Question 1

Which of the following entries would be made because of the matching principle?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Salary expense } & 1,000 & \
\hline \text { Accounts payable } & & 1,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Salary expense } & & 1,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Salary expense } & 1,000 & \
\hline \text { Salary payable } & & 1,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Unearned revenue } & & 1,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Salary expense } & 1,000 & \
\hline \text { Accounts payable } & & 1,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Salary expense } & & 1,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Salary expense } & 1,000 & \
\hline \text { Salary payable } & & 1,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Unearned revenue } & & 1,000 \
\hline
\end{array}$$ C

Question 2

Prepare a balance sheet from the adjusted trial balance below.
Deavours Photography
Adjusted Trial Balance
December 31,2012
 $\begin{array}{|l|r|r|} 
\hline& & \
\hline \text { Accounts } & \text { Debit } & \text { Credit } \
\hline \text { Cash } & \$ 2,000\\hline \text { Prepaid insurance } & 2,000 \
\hline \text { Office supplies } & 600 \
\hline \text { Office equipment } & 16,000 \\hline \text { Accumulated depreciation } & & \$ 3,000 \
\hline \text { Accounts payable } & & 5,000 \
\hline \text { Salaries payable } & & 900 \
\hline \text { Unearned servicerevenue } & & 2,500 \
\hline \text { C. Devours, capital } & & 7,450 \\hline \text { C. Devours, drawing } & 5,600 & \
\hline \text { Service revenue } & & 15,350 \
\hline \text { Salaries expense } & 4,600 &\\hline \text { Depreciation expense } & 1,000 & \
\hline \text { Supplies expense } & 400 & \
\hline \text { Insurance expense } & 2,000 & \
\hline \text { Totals } & \$ 34,200 & \$ 34,200\
\hline
\end{array}$

Accepted Answer

Deavours Photography
Balance Sheet
December 31, 2012
$\begin{array}{|l|r|r|l|r|}\hline\text { Assets }&&&\text { Liabilities }\
\hline \text { Cash } & & \$ 2,000 & \text { Accounts payable } & \$ 5,000 \
\hline \text { Prepaid insurance } & & 2,000 & \text { Salaries payable } & 900 \
\hline \text { Office supplies } & & & \text { Unearned service revenue } & \underline{2,500} \
\hline \text { Office equipment } & \$ 16,000 & & \text { Total liabilities } & \$ 8,400 \\hline \begin{array}{l}
\text { Less: Accumulated } \
\text { depreciation }
\end{array} & \underline{3.000} & \underline{13.000} \\hline&&&\text { Owner's Equity }\\hline & & & \text { C. Devours, capital } & \$ \$ 9,200 \
\hline \text { Total assets } && \$ 17,600 & \begin{array}{c}
\text { Total liabilities and } \
\text { owner's equity }
\end{array} & \$ 17,600 \
\hline
\end{array}$

Question 3

Smith Technical Services is working on a six-month job for a client,starting February 1.They will collect $48,000 from their customer when the job is finished.On March 1,their Accounts receivable account has a debit balance of $8,000.At the end of March,after monthly adjusting entries have been made,what will the balance in Accounts receivable be?

Accepted Answer

A)  Debit balance of $48,000 
B)  Credit balance of $8,000 
C)  Debit balance of $16,000 
D)  Debit balance of $12,000 
A)  Debit balance of $48,000 
B)  Credit balance of $8,000 
C)  Debit balance of $16,000 
D)  Debit balance of $12,000 C

Question 4

An entry that reflects the using up of a portion of a fixed asset's value would be a(n)________ entry.

Accepted Answer

A)  prepaid expense 
B)  accrued expense 
C)  accrued revenue 
D)  depreciation 
A)  prepaid expense 
B)  accrued expense 
C)  accrued revenue 
D)  depreciation

Question 5

Fleet Tutoring Services borrowed $12,000 and signed a one-year note payable on December 1,2012.The note bears interest at a rate of 5% per year.Fleet will repay the principal amount of $12,000 plus one year's interest of $600 on November 30 of the following year.Fleet accrues interest expense every month.What adjusting entry is needed on December 31?
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 6

Hank's Tax Planning Service has the following plant assets: Communications equipment: Cost,$4,800; useful life 8 years
Furniture: Cost,$15,840; useful life 12 years
Computer equipment: Cost,$10,080; useful life 4 years
-
Hank's monthly depreciation entry will include a:
A) debit to depreciation expense of $210.
B) credit to depreciation expense of $370.
C) debit to Accumulated Depreciation of $210.
D) credit to Accumulated Depreciation of $370.

Accepted Answer

D) Calculations: $4

Question 7

Which of the following reports a company's results of operations?

Accepted Answer

A)  Balance sheet 
B)  Statement of owner's equity 
C)  Adjusted trial balance 
D)  Income statement 
A)  Balance sheet 
B)  Statement of owner's equity 
C)  Adjusted trial balance 
D)  Income statement

Question 8

Real Losers,a diet magazine,collected $360,000 in subscription revenue in May.Each subscriber will receive an issue of the magazine for each of the next 12 months,beginning with the June issue.
-The company uses the accrual method of accounting.What entry is recorded when the cash is collected in May?
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 9

On July 1,Alpha Company prepaid rent for a small equipment storage area.They paid $12,000 to rent the area for the period of July 1 through the end of the year.Please provide the journal entry needed on July 1 when the payment is made.
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 10

The table below represents Able Company's supplies account.Please supply the missing amount. $\begin{array}{|l|r|}
\hline\text { Beginning supplies } & 5,000 \
\hline\text { Supplies purchased } & 6,000 \
\hline \text { Supplies expense } & 8,000 \
\hline \text { Ending supplies } & 7\\hline
\end{array}$

Accepted Answer

A)  $9,000 
B)  $1,000 
C)  $3,000 
D)  $11,000 
A)  $9,000 
B)  $1,000 
C)  $3,000 
D)  $11,000

Question 11

Which of the following reports a company's financial position?

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Adjusted trial balance 
D)  Statement of owner's equity 
A)  Balance sheet 
B)  Income statement 
C)  Adjusted trial balance 
D)  Statement of owner's equity

Question 12

The revenue principle guides accountants in which of the following ways?

Accepted Answer

A)  Ensures that information is reported at regular intervals 
B)  Determines when to record expenses 
C)  Determines when to record revenue 
D)  Dictates that expenses be deducted from revenues 
A)  Ensures that information is reported at regular intervals 
B)  Determines when to record expenses 
C)  Determines when to record revenue 
D)  Dictates that expenses be deducted from revenues

Question 13

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly
-.As of June 30,2012,Hank's balance sheet will show book value for this equipment of:
A) $6,480.
B) $7,200.
C) $120.
D) $720.

Accepted Answer

A) Calculations: $7

Question 14

Which of the following accounts would be used under the accrual method of accounting,but NOT under the cash-basis method of accounting.

Accepted Answer

A)  Cash 
B)  Unearned revenue 
C)  Equipment 
D)  Salary expense 
A)  Cash 
B)  Unearned revenue 
C)  Equipment 
D)  Salary expense

Question 15

Pattie's Event Planning Service has just prepared the unadjusted trial balance,which shows the following balances: Salary expense: Debit $\$ 6,000$
Service revenues: Credit $\$ 20,000$
Interest expense: 0
Pattie's salaries are $2,000 per week and are paid out at the end of the day on Fridays.The end of the month falls on a Thursday.Patti will make the appropriate accrual adjustment and post to the ledger.The final adjusted balance of Salary payable,as shown on the adjusted trial balance,will be a:

Accepted Answer

A)  credit balance of $1,600. 
B)  credit balance of $3,600. 
C)  debit balance of $3,600. 
D)  credit balance of $400. 
A)  credit balance of $1,600. 
B)  credit balance of $3,600. 
C)  debit balance of $3,600. 
D)  credit balance of $400.

Question 16

A contra account has two characteristics: (1)a contra account is paired with a companion account,and (2)a contra account's normal balance is the same as that of the companion account.

Accepted Answer

A) True 
 B)False

Question 17

The table below represents Able Company's supplies account.Please supply the missing amount. $\begin{array}{|l|r|}
\hline\text { Beginning supplies } & 2,000 \
\hline\text { Supplies purchased } & ? \
\hline \text { Supplies expense } & 8,000 \
\hline \text { Ending supplies } & 3,000 \
\hline
\end{array}$

Accepted Answer

A)  $9,000 
B)  $5,000 
C)  $11,000 
D)  $13,000 
A)  $9,000 
B)  $5,000 
C)  $11,000 
D)  $13,000

Question 18

The accountant for Hobson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year.Which of the following is TRUE?

