusting entry that should be made by the company on June 30 is

Accepted Answer

A)  Debit Laundry Supplies Expense, $€ 1,500$; Credit Laundry Supplies, $€ 1,500$. 
B)  Debit Laundry Supplies, $€ 1,500$; Credit Laundry Supplies Expense, $€ 1,500$. 
C)  Debit Laundry Supplies, $€ 5,000$; Credit Laundry Supplies Expense, $€ 5,000$. 
D)  Debit Laundry Supplies Expense, $€ 5,000$; Credit Laundry Supplies, $€ 5,000$. 
A)  Debit Laundry Supplies Expense, $€ 1,500$; Credit Laundry Supplies, $€ 1,500$. 
B)  Debit Laundry Supplies, $€ 1,500$; Credit Laundry Supplies Expense, $€ 1,500$. 
C)  Debit Laundry Supplies, $€ 5,000$; Credit Laundry Supplies Expense, $€ 5,000$. 
D)  Debit Laundry Supplies Expense, $€ 5,000$; Credit Laundry Supplies, $€ 5,000$.

Question 18

The following is selected information from Alpha-Beta-Gamma Corporation for the fiscal year ending October 31, 2011. $\begin{array}{lr}
\text { Cash received from customers } & \$ 300,000 \
\text { Revenue earned } & 350,000 \
\text { Cash paid for expenses } & 170,000 \
\text { Cash paid for computers on November 1, 2010 that will be used } & \
\quad \text { for 3 years (annual depreciation is } \$ 16,000 \text { ) } & 48,000 \
\text { Expenses incurred, not including any depreciation } & 200,000\\text { Proceeds from a bank loan, part of which was used to pay for }\\text { the computers }&100,000
\end{array}$ Based on the accrual basis of accounting, what is Alpha-Beta-Gamma Corporation's net income for the year ending October 31, 2011?

Accepted Answer

A) $114,000. 
B) $134,000. 
C) $82,000. 
D) $150,000. 
A) $114,000. 
B) $134,000. 
C) $82,000. 
D) $150,000.

Question 19

On January 1, 2011, P.T.Scope Company purchased a computer system for $3,240.The company expects to use the system for 3 years.The asset has no salvage value.The book value of the system at December 31, 2012 is

Accepted Answer

A) $0. 
B) $1,080. 
C) $2,160. 
D) $3,240. 
A) $0. 
B) $1,080. 
C) $2,160. 
D) $3,240.

Question 20

The expense recognition principle states that expenses should be matched with revenues.Another way of stating the principle is to say that

Accepted Answer

A) assets should be matched with liabilities. 
B) efforts should be matched with accomplishments. 
C) dividends to shareholders should be matched with shareholders' investments. 
D) cash payments should be matched with cash receipts. 
A) assets should be matched with liabilities. 
B) efforts should be matched with accomplishments. 
C) dividends to shareholders should be matched with shareholders' investments. 
D) cash payments should be matched with cash receipts.

An adjusted trial balance

Under International Financial Reporting Standards (IFRS) the time period assumption means companies must issue financial statements using a calendar year time period.

A contra account found on the statement of financial position behaves contrary to accounting rules by being debited on the right and credited on the left.

If the adjusting entry for depreciation is not made,

An adjusted trial balance should be prepared before the adjusting entries are made.

Accrued revenues are amounts recorded and received but not yet earned.

Accumulated Depreciation is

Myron is a barber who does his own accounting for his shop.When he buys supplies he routinely debits Supplies Expense.Myron purchased $1,500 of supplies in January and his inventory at the end of January shows $600 of supplies remaining.What adjusting entry should Myron make on January 31?

A contra asset account is subtracted from a related account in the statement of financial position.

The balance in the office supplies account on June 1 was $5,200, supplies purchased during June were $2,500, and the supplies on hand at June 30 were $2,000.The amount to be used for the appropriate adjusting entry is

Adjusting entries are needed to enable financial statements to conform to International Financial Reporting Standards (IFRS).

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

In an adjusted trial balance, all assets and liabilities reported on the statement of financial position are properly stated.

Every adjusting entry affects one statement of financial position account and one income statement account.

Accounting time periods that are one year in length are referred to as interim periods.

BJ, an employee of Walker Corp., will not receive her paycheck until April 2.Based on services performed from March 15 to March 30, her salary was $800.The adjusting entry for Walker Corp.on March 31 is

Speedy Clean Laundry purchased $€ 6,500$ worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30 , an inventory of the laundry supplies indicated only $€ 1,500$ on hand. The adjusting entry that should be made by the company on June 30 is

On January 1, 2011, P.T.Scope Company purchased a computer system for $3,240.The company expects to use the system for 3 years.The asset has no salvage value.The book value of the system at December 31, 2012 is

The expense recognition principle states that expenses should be matched with revenues.Another way of stating the principle is to say that

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

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Exam 3: Adjusting the Accounts

An adjusted trial balance

Under International Financial Reporting Standards (IFRS) the time period assumption means companies must issue financial statements using a calendar year time period.

A contra account found on the statement of financial position behaves contrary to accounting rules by being debited on the right and credited on the left.

If the adjusting entry for depreciation is not made,

An adjusted trial balance should be prepared before the adjusting entries are made.

Accrued revenues are amounts recorded and received but not yet earned.

Accumulated Depreciation is

Myron is a barber who does his own accounting for his shop.When he buys supplies he routinely debits Supplies Expense.Myron purchased $1,500 of supplies in January and his inventory at the end of January shows $600 of supplies remaining.What adjusting entry should Myron make on January 31?

A contra asset account is subtracted from a related account in the statement of financial position.

The balance in the office supplies account on June 1 was $5,200, supplies purchased during June were $2,500, and the supplies on hand at June 30 were $2,000.The amount to be used for the appropriate adjusting entry is

Adjusting entries are needed to enable financial statements to conform to International Financial Reporting Standards (IFRS).

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

In an adjusted trial balance, all assets and liabilities reported on the statement of financial position are properly stated.

Every adjusting entry affects one statement of financial position account and one income statement account.

Accounting time periods that are one year in length are referred to as interim periods.

BJ, an employee of Walker Corp., will not receive her paycheck until April 2.Based on services performed from March 15 to March 30, her salary was $800.The adjusting entry for Walker Corp.on March 31 is

On January 1, 2011, P.T.Scope Company purchased a computer system for $3,240.The company expects to use the system for 3 years.The asset has no salvage value.The book value of the system at December 31, 2012 is

The expense recognition principle states that expenses should be matched with revenues.Another way of stating the principle is to say that

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters