Question 1

A list of the accounts and their balances after all adjustments have been made is known as a(n):

Accepted Answer

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

Question 2

Adjustments for accrued expenses are necessary to record the obligations that exist at the balance sheet date and to recognize the expenses that are applicable to the current accounting period.

Accepted Answer

A) True 
 B)False  True

Question 3

Depreciation is the allocation of the cost of a long-lived asset to expense over its useful life in a rational and systematic manner.

Accepted Answer

A) True 
 B)False  True

Question 4

Revenue is recognized in the period in which it was received rather than when it was earned.

Accepted Answer

A) True 
 B)False

Question 5

a)Revenue should be recorded in the accounting period when ________________________ ________________________.
If a cost is directly related to earning revenue it should be recorded as an expense in the accounting period when _____________________________________________.
If the there is no direct association between the cost and the revenue but the company will benefit from a cost over several years, the cost should be recognized as expense in the accounting period when _____________.

If the benefit from a cost is fully used in the current period it should be recognized as expense in the accounting period when ________________________.

Accepted Answer

Revenue should be recorded in the accoun

Question 6

Under ASPE, the term "depreciation" must be used for the cost allocation of all long-lived assets.

Accepted Answer

A) True 
 B)False

Question 7

If an adjusting entry to record accrued revenue was not posted:

Accepted Answer

A)  assets would be understated. 
B)  revenue would be understated. 
C)  profit would be understated. 
D)  All of the above. 
A)  assets would be understated. 
B)  revenue would be understated. 
C)  profit would be understated. 
D)  All of the above.

Question 8

Some retail companies use a 52-week period, instead of exactly one year, for their fiscal year.

Accepted Answer

A) True 
 B)False

Question 9

Accrued revenues are also called accrued liabilities

Accepted Answer

A) True 
 B)False

Question 10

Revenue is not recorded in the accounting period when:

Accepted Answer

A)  there is an increase in assets or a decrease in liabilities. 
B)  the service has been performed or the goods have been sold and delivered. 
C)  the revenue can be reliably measured and collection is reasonably certain. 
D)  there is a decrease in assets or an increase in liabilities. 
A)  there is an increase in assets or a decrease in liabilities. 
B)  the service has been performed or the goods have been sold and delivered. 
C)  the revenue can be reliably measured and collection is reasonably certain. 
D)  there is a decrease in assets or an increase in liabilities.

Question 11

Prior to recording adjusting entries, revenues exceed expenses by $60,000. Adjusting entries for accrued wages of $5,000 and depreciation expense of $5,000 were made. Profit for the year would be:

Accepted Answer

A)  $60,000. 
B)  $55,000. 
C)  $50,000. 
D)  None of the above. 
A)  $60,000. 
B)  $55,000. 
C)  $50,000. 
D)  None of the above.

Question 12

Payments of expenses that will benefit more than one accounting period are referred to as prepaid expenses

Accepted Answer

A) True 
 B)False

Question 13

Accumulated depreciation is an example of a contra asset account and its balance is deducted from the related asset in the financial statements.

Accepted Answer

A) True 
 B)False

Question 14

Cost less accumulated depreciation is a measurement of the current value of an asset such as equipment or a building.

Accepted Answer

A) True 
 B)False

Question 15

What type of accounts (i.e. asset, liability or owner's equity) are the following accounts?

Accepted Answer

The answer of What type of accounts (i.e. asset, liability...

Question 16

The recording of wages earned but not yet paid is an example of an adjustment that:

Accepted Answer

A)  recognizes an accrued expense. 
B)  recognizes an unrecorded revenue. 
C)  apportions revenues between two or more periods. 
D)  apportions estimated costs between two or more periods. 
A)  recognizes an accrued expense. 
B)  recognizes an unrecorded revenue. 
C)  apportions revenues between two or more periods. 
D)  apportions estimated costs between two or more periods.

Question 17

When the accrual basis of accounting is applied, adjusting entries are not necessary.

Accepted Answer

A) True 
 B)False

Question 18

The adjusting entry for unearned revenues results in a debit to an asset account and a credit to a revenue account

Accepted Answer

A) True 
 B)False

Question 19

Under IFRS, companies must prepare quarterly financial statements which means they must prepare adjusting entries quarterly.

Accepted Answer

A) True 
 B)False

Question 20

Accountants divide the life of a business into specific time periods, such as monthly, quarterly and yearly.

Accepted Answer

A) True 
 B)False

A list of the accounts and their balances after all adjustments have been made is known as a(n):

Adjustments for accrued expenses are necessary to record the obligations that exist at the balance sheet date and to recognize the expenses that are applicable to the current accounting period.

Depreciation is the allocation of the cost of a long-lived asset to expense over its useful life in a rational and systematic manner.

Revenue is recognized in the period in which it was received rather than when it was earned.

Under ASPE, the term "depreciation" must be used for the cost allocation of all long-lived assets.

If an adjusting entry to record accrued revenue was not posted:

Some retail companies use a 52-week period, instead of exactly one year, for their fiscal year.

Accrued revenues are also called accrued liabilities

Revenue is not recorded in the accounting period when:

Prior to recording adjusting entries, revenues exceed expenses by $60,000. Adjusting entries for accrued wages of $5,000 and depreciation expense of $5,000 were made. Profit for the year would be:

Payments of expenses that will benefit more than one accounting period are referred to as prepaid expenses

Accumulated depreciation is an example of a contra asset account and its balance is deducted from the related asset in the financial statements.

Cost less accumulated depreciation is a measurement of the current value of an asset such as equipment or a building.

What type of accounts (i.e. asset, liability or owner's equity) are the following accounts?

The recording of wages earned but not yet paid is an example of an adjustment that:

When the accrual basis of accounting is applied, adjusting entries are not necessary.

The adjusting entry for unearned revenues results in a debit to an asset account and a credit to a revenue account

Under IFRS, companies must prepare quarterly financial statements which means they must prepare adjusting entries quarterly.

Accountants divide the life of a business into specific time periods, such as monthly, quarterly and yearly.

Accounting in Action

The Recording Process

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Accounting for Receivables

Long-Lived Assets

Current Liabilities

Financial Reporting Concepts

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and IFRS

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

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Exam 3: Adjusting the Accounts

A list of the accounts and their balances after all adjustments have been made is known as a(n):

Adjustments for accrued expenses are necessary to record the obligations that exist at the balance sheet date and to recognize the expenses that are applicable to the current accounting period.

Depreciation is the allocation of the cost of a long-lived asset to expense over its useful life in a rational and systematic manner.

Revenue is recognized in the period in which it was received rather than when it was earned.

Under ASPE, the term "depreciation" must be used for the cost allocation of all long-lived assets.

If an adjusting entry to record accrued revenue was not posted:

Some retail companies use a 52-week period, instead of exactly one year, for their fiscal year.

Accrued revenues are also called accrued liabilities

Revenue is not recorded in the accounting period when:

Prior to recording adjusting entries, revenues exceed expenses by $60,000. Adjusting entries for accrued wages of $5,000 and depreciation expense of $5,000 were made. Profit for the year would be:

Payments of expenses that will benefit more than one accounting period are referred to as prepaid expenses

Accumulated depreciation is an example of a contra asset account and its balance is deducted from the related asset in the financial statements.

Cost less accumulated depreciation is a measurement of the current value of an asset such as equipment or a building.

What type of accounts (i.e. asset, liability or owner's equity) are the following accounts?

The recording of wages earned but not yet paid is an example of an adjustment that:

When the accrual basis of accounting is applied, adjusting entries are not necessary.

The adjusting entry for unearned revenues results in a debit to an asset account and a credit to a revenue account

Under IFRS, companies must prepare quarterly financial statements which means they must prepare adjusting entries quarterly.

Accountants divide the life of a business into specific time periods, such as monthly, quarterly and yearly.

Accounting in Action

The Recording Process

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Accounting for Receivables

Long-Lived Assets

Current Liabilities

Financial Reporting Concepts

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and IFRS

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

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