Accepted Answer

A)  Total liabilities are overstated. 
B)  Total liabilities are understated. 
C)  Total assets are overstated. 
D)  Total assets are understated. 
A)  Total liabilities are overstated. 
B)  Total liabilities are understated. 
C)  Total assets are overstated. 
D)  Total assets are understated.

Question 19

If a company is using the cash-basis method of accounting,when is revenue recorded?

Accepted Answer

A)  When services are rendered, even though cash may be received at a later date 
B)  When cash is received, prior to the services being rendered 
C)  When cash is received, at a time after the services were rendered 
D)  When cash is received, either prior to the services being rendered or at a time after the services were rendered 
A)  When services are rendered, even though cash may be received at a later date 
B)  When cash is received, prior to the services being rendered 
C)  When cash is received, at a time after the services were rendered 
D)  When cash is received, either prior to the services being rendered or at a time after the services were rendered

Question 20

Smith owns manufacturing equipment that originally cost $12,600 and has an estimated useful life of 7 years.Smith records depreciation monthly in the amount of $100.

Accepted Answer

A) True 
 B)False

Which of the following entries would be made because of the matching principle?

An entry that reflects the using up of a portion of a fixed asset's value would be a(n)________ entry.

Which of the following reports a company's results of operations?

On July 1,Alpha Company prepaid rent for a small equipment storage area.They paid $12,000 to rent the area for the period of July 1 through the end of the year.Please provide the journal entry needed on July 1 when the payment is made.

The table below represents Able Company's supplies account.Please supply the missing amount. Beginning supplies 5,000 Supplies purchased 6,000 Supplies expense 8,000 Ending supplies 7

Which of the following reports a company's financial position?

The revenue principle guides accountants in which of the following ways?

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly -.As of June 30,2012,Hank's balance sheet will show book value for this equipment of: A) $6,480. B) $7,200. C) $120. D) $720.

Which of the following accounts would be used under the accrual method of accounting,but NOT under the cash-basis method of accounting.

A contra account has two characteristics: (1)a contra account is paired with a companion account,and (2)a contra account's normal balance is the same as that of the companion account.

The table below represents Able Company's supplies account.Please supply the missing amount. Beginning supplies 2,000 Supplies purchased ? Supplies expense 8,000 Ending supplies 3,000

The accountant for Hobson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year.Which of the following is TRUE?

If a company is using the cash-basis method of accounting,when is revenue recorded?

Smith owns manufacturing equipment that originally cost $12,600 and has an estimated useful life of 7 years.Smith records depreciation monthly in the amount of $100.

Accounting and the Business Environment

Recording Business Transactions

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 3: The Adjusting Process

Which of the following entries would be made because of the matching principle?

An entry that reflects the using up of a portion of a fixed asset's value would be a(n)________ entry.

Which of the following reports a company's results of operations?

On July 1,Alpha Company prepaid rent for a small equipment storage area.They paid $12,000 to rent the area for the period of July 1 through the end of the year.Please provide the journal entry needed on July 1 when the payment is made.

The table below represents Able Company's supplies account.Please supply the missing amount. Beginning supplies 5,000 Supplies purchased 6,000 Supplies expense 8,000 Ending supplies 7

Which of the following reports a company's financial position?

The revenue principle guides accountants in which of the following ways?

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly -.As of June 30,2012,Hank's balance sheet will show book value for this equipment of: A) $6,480. B) $7,200. C) $120. D) $720.

Which of the following accounts would be used under the accrual method of accounting,but NOT under the cash-basis method of accounting.

A contra account has two characteristics: (1)a contra account is paired with a companion account,and (2)a contra account's normal balance is the same as that of the companion account.

The table below represents Able Company's supplies account.Please supply the missing amount. Beginning supplies 2,000 Supplies purchased ? Supplies expense 8,000 Ending supplies 3,000

The accountant for Hobson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year.Which of the following is TRUE?

If a company is using the cash-basis method of accounting,when is revenue recorded?

Smith owns manufacturing equipment that originally cost $12,600 and has an estimated useful life of 7 years.Smith records depreciation monthly in the amount of $100.

Accounting and the Business Environment

Recording Business Transactions

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters