Question 1

It is acceptable to record prepayment of expenses as debits to expense accounts.

Accepted Answer

A) True 
 B)False

Question 2

Asset and liability balances are transferred from the adjusted trial balance to the income statement.

Accepted Answer

A) True 
 B)False

Question 3

On May 1,Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30 of the following year.The Cash receipt was recorded as unearned fees and at year-end on December 31,$1,000 of the fees had been earned.The adjusting entry on December 31 would include:

Accepted Answer

A) A debit to Unearned Fees for $500. 
B) A credit to Unearned Fees for $500. 
C) A credit to Earned Fees for $1,000. 
D) A debit to Earned Fees for $1,000. 
E) A debit to Earned Fees for $500. 
A) A debit to Unearned Fees for $500. 
B) A credit to Unearned Fees for $500. 
C) A credit to Earned Fees for $1,000. 
D) A debit to Earned Fees for $1,000. 
E) A debit to Earned Fees for $500.

Question 4

On January 1,Southwest College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester,which spans four months beginning on January 2.What amount of tuition revenue should the college recognize on January 31?

Accepted Answer

A) $300,000. 
B) $600,000. 
C) $800,000. 
D) $900,000. 
E) $1,200,000. 
A) $300,000. 
B) $600,000. 
C) $800,000. 
D) $900,000. 
E) $1,200,000.

Question 5

On January 1,Alco Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000.Alco uses the straight-line depreciation method to allocate costs.The adjusting entry needed on December 31 is:

Accepted Answer

A) Debit Depreciation Expense, $9,000; credit Accumulated Depreciation, $9,000. 
B) Debit Depreciation Expense, $18,000; credit Accumulated Depreciation, $18,000. 
C) Debit Depreciation Expense, $90,000; credit Accumulated Depreciation, $90,000. 
D) Debit Depreciation Expense, $18,000; credit Equipment, $18,000. 
E) Debit Depreciation Expense, $9,000; credit Equipment, $9,000. 
A) Debit Depreciation Expense, $9,000; credit Accumulated Depreciation, $9,000. 
B) Debit Depreciation Expense, $18,000; credit Accumulated Depreciation, $18,000. 
C) Debit Depreciation Expense, $90,000; credit Accumulated Depreciation, $90,000. 
D) Debit Depreciation Expense, $18,000; credit Equipment, $18,000. 
E) Debit Depreciation Expense, $9,000; credit Equipment, $9,000.

Question 6

A fiscal year refers to an organization's accounting period that spans twelve consecutive months or 52 weeks.

Accepted Answer

A) True 
 B)False

Question 7

What is the proper adjusting entry at December 31,the end of the accounting period,if the balance in the prepaid insurance account is $7,750 before adjustment,and the unexpired amount per analysis of policies is,$3,250?

Accepted Answer

A) Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250. 
B) Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500. 
C) Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500. 
D) Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750. 
E) Debit Cash, $7,750; Credit Prepaid Insurance, $7,750. 
A) Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250. 
B) Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500. 
C) Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500. 
D) Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750. 
E) Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

Question 8

Adjusting is a three-step process (1)_________________,(2)___________________,and (3)_______________________.

Accepted Answer

Accrued expenses; ac

Question 9

Explain the purpose of adjusting entries at the end of a period.

Accepted Answer

Even though external transactions may be

Question 10

What is an adjusted trial balance?
 Why is it prepared?

Accepted Answer

An adjusted trial balance is a list of a

Question 11

PPW Co.leased a portion of its store to another company for eight months beginning on October 1,at a monthly rate of $800.This other company paid the entire $6,400 cash on October 1,which PPW Co.recorded as unearned revenue.The journal entry made by PPW Co.at year-end on December 31 would include:

Accepted Answer

A) A debit to Rent Earned for $2,400. 
B) A credit to Unearned Rent for $2,400. 
C) A debit to Cash for $6,400. 
D) A credit to Rent Earned for $2,400. 
E) A debit to Unearned Rent for $4,000. 
A) A debit to Rent Earned for $2,400. 
B) A credit to Unearned Rent for $2,400. 
C) A debit to Cash for $6,400. 
D) A credit to Rent Earned for $2,400. 
E) A debit to Unearned Rent for $4,000.

Question 12

A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday.If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday,the month-end adjusting entry to record the salaries earned but unpaid is:

Accepted Answer

A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. 
B) Debit Salaries Expense $400 and credit Salaries Payable $400. 
C) Debit Salaries Expense $600 and credit Salaries Payable $600. 
D) Debit Salaries Payable $400 and credit Salaries Expense $400. 
E) Debit Salaries Expense $400 and credit Cash $400. 
A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. 
B) Debit Salaries Expense $400 and credit Salaries Payable $400. 
C) Debit Salaries Expense $600 and credit Salaries Payable $600. 
D) Debit Salaries Payable $400 and credit Salaries Expense $400. 
E) Debit Salaries Expense $400 and credit Cash $400.

