Question 1

A work sheet contains all of the balances for each account and therefore may be used as a substitute for the set of financial statements.

Accepted Answer

A) True 
 B)False

Question 2

Under the alternative method for recording prepaid expenses,which is the correct set of journal entries?

Accepted Answer

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

Question 3

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

Accepted Answer

A) Cash basis accounting. 
B) The expense recognition (matching)principle. 
C) The time period assumption. 
D) Accrual basis accounting. 
E) Revenue basis accounting. 
A) Cash basis accounting. 
B) The expense recognition (matching)principle. 
C) The time period assumption. 
D) Accrual basis accounting. 
E) Revenue basis accounting.

Question 4

The calendar year-end adjusted trial balance for   
Required:
(a)Determine the amounts of current assets and current liabilities.(Note: A $9,000 installment on the long-term note payable is due within one year.)
(b)Calculate the current ratio.Comment on the ability of Blessinger Co.to meets its short-term debts.

Accepted Answer

(a)Current assets = Cash + Accounts Rece

Question 5

After posting the entries to close all revenue and expense accounts,Marker Company's Income Summary account has a credit balance of $6,000,and its Dividends account has a debit balance of $2,500.These balances indicate that net income for the current accounting period amounted to $3,500.

Accepted Answer

A) True 
 B)False

Question 6

Using the information given below,prepare an income statement and statement of retained earnings for Rapid Car Services from the adjusted trial balance.

Accepted Answer

The answer of Using the information given below,prepare an income...

Question 7

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31.This oversight would:

Accepted Answer

A) Understate net income by $28,000. 
B) Overstate net income by $28,000. 
C) Have no effect on net income. 
D) Overstate assets by $28,000. 
E) Understate assets by $28,000. 
A) Understate net income by $28,000. 
B) Overstate net income by $28,000. 
C) Have no effect on net income. 
D) Overstate assets by $28,000. 
E) Understate assets by $28,000.

Question 8

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

Accepted Answer

A) True 
 B)False

Question 9

Prepare general journal entries on December 31 to record the following unrelated year-end adjustments.
a.Estimated depreciation on equipment for the year,$4,500.
b.The Prepaid Insurance account has a $3,680 debit balance before adjustment.An examination of insurance policies shows $600 of insurance expired.
c.The Prepaid Insurance account has a $2,400 debit balance before adjustment.An examination of insurance policies shows $950 of unexpired insurance.
d.The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday.The employees were paid on Friday,December 26,and have worked full days on Monday,Tuesday,and Wednesday,December 29,30,and 31.
e.On November 1,the company received 6 months' rent in advance from a tenant whose rent is $700 per month.The $4,200 was credited to the Unearned Rent account.
f.The company collects rent monthly from its tenants.One tenant whose rent is $1,000 per month has not paid his rent for December.

Accepted Answer

The answer of Prepare general journal entries on December 31...

Question 10

All of the following statements regarding a work sheet are true except:

Accepted Answer

A) A worksheet aids in the preparation of financial statements. 
B) A worksheet reduces possible errors when working with many accounts and adjustments. 
C) A worksheet is not useful in planning and organizing an audit of financial statements. 
D) A worksheet helps in preparing interim financial statements. 
E) A worksheet shows the effects of proposed or "what-if" transactions. 
A) A worksheet aids in the preparation of financial statements. 
B) A worksheet reduces possible errors when working with many accounts and adjustments. 
C) A worksheet is not useful in planning and organizing an audit of financial statements. 
D) A worksheet helps in preparing interim financial statements. 
E) A worksheet shows the effects of proposed or "what-if" transactions.

Question 11

A company's month-end adjusting entry for Insurance Expense is $1,000.If this entry is not made then expenses are understated by $1,000 and net income is overstated by $1,000.

Accepted Answer

A) True 
 B)False

Question 12

All necessary amounts to prepare the balance sheet,including ending retained earnings,can be found in the Balance Sheet columns of the work sheet.

Accepted Answer

A) True 
 B)False

Question 13

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the period?

Accepted Answer

A) $2,700. 
B) $2,900. 
C) $3,300. 
D) $3,500. 
E) $3,700. 
A) $2,700. 
B) $2,900. 
C) $3,300. 
D) $3,500. 
E) $3,700.

Question 14

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Accepted Answer

A) Office Equipment. 
B) Accumulated Depreciation-Office Equipment. 
C) Depreciation Expense-Office Equipment. 
D) Retained earnings. 
E) Salaries Payable. 
A) Office Equipment. 
B) Accumulated Depreciation-Office Equipment. 
C) Depreciation Expense-Office Equipment. 
D) Retained earnings. 
E) Salaries Payable.

Question 15

A worksheet can be helpful in showing the effects of proposed or "what if" transactions but not in helping to prepare interim financial statements.

Accepted Answer

A) True 
 B)False

Question 16

Explain how accounting adjustments affect financial statements and provide an example of an adjustment that would impact the statements if not recorded.

Accepted Answer

Adjusting entries bring assets,liabiliti

Question 17

Using the information presented below,prepare a statement of retained earnings and balance sheet from the adjusted trial balance of Dodson Containers.

Accepted Answer

The answer of Using the information presented below,prepare a statement...

Question 18

An unclassified balance sheet provides more information to users than a classified balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

On November 1,Jasper Company loaned another company $100,000 at a 6.0% interest rate.The note receivable plus interest will not be collected until March 1 of the following year.The company's annual accounting period ends on December 31.The amount of interest revenue that should be reported in the first year is:

Accepted Answer

A) $0. 
B) $6,000. 
C) $5,000. 
D) $16,667. 
E) $1,000. 
A) $0. 
B) $6,000. 
C) $5,000. 
D) $16,667. 
E) $1,000.

Question 20

For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.$37,000 in dividends were paid during the year.Which of the following entries could not be a closing entry?

Accepted Answer

A) Debit Income Summary $78,000; credit Retained earnings $78,000. 
B) Debit Retained earnings $37,000; credit Dividends $37,000. 
C) Debit revenues $187,000; credit Income Summary $187,000. 
D) Debit Income Summary $109,000,credit expenses $109,000. 
E) Debit Income Summary $187,000; credit revenues $187,000. 
A) Debit Income Summary $78,000; credit Retained earnings $78,000. 
B) Debit Retained earnings $37,000; credit Dividends $37,000. 
C) Debit revenues $187,000; credit Income Summary $187,000. 
D) Debit Income Summary $109,000,credit expenses $109,000. 
E) Debit Income Summary $187,000; credit revenues $187,000.

Exam 3: Adjusting Accounts for Financial Statements

A work sheet contains all of the balances for each account and therefore may be used as a substitute for the set of financial statements.

Under the alternative method for recording prepaid expenses,which is the correct set of journal entries?

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

After posting the entries to close all revenue and expense accounts,Marker Company's Income Summary account has a credit balance of $6,000,and its Dividends account has a debit balance of $2,500.These balances indicate that net income for the current accounting period amounted to $3,500.

Using the information given below,prepare an income statement and statement of retained earnings for Rapid Car Services from the adjusted trial balance.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31.This oversight would:

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

All of the following statements regarding a work sheet are true except:

A company's month-end adjusting entry for Insurance Expense is $1,000.If this entry is not made then expenses are understated by $1,000 and net income is overstated by $1,000.

All necessary amounts to prepare the balance sheet,including ending retained earnings,can be found in the Balance Sheet columns of the work sheet.

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the period?

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

A worksheet can be helpful in showing the effects of proposed or "what if" transactions but not in helping to prepare interim financial statements.

Explain how accounting adjustments affect financial statements and provide an example of an adjustment that would impact the statements if not recorded.

Using the information presented below,prepare a statement of retained earnings and balance sheet from the adjusted trial balance of Dodson Containers.

An unclassified balance sheet provides more information to users than a classified balance sheet.

For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.$37,000 in dividends were paid during the year.Which of the following entries could not be a closing entry?

Accounting in Business

Accounting for Business Transactions

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

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