Question 1

An accumulated depreciation account

Accepted Answer

A) is a contra-liability account. 
B) increases on the debit side. 
C) is offset against total assets on the statement of financial position. 
D) has a normal credit balance. 
A) is a contra-liability account. 
B) increases on the debit side. 
C) is offset against total assets on the statement of financial position. 
D) has a normal credit balance.

Question 2

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)    
B)  No entry is required. 
C)    
D)    
A)    
B)  No entry is required. 
C)    
D)

Question 3

Unearned revenue is classified as

Accepted Answer

A) an asset account. 
B) a revenue account. 
C) a contra-revenue account. 
D) a liability. 
A) an asset account. 
B) a revenue account. 
C) a contra-revenue account. 
D) a liability.

Question 4

Financial statements are prepared directly from the

Accepted Answer

A) general journal. 
B) ledger. 
C) trial balance. 
D) adjusted trial balance. 
A) general journal. 
B) ledger. 
C) trial balance. 
D) adjusted trial balance.

Question 5

If an adjusting entry is not made for an accrued expense,

Accepted Answer

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

Question 6

Adjusting entries are often made because some business events are not recorded as they occur.

Accepted Answer

A) True 
 B)False

Question 7

At December 31, 2011, before any year-end adjustments, Cable Car Company's Insurance Expense account had a balance of $1,450 and its Prepaid Insurance account had a balance of $3,800.It was determined that $3,000 of the Prepaid Insurance had expired.The adjusted balance for Insurance Expense for the year would be

Accepted Answer

A) $3,000. 
B) $1,450. 
C) $4,450. 
D) $2,250. 
A) $3,000. 
B) $1,450. 
C) $4,450. 
D) $2,250.

Question 8

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 9

The time period assumption states that the economic life of a business entity can be divided into artificial time periods.

Accepted Answer

A) True 
 B)False

Question 10

Sherman Air Charter signed a four-month note payable in the amount of $8,000 on September 1.The note requires interest at an annual rate of 6%.The amount of interest to be accrued at the end of September is

Accepted Answer

A) $160. 
B) $40. 
C) $480. 
D) $120. 
A) $160. 
B) $40. 
C) $480. 
D) $120.

Question 11

The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

Accepted Answer

A) True 
 B)False

Question 12

Under GAAP revaluation to fair value of items such as land and building is permitted, which is not permitted under IFRS.

Accepted Answer

A) True 
 B)False

Question 13

Under International Financial Reporting Standards (IFRS) the cash-basis of accounting requires companies to record transactions in the period in which the events occur.

Accepted Answer

A) True 
 B)False

Question 14

Southwestern City College sold season tickets for the 2011 football season for $180,000.A total of 8 games will be played during September, October and November.Assuming all the games are played, the Unearned Revenue balance that will be reported on the December 31 statement of financial position will be

Accepted Answer

A) $0. 
B) $67,500. 
C) $112,500. 
D) $180,000. 
A) $0. 
B) $67,500. 
C) $112,500. 
D) $180,000.

Question 15

Failure to prepare an adjusting entry at the end of a period to record an accrued revenue would cause

Accepted Answer

A) net income to be overstated. 
B) an understatement of assets and an understatement of revenues. 
C) an understatement of revenues and an understatement of liabilities. 
D) an understatement of revenues and an overstatement of liabilities. 
A) net income to be overstated. 
B) an understatement of assets and an understatement of revenues. 
C) an understatement of revenues and an understatement of liabilities. 
D) an understatement of revenues and an overstatement of liabilities.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

Accepted Answer

A) an expense should be recorded when the bill is received. 
B) an expense should be recorded when the cash is paid out. 
C) an adjusting entry should be made recognizing the expense. 
D) it is optional whether to record the expense before the bill is received. 
A) an expense should be recorded when the bill is received. 
B) an expense should be recorded when the cash is paid out. 
C) an adjusting entry should be made recognizing the expense. 
D) it is optional whether to record the expense before the bill is received.

Question 18

An adjusting entry that increases an expense on the income statement and decreases an asset on the statement of financial position is the result of prepaid expenses that expire with the passage of time.

Accepted Answer

A) True 
 B)False

Question 19

If a business has received cash in advance of services 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 Service Revenue. 
C) debit Unearned Revenue and credit Prepaid Expense. 
D) debit Unearned Revenue and credit Accounts Receivable. 
A) debit Unearned Revenue and credit Cash. 
B) debit Unearned Revenue and credit Service Revenue. 
C) debit Unearned Revenue and credit Prepaid Expense. 
D) debit Unearned Revenue and credit Accounts Receivable.

Question 20

In general, adjusting entries are required each time financial statements are prepared.

Accepted Answer

A) True 
 B)False

An accumulated depreciation account

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

Unearned revenue is classified as

Financial statements are prepared directly from the

If an adjusting entry is not made for an accrued expense,

Adjusting entries are often made because some business events are not recorded as they occur.

Unearned revenues are

The time period assumption states that the economic life of a business entity can be divided into artificial time periods.

Sherman Air Charter signed a four-month note payable in the amount of $8,000 on September 1.The note requires interest at an annual rate of 6%.The amount of interest to be accrued at the end of September is

The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

Under GAAP revaluation to fair value of items such as land and building is permitted, which is not permitted under IFRS.

Under International Financial Reporting Standards (IFRS) the cash-basis of accounting requires companies to record transactions in the period in which the events occur.

Failure to prepare an adjusting entry at the end of a period to record an accrued revenue would cause

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

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

An adjusting entry that increases an expense on the income statement and decreases an asset on the statement of financial position is the result of prepaid expenses that expire with the passage of time.

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

In general, adjusting entries are required each time financial statements are prepared.

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

An accumulated depreciation account

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 \$ 800 $800 . The adjusting entry for Walker Corp on March 31 is

Unearned revenue is classified as

Financial statements are prepared directly from the

If an adjusting entry is not made for an accrued expense,

Adjusting entries are often made because some business events are not recorded as they occur.

Unearned revenues are

The time period assumption states that the economic life of a business entity can be divided into artificial time periods.

Sherman Air Charter signed a four-month note payable in the amount of $8,000 on September 1.The note requires interest at an annual rate of 6%.The amount of interest to be accrued at the end of September is

The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

Under GAAP revaluation to fair value of items such as land and building is permitted, which is not permitted under IFRS.

Under International Financial Reporting Standards (IFRS) the cash-basis of accounting requires companies to record transactions in the period in which the events occur.

Failure to prepare an adjusting entry at the end of a period to record an accrued revenue would cause

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

If a resource has been consumed but a bill has not been received at the end of the accounting period, then

An adjusting entry that increases an expense on the income statement and decreases an asset on the statement of financial position is the result of prepaid expenses that expire with the passage of time.

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

In general, adjusting entries are required each time financial statements are prepared.

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

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