Question 1

Holly's Holiday Shoppe would most likely end their fiscal year in which month?

Accepted Answer

A) June 
B) November 
C) December 
D) Any of the above. 
A) June 
B) November 
C) December 
D) Any of the above. A

Question 2

Which of the following accounts would NOT be adjusted?

Accepted Answer

A) Accumulated Depreciation 
B) Cash 
C) Depreciation Expense 
D) Wages 
A) Accumulated Depreciation 
B) Cash 
C) Depreciation Expense 
D) Wages B

Question 3

Recording the purchase of supplies in a prepaid account would be an example of a(n):

Accepted Answer

A) deferred expense. 
B) deferred revenue. 
C) accrued expense. 
D) accrued revenue. 
A) deferred expense. 
B) deferred revenue. 
C) accrued expense. 
D) accrued revenue. A

Question 4

A piece of equipment cost $700 and has a salvage value of $500. If it has an 5-year life, the annual depreciation expense under straight-line depreciation would be:

Accepted Answer

A) $140. 
B) $40. 
C) $500. 
D) $200. 
A) $140. 
B) $40. 
C) $500. 
D) $200.

Question 5

The account to which revenue and expenses are closed is called:

Accepted Answer

A) Cash. 
B) Retained Earnings. 
C) Common Stock. 
D) Sales. 
A) Cash. 
B) Retained Earnings. 
C) Common Stock. 
D) Sales.

Question 6

Which of the following accounts would NOT be debited or credited in an adjusting entry?

Accepted Answer

A) Supplies Expense 
B) Office Equipment 
C) Wages Expense 
D) Wages Payable 
A) Supplies Expense 
B) Office Equipment 
C) Wages Expense 
D) Wages Payable

Question 7

On January 1, Daisy Company paid $6,400 for six months rent. Assume no other adjusting entries have been done this fiscal year. What would the adjusting entry be on March 31?

Accepted Answer

A) Debit Rent Expense $1,067, credit Prepaid Rent $1,067 
B) Debit Rent Expense $1,067, credit Cash $1,067 
C) Debit Rent Expense $3,200, credit Prepaid Rent $3,200 
D) Debit Rent Expense $3,200, credit Cash $3,200 
A) Debit Rent Expense $1,067, credit Prepaid Rent $1,067 
B) Debit Rent Expense $1,067, credit Cash $1,067 
C) Debit Rent Expense $3,200, credit Prepaid Rent $3,200 
D) Debit Rent Expense $3,200, credit Cash $3,200

Question 8

Closing entries included debits to revenues for a total of $5,300, credits to expenses for a total of $3,400, and a credit to dividends for $700. The net income for the month was:

Accepted Answer

A) $700. 
B) $1,900. 
C) $3,400. 
D) $4,600. 
A) $700. 
B) $1,900. 
C) $3,400. 
D) $4,600.

Question 9

Supplies on hand were $434 of the original $1,134. The adjusting amount for supplies for the year would be:

Accepted Answer

A) $1,134. 
B) $434. 
C) $700. 
D) some other number. 
A) $1,134. 
B) $434. 
C) $700. 
D) some other number.

Question 10

The balance for the Land account on the adjusted trial balance:

Accepted Answer

A) must be equal to the balance on the unadjusted trial balance. 
B) must be greater than the balance on the unadjusted trial balance. 
C) must be less than the balance on the unadjusted trial balance. 
D) has no relationship to the balance on the unadjusted trial balance. 
A) must be equal to the balance on the unadjusted trial balance. 
B) must be greater than the balance on the unadjusted trial balance. 
C) must be less than the balance on the unadjusted trial balance. 
D) has no relationship to the balance on the unadjusted trial balance.

Question 11

With an accrued revenue, cash is received first and revenue is earned and recorded later.

Accepted Answer

A) True 
 B)False

Question 12

The unadjusted trial balance for Supplies shows a normal balance of $525. If $100 of supplies were expensed, the adjusted trial balance would show a debit balance of $625 in Supplies.

Accepted Answer

A) True 
 B)False

Question 13

The adjusted trial balance proves that:

Accepted Answer

A) all adjusting entries have been recorded correctly. 
B) debit totals equal credit totals. 
C) no adjusting entry has been entered twice. 
D) the balance of the adjusted trial balance is correct. 
A) all adjusting entries have been recorded correctly. 
B) debit totals equal credit totals. 
C) no adjusting entry has been entered twice. 
D) the balance of the adjusted trial balance is correct.

Question 14

The revenue recognition principle states that revenues should be recognized

Accepted Answer

A) when cash is received. 
B) when they are earned, if cash will be received within the year. 
C) when they are earned. 
D) within six months of receiving cash. 
A) when cash is received. 
B) when they are earned, if cash will be received within the year. 
C) when they are earned. 
D) within six months of receiving cash.

Question 15

Respectively, Inventory, Accounts Receivable, and Accounts Payable are:

Accepted Answer

A) temporary, permanent, and temporary accounts. 
B) temporary, temporary, and permanent accounts. 
C) all temporary accounts. 
D) all permanent accounts. 
A) temporary, permanent, and temporary accounts. 
B) temporary, temporary, and permanent accounts. 
C) all temporary accounts. 
D) all permanent accounts.

Question 16

A machine with a salvage value of $2,000 and a cost of $40,000 was purchased on January 1, 2012. What is the depreciation expense for 2012 if the company uses straight-line depreciation for 10 years?

Accepted Answer

A) $40,000 
B) $38,000 
C) $4,000 
D) $3,800 
A) $40,000 
B) $38,000 
C) $4,000 
D) $3,800

Question 17

Using the adjusted trial balance, the first financial statement to prepare is the Income Statement.

Accepted Answer

A) True 
 B)False

Question 18

The matching principle in accounting requires the matching of:

Accepted Answer

A) revenue earned with the assets used to produce the revenue. 
B) revenue earned with the assets used less the liabilities incurred. 
C) revenue earned with the liabilities used to produce the revenue. 
D) revenue earned with the expenses incurred to produce the revenue. 
A) revenue earned with the assets used to produce the revenue. 
B) revenue earned with the assets used less the liabilities incurred. 
C) revenue earned with the liabilities used to produce the revenue. 
D) revenue earned with the expenses incurred to produce the revenue.

Question 19

Recording Prepaid Rent would be an example of a(n):

Accepted Answer

A) deferred expense. 
B) deferred revenue. 
C) accrued expense. 
D) accrued revenue. 
A) deferred expense. 
B) deferred revenue. 
C) accrued expense. 
D) accrued revenue.

Question 20

Accounts Receivable and Accounts Payable are examples of accruals.

Accepted Answer

A) True 
 B)False

Holly's Holiday Shoppe would most likely end their fiscal year in which month?

Which of the following accounts would NOT be adjusted?

Recording the purchase of supplies in a prepaid account would be an example of a(n):

A piece of equipment cost $700 and has a salvage value of $500. If it has an 5-year life, the annual depreciation expense under straight-line depreciation would be:

The account to which revenue and expenses are closed is called:

Which of the following accounts would NOT be debited or credited in an adjusting entry?

On January 1, Daisy Company paid $6,400 for six months rent. Assume no other adjusting entries have been done this fiscal year. What would the adjusting entry be on March 31?

Closing entries included debits to revenues for a total of $5,300, credits to expenses for a total of $3,400, and a credit to dividends for $700. The net income for the month was:

Supplies on hand were $434 of the original $1,134. The adjusting amount for supplies for the year would be:

The balance for the Land account on the adjusted trial balance:

With an accrued revenue, cash is received first and revenue is earned and recorded later.

The unadjusted trial balance for Supplies shows a normal balance of $525. If $100 of supplies were expensed, the adjusted trial balance would show a debit balance of $625 in Supplies.

The adjusted trial balance proves that:

The revenue recognition principle states that revenues should be recognized

Respectively, Inventory, Accounts Receivable, and Accounts Payable are:

A machine with a salvage value of $2,000 and a cost of $40,000 was purchased on January 1, 2012. What is the depreciation expense for 2012 if the company uses straight-line depreciation for 10 years?

Using the adjusted trial balance, the first financial statement to prepare is the Income Statement.

The matching principle in accounting requires the matching of:

Recording Prepaid Rent would be an example of a(n):

Accounts Receivable and Accounts Payable are examples of accruals.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: Adjusting and Closing Entries

Holly's Holiday Shoppe would most likely end their fiscal year in which month?

Which of the following accounts would NOT be adjusted?

Recording the purchase of supplies in a prepaid account would be an example of a(n):

A piece of equipment cost $700 and has a salvage value of $500. If it has an 5-year life, the annual depreciation expense under straight-line depreciation would be:

The account to which revenue and expenses are closed is called:

Which of the following accounts would NOT be debited or credited in an adjusting entry?

On January 1, Daisy Company paid $6,400 for six months rent. Assume no other adjusting entries have been done this fiscal year. What would the adjusting entry be on March 31?

Closing entries included debits to revenues for a total of $5,300, credits to expenses for a total of $3,400, and a credit to dividends for $700. The net income for the month was:

Supplies on hand were $434 of the original $1,134. The adjusting amount for supplies for the year would be:

The balance for the Land account on the adjusted trial balance:

With an accrued revenue, cash is received first and revenue is earned and recorded later.

The unadjusted trial balance for Supplies shows a normal balance of $525. If $100 of supplies were expensed, the adjusted trial balance would show a debit balance of $625 in Supplies.

The adjusted trial balance proves that:

The revenue recognition principle states that revenues should be recognized

Respectively, Inventory, Accounts Receivable, and Accounts Payable are:

A machine with a salvage value of $2,000 and a cost of $40,000 was purchased on January 1, 2012. What is the depreciation expense for 2012 if the company uses straight-line depreciation for 10 years?

Using the adjusted trial balance, the first financial statement to prepare is the Income Statement.

The matching principle in accounting requires the matching of:

Recording Prepaid Rent would be an example of a(n):

Accounts Receivable and Accounts Payable are examples of accruals.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters