Question 1

The balances in the unadjusted columns of a work sheet will agree with:

Accepted Answer

A) the balances reflected in the company's financial statements. 
B) the balances reflected in the company's unadjusted trial balance. 
C) whatever balances management has decided to report. 
D) the balances in the company's post-closing trial balance. 
E) the balances management budgeted for the accounting period. 
A) the balances reflected in the company's financial statements. 
B) the balances reflected in the company's unadjusted trial balance. 
C) whatever balances management has decided to report. 
D) the balances in the company's post-closing trial balance. 
E) the balances management budgeted for the accounting period.

Question 2

The following unadjusted and adjusted trial balances are from the current year's accounting system for Excelsior.
 
Present the six adjusting entries in general journal form that explain the changes in the account balances from the unadjusted to the adjusted trial balance.

Accepted Answer

The answer of The following unadjusted and adjusted trial balances...

Question 3

Karl Company accrued wages of $7,350 that were earned by employees unpaid at the year-end.Assuming Karl uses reversing entries,which of the following entries correctly reverses the accrued wages at the beginning of the following year?

Accepted Answer

A) Debit Wages Expense $7,350; credit Cash $7,350. 
B) Debit Wages Expense $7,350; credit Wages Payable $7,350. 
C) Debit Wages Payable $7,350; credit Cash $7,350. 
D) Debit Cash $7,350; credit Wages Expense $7,350. 
E) Debit Wages Payable $7,350; credit Wages Expense $7,350. 
A) Debit Wages Expense $7,350; credit Cash $7,350. 
B) Debit Wages Expense $7,350; credit Wages Payable $7,350. 
C) Debit Wages Payable $7,350; credit Cash $7,350. 
D) Debit Cash $7,350; credit Wages Expense $7,350. 
E) Debit Wages Payable $7,350; credit Wages Expense $7,350.

Question 4

Two main accounting principles used in accrual accounting are expense recognition and full closure.

Accepted Answer

A) True 
 B)False

Question 5

On April 1,Otisco,Inc.paid Garcia Publishing Company $1,548 for 36-month subscriptions to several different magazines.Otisco debited the prepayment to a Prepaid Subscriptions account,and the subscriptions started immediately.
-What amount should appear in the Prepaid Subscription account for Otisco,Inc.after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made?

Accepted Answer

A) $1,548. 
B) $387. 
C) $516. 
D) $1,161. 
E) $0. 
A) $1,548. 
B) $387. 
C) $516. 
D) $1,161. 
E) $0.

Question 6

Reversing entries are optional.

Accepted Answer

A) True 
 B)False

Question 7

From the information provided,calculate Giuseppe's profit margin ratio for each of the three years.Comment on the results,assuming that the industry average for the profit margin ratio is 6% for each of the three years.

Accepted Answer

@#IMG-DLM& Analysis comment: The profit margin has

Question 8

The usual order for the asset subgroups of a classified balance sheet is:

Accepted Answer

A) Current assets,prepaid expenses,long-term investments,intangible assets. 
B) Long-term investments,current assets,plant assets,intangible assets. 
C) Current assets,long-term investments,plant assets,intangible assets. 
D) Intangible assets,current assets,long-term investments,plant assets. 
E) Plant assets,intangible assets,long-term investments,current assets. 
A) Current assets,prepaid expenses,long-term investments,intangible assets. 
B) Long-term investments,current assets,plant assets,intangible assets. 
C) Current assets,long-term investments,plant assets,intangible assets. 
D) Intangible assets,current assets,long-term investments,plant assets. 
E) Plant assets,intangible assets,long-term investments,current assets.

Question 9

Which of the following statements is incorrect?

Accepted Answer

A) Working papers are useful aids in the accounting process. 
B) On the work sheet,the effects of the accounting adjustments are shown on the account balances. 
C) After the work sheet is completed,it can be used to help prepare the financial statements. 
D) On the work sheet,the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance. 
E) A worksheet is not a substitute for financial statements. 
A) Working papers are useful aids in the accounting process. 
B) On the work sheet,the effects of the accounting adjustments are shown on the account balances. 
C) After the work sheet is completed,it can be used to help prepare the financial statements. 
D) On the work sheet,the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance. 
E) A worksheet is not a substitute for financial statements.

Question 10

Describe the adjusting entries,including the accounts used,for 1)accrued expenses and 2)accrued revenues.

Accepted Answer

1)Accrued expenses are expenses that hav

Question 11

On October 15,a company received $15,000 cash as a down payment on a consulting contract.The amount was credited to Unearned Consulting Revenue.By October 31,10% of the services required by the contract were completed.The company will record consulting revenue of $1,500 from this contract for October.

Accepted Answer

A) True 
 B)False

Question 12

If a company records prepayment of expenses in an asset account,the adjusting entry when all or part of the prepaid asset is used or expired would:

Accepted Answer

A) Result in a debit to an expense and a credit to an asset account. 
B) Cause an adjustment to prior expense to be overstated and assets to be understated. 
C) Cause an accrued liability account to exist. 
D) Result in a debit to a liability and a credit to an asset account. 
E) Decrease cash. 
A) Result in a debit to an expense and a credit to an asset account. 
B) Cause an adjustment to prior expense to be overstated and assets to be understated. 
C) Cause an accrued liability account to exist. 
D) Result in a debit to a liability and a credit to an asset account. 
E) Decrease cash.

Question 13

Match between columns
                        Premises: Used to record wages owed, but not yet paid.
Used to record expiration or use of prepaid insurance.
Used to record revenue earned for which cash was received in advance.
Used to record revenue earned for which cash has not been received.

Accepted Answer

The Answer of Unearned revenue and Prepaid expense and Accrued is...

Question 14

Which of the following is the usual final step in the accounting cycle?

Accepted Answer

A) Journalizing transactions. 
B) Preparing an adjusted trial balance. 
C) Preparing a post-closing trial balance. 
D) Preparing the financial statements. 
E) Preparing a work sheet. 
A) Journalizing transactions. 
B) Preparing an adjusted trial balance. 
C) Preparing a post-closing trial balance. 
D) Preparing the financial statements. 
E) Preparing a work sheet.

Question 15

A company's December 31 work sheet for the current period appears below.Based on the information provided,what is net income for the current period?

Accepted Answer

A) $1,400. 
B) $1,855. 
C) $1,905. 
D) $2,060. 
E) $4,670. 
A) $1,400. 
B) $1,855. 
C) $1,905. 
D) $2,060. 
E) $4,670.

Question 16

Intangible assets are assets that are long-term,have physical form,and are used to produce or sell products and services.

Accepted Answer

A) True 
 B)False

Question 17

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Accepted Answer

A) True 
 B)False

Question 18

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Accepted Answer

A) True 
 B)False

Question 19

A contra account is an account linked with another account; it is added to that account to show the proper amount for the item recorded in the associated account.

Accepted Answer

A) True 
 B)False

Question 20

An ________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Accepted Answer

unadjusted

Exam 3: Adjusting Accounts for Financial Statements

The balances in the unadjusted columns of a work sheet will agree with:

The following unadjusted and adjusted trial balances are from the current year's accounting system for Excelsior. Present the six adjusting entries in general journal form that explain the changes in the account balances from the unadjusted to the adjusted trial balance.

Karl Company accrued wages of $7,350 that were earned by employees unpaid at the year-end.Assuming Karl uses reversing entries,which of the following entries correctly reverses the accrued wages at the beginning of the following year?

Two main accounting principles used in accrual accounting are expense recognition and full closure.

Reversing entries are optional.

From the information provided,calculate Giuseppe's profit margin ratio for each of the three years.Comment on the results,assuming that the industry average for the profit margin ratio is 6% for each of the three years.

The usual order for the asset subgroups of a classified balance sheet is:

Which of the following statements is incorrect?

Describe the adjusting entries,including the accounts used,for 1)accrued expenses and 2)accrued revenues.

If a company records prepayment of expenses in an asset account,the adjusting entry when all or part of the prepaid asset is used or expired would:

Which of the following is the usual final step in the accounting cycle?

A company's December 31 work sheet for the current period appears below.Based on the information provided,what is net income for the current period?

Intangible assets are assets that are long-term,have physical form,and are used to produce or sell products and services.

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

A contra account is an account linked with another account; it is added to that account to show the proper amount for the item recorded in the associated account.

An ________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

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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