Question 13

Costs incurred during an accounting period but unpaid and unrecorded are accrued expenses.

Accepted Answer

A) True 
 B)False

Question 14

Manning,Co.collected 6-months' rent in advance from a tenant on November 1 of the current year.When it collected the cash,it recorded the following entry:

Accepted Answer

The answer of Manning,Co.collected 6-months' rent in advance from a...

Question 15

The adjusting entry to record an accrued revenue is:

Accepted Answer

A) Increase an expense; increase a liability. 
B) Increase an asset; increase revenue. 
C) Decrease a liability; increase revenue. 
D) Increase an expense; decrease an asset. 
E) Increase an expense; decrease a liability. 
A) Increase an expense; increase a liability. 
B) Increase an asset; increase revenue. 
C) Decrease a liability; increase revenue. 
D) Increase an expense; decrease an asset. 
E) Increase an expense; decrease a liability.

Question 16

The accrual basis of accounting reflects the principle that revenue is recorded when it is earned,not when cash is received.

Accepted Answer

A) True 
 B)False

Question 17

The unadjusted trial balance and the adjustment data for Harris Training Institute are given below along with adjusting entry information.What is the impact of the adjusting entries on the balance sheet?
 Show calculation for total assets,total liabilities,and owner's equity without the adjustments; show calculation for total assets,total liabilities,and owner's equity with the adjustments.Which one gives the most accurate presentation of the balance sheet?
   Additional information items:
a.The Prepaid Insurance account consists of a payment for a 1 year policy.An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end.
b.A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned Rent.
c.Accrued interest expense on the note payable of $1,000 has been incurred but not paid.

Accepted Answer

@#IMG-DLM& The accrual basis gives the most accura

Question 18

Western Company had $500 of store supplies available at the beginning of the current year.During the year Western Company purchased $2,750 worth of store supplies.On December 31 of this year $375 worth of store supplies remained.
a.Calculate the amount of Western Company's store supplies expense for the current year.(Show your calculations.)
b.Prepare the journal entry to adjust the supplies account.

Accepted Answer

@#IMG-DLM& b. 12/31 Store Supplies expen

Question 19

Salvo Co.had the following transactions in the last two months of its year ended December 31.Prepare entries for these transactions under the method that records prepaid expenses as expenses and records unearned revenues as revenues.Also prepare adjusting entries at the end of the year.

Accepted Answer

The answer of Salvo Co.had the following transactions in the...

Question 20

The adjusted trial balance contains information pertaining to:

Accepted Answer

A) Asset accounts only. 
B) Balance sheet accounts only. 
C) Income statement accounts only. 
D) All general ledger accounts. 
E) Revenue accounts only. 
A) Asset accounts only. 
B) Balance sheet accounts only. 
C) Income statement accounts only. 
D) All general ledger accounts. 
E) Revenue accounts only.

Exam 3: Adjusting Accounts and Preparing Financial Statements

It is acceptable to record prepayment of expenses as debits to expense accounts.

Asset and liability balances are transferred from the adjusted trial balance to the income statement.

On January 1,Southwest College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester,which spans four months beginning on January 2.What amount of tuition revenue should the college recognize on January 31?

On January 1,Alco Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000.Alco uses the straight-line depreciation method to allocate costs.The adjusting entry needed on December 31 is:

A fiscal year refers to an organization's accounting period that spans twelve consecutive months or 52 weeks.

What is the proper adjusting entry at December 31,the end of the accounting period,if the balance in the prepaid insurance account is $7,750 before adjustment,and the unexpired amount per analysis of policies is,$3,250?

Adjusting is a three-step process (1)_________________,(2)___________________,and (3)_______________________.

Explain the purpose of adjusting entries at the end of a period.

What is an adjusted trial balance? Why is it prepared?

PPW Co.leased a portion of its store to another company for eight months beginning on October 1,at a monthly rate of $800.This other company paid the entire $6,400 cash on October 1,which PPW Co.recorded as unearned revenue.The journal entry made by PPW Co.at year-end on December 31 would include:

Costs incurred during an accounting period but unpaid and unrecorded are accrued expenses.

Manning,Co.collected 6-months' rent in advance from a tenant on November 1 of the current year.When it collected the cash,it recorded the following entry:

The adjusting entry to record an accrued revenue is:

The accrual basis of accounting reflects the principle that revenue is recorded when it is earned,not when cash is received.

Salvo Co.had the following transactions in the last two months of its year ended December 31.Prepare entries for these transactions under the method that records prepaid expenses as expenses and records unearned revenues as revenues.Also prepare adjusting entries at the end of the year.

The adjusted trial balance contains information pertaining to:

Accounting in Business

Analyzing and Recording Transactions

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters

Adjusting is a three-step process (1)_______,(2)_,and (3)_______________.