Question 1

Accrued revenues are revenues which have been received but not yet earned.

Accepted Answer

A) True 
 B)False

Question 2

Jenni's Music Store borrowed $12,000 from the bank signing a 9%, 3-month note on September 1.Principal and interest are payable to the bank on December 1.If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be

Accepted Answer

A) Debit Interest Expense, $1,080; Credit Interest Payable, $1,080. 
B) Debit Interest Expense, $90; Credit Interest Payable, $90. 
C) Debit Note Payable, $1,080; Credit Cash, $1,080. 
D) Debit Cash, $270; Credit Interest Payable, $270. 
A) Debit Interest Expense, $1,080; Credit Interest Payable, $1,080. 
B) Debit Interest Expense, $90; Credit Interest Payable, $90. 
C) Debit Note Payable, $1,080; Credit Cash, $1,080. 
D) Debit Cash, $270; Credit Interest Payable, $270.

Question 3

On January 1, 2011, Grills and Grates Inc.purchased equipment for $45,000.The company is depreciating the equipment at the rate of $600 per month.At January 31, 2012, the balance in Accumulated Depreciation is

Accepted Answer

A) $600. 
B) $7,200. 
C) $7,800. 
D) $37,200. 
A) $600. 
B) $7,200. 
C) $7,800. 
D) $37,200.

Question 4

Turner Company collected $6,500 in September of 2011 for 5 months of service which would take place from October of 2011 through February of 2012.The revenue reported from this transaction during 2011 would be

Accepted Answer

A) $0. 
B) $3,900. 
C) $6,500. 
D) $2,600. 
A) $0. 
B) $3,900. 
C) $6,500. 
D) $2,600.

Question 5

The expense recognition principle attempts to match ______________ with ______________.

Accepted Answer

The answer of The expense recognition principle attempts to match...

Question 6

Joyce's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $ \$ 50,000 $ with annual interest of $ 12 \% $. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 7

A document prepared to prove the equality of debits and credits after all adjustments have been prepared is the

Accepted Answer

A) Adjusted statement of financial position. 
B) Adjusted trial balance. 
C) Adjusted financial statements. 
D) Post-closing trial balance. 
A) Adjusted statement of financial position. 
B) Adjusted trial balance. 
C) Adjusted financial statements. 
D) Post-closing trial balance.

Question 8

Y-B-2 Inc.pays its rent of $90,000 annually on January 1.If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

Accepted Answer

A) Failure to make the adjustment does not affect the February financial statements. 
B) Expenses will be overstated by $7,500 and net income and equity will be understated by $7,500. 
C) Assets will be overstated by $15,000 and net income and equity will be understated by $15,000. 
D) Assets will be overstated by $7,500 and net income and equity will be overstated by $7,500. 
A) Failure to make the adjustment does not affect the February financial statements. 
B) Expenses will be overstated by $7,500 and net income and equity will be understated by $7,500. 
C) Assets will be overstated by $15,000 and net income and equity will be understated by $15,000. 
D) Assets will be overstated by $7,500 and net income and equity will be overstated by $7,500.

Question 9

A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day.The adjusting entry necessary at the end of the fiscal period ending on a Thursday is

Accepted Answer

A) debit Salaries Payable, $20,000; credit Cash, $20,000. 
B) debit Salaries Expense, $20,000; credit Cash, $20,000. 
C) debit Salaries Expense, $20,000; credit Salaries Payable, $20,000. 
D) debit Salaries Expense, $5,000; credit Salaries Payable, $5,000. 
A) debit Salaries Payable, $20,000; credit Cash, $20,000. 
B) debit Salaries Expense, $20,000; credit Cash, $20,000. 
C) debit Salaries Expense, $20,000; credit Salaries Payable, $20,000. 
D) debit Salaries Expense, $5,000; credit Salaries Payable, $5,000.

Question 10

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 11

Can financial statements be prepared directly from the adjusted trial balance?

Accepted Answer

A) They cannot.The general ledger must be used. 
B) Yes, adjusting entries have been recorded in the general journal and posted to the ledger accounts. 
C) No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted.It has no other purpose. 
D) They can because that is the only reason that an adjusted trial balance is prepared. 
A) They cannot.The general ledger must be used. 
B) Yes, adjusting entries have been recorded in the general journal and posted to the ledger accounts. 
C) No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted.It has no other purpose. 
D) They can because that is the only reason that an adjusted trial balance is prepared.

Question 12

Use the following information for questions 
Ling Company had the following transactions during 2011:
$\bullet$Sales of ¥9,000 on account
$\bullet$Collected ¥4,000 for services to be performed in 2012
$\bullet$Paid ¥1,250 cash in salaries
$\bullet$Purchased airline tickets for ¥500 in December for a trip to take place in 2012
-What is Ling's 2011 net income using cash basis accounting?

Accepted Answer

A) ¥11,750. 
B) ¥2,750. 
C) ¥11,250. 
D) ¥2,250. 
A) ¥11,750. 
B) ¥2,750. 
C) ¥11,250. 
D) ¥2,250.

Question 13

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.

Question 14

O.K.C.Company collected $11,200 in September of 2011 for 4 months of service which would take place from October of 2011 through January of 2012.The revenue reported from this transaction during 2011 would be

Accepted Answer

A) 0. 
B) $8,400. 
C) $11,200. 
D) $2,680. 
A) 0. 
B) $8,400. 
C) $11,200. 
D) $2,680.

Question 15

When companies record transactions in the period in which the events occur, ______ is being applied.

Accepted Answer

A) Accrual-basis accounting. 
B) The time period assumption. 
C) The matching of the income statement with the statement of financial position. 
D) The expense recognition principle. 
A) Accrual-basis accounting. 
B) The time period assumption. 
C) The matching of the income statement with the statement of financial position. 
D) The expense recognition principle.

Question 16

At March 1, Progressive Auto Inc.reported a balance in Supplies of $200.During March, the company purchased supplies for $750 and consumed supplies of $800.If no adjusting entry is made for supplies

Accepted Answer

A) equity will be overstated by $800. 
B) expenses will be understated by $750. 
C) assets will be understated by $150. 
D) net income will be understated by $800. 
A) equity will be overstated by $800. 
B) expenses will be understated by $750. 
C) assets will be understated by $150. 
D) net income will be understated by $800.

Question 17

Becki Jean Corporation issued a one-year, 6%, $200,000 note on April 30, 2011.Interest expense for the year ended December 31, 2011 was

Accepted Answer

A) $12,000. 
B) $9,000. 
C) $8,000. 
D) $7,000. 
A) $12,000. 
B) $9,000. 
C) $8,000. 
D) $7,000.

Question 18

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 19

The revenue recognition principle dictates that revenue be recognized in the accounting period

Accepted Answer

A) before it is earned. 
B) after it is earned. 
C) in which it is earned. 
D) in which it is collected. 
A) before it is earned. 
B) after it is earned. 
C) in which it is earned. 
D) in which it is collected.

Question 20

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.

Accrued revenues are revenues which have been received but not yet earned.

Jenni's Music Store borrowed $12,000 from the bank signing a 9%, 3-month note on September 1.Principal and interest are payable to the bank on December 1.If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be

On January 1, 2011, Grills and Grates Inc.purchased equipment for $45,000.The company is depreciating the equipment at the rate of $600 per month.At January 31, 2012, the balance in Accumulated Depreciation is

Turner Company collected $6,500 in September of 2011 for 5 months of service which would take place from October of 2011 through February of 2012.The revenue reported from this transaction during 2011 would be

The expense recognition principle attempts to match with .

A document prepared to prove the equality of debits and credits after all adjustments have been prepared is the

Y-B-2 Inc.pays its rent of $90,000 annually on January 1.If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day.The adjusting entry necessary at the end of the fiscal period ending on a Thursday is

Based on the accrual basis of accounting, what is Alpha-Beta-Gamma Corporation's net income for the year ending October 31, 2011?

Can financial statements be prepared directly from the adjusted trial balance?

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

O.K.C.Company collected $11,200 in September of 2011 for 4 months of service which would take place from October of 2011 through January of 2012.The revenue reported from this transaction during 2011 would be

When companies record transactions in the period in which the events occur, ______ is being applied.

At March 1, Progressive Auto Inc.reported a balance in Supplies of $200.During March, the company purchased supplies for $750 and consumed supplies of $800.If no adjusting entry is made for supplies

Becki Jean Corporation issued a one-year, 6%, $200,000 note on April 30, 2011.Interest expense for the year ended December 31, 2011 was

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

The revenue recognition principle dictates that revenue be recognized in the accounting period

Prepaid expenses are

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

Payroll Accounting

Other Significant Liabilities

Filters

Exam 3: Adjusting the Accounts

Accrued revenues are revenues which have been received but not yet earned.

Jenni's Music Store borrowed $12,000 from the bank signing a 9%, 3-month note on September 1.Principal and interest are payable to the bank on December 1.If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be

On January 1, 2011, Grills and Grates Inc.purchased equipment for $45,000.The company is depreciating the equipment at the rate of $600 per month.At January 31, 2012, the balance in Accumulated Depreciation is

Turner Company collected $6,500 in September of 2011 for 5 months of service which would take place from October of 2011 through February of 2012.The revenue reported from this transaction during 2011 would be

The expense recognition principle attempts to match ______________ with ______________.

A document prepared to prove the equality of debits and credits after all adjustments have been prepared is the

Y-B-2 Inc.pays its rent of $90,000 annually on January 1.If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day.The adjusting entry necessary at the end of the fiscal period ending on a Thursday is

Based on the accrual basis of accounting, what is Alpha-Beta-Gamma Corporation's net income for the year ending October 31, 2011?

Can financial statements be prepared directly from the adjusted trial balance?

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

O.K.C.Company collected $11,200 in September of 2011 for 4 months of service which would take place from October of 2011 through January of 2012.The revenue reported from this transaction during 2011 would be

When companies record transactions in the period in which the events occur, ______ is being applied.

At March 1, Progressive Auto Inc.reported a balance in Supplies of $200.During March, the company purchased supplies for $750 and consumed supplies of $800.If no adjusting entry is made for supplies

Becki Jean Corporation issued a one-year, 6%, $200,000 note on April 30, 2011.Interest expense for the year ended December 31, 2011 was

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

The revenue recognition principle dictates that revenue be recognized in the accounting period

Prepaid expenses are

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

Payroll Accounting

Other Significant Liabilities

Filters

The expense recognition principle attempts to match with .