Question 1

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

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 2

The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of unearned service revenue that has now been earned. 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 3

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 4

Which of the following entries would be recorded ONLY if a company is using the accrual method of accounting?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 5

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.

Accepted Answer

The answer of On July 1, Alpha Company prepaid rent...

Question 6

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. By the end of December, how much Subscription revenue has been earned?

Accepted Answer

A) $120,000 
B) $12,000 
C) $360,000 
D) $210,000 
A) $120,000 
B) $12,000 
C) $360,000 
D) $210,000

Question 7

Below is the adjusted trial balance for Parsons Repair Service. Please prepare the balance sheet at December 31, 2012.

Accepted Answer

The answer of Below is the adjusted trial balance for...

Question 8

Which of the following is NOT considered an interim accounting period?

Accepted Answer

A) Monthly 
B) Quarterly 
C) Annually 
D) Semi-annually 
A) Monthly 
B) Quarterly 
C) Annually 
D) Semi-annually

Question 9

In cash-basis accounting, revenue is recognized when cash is received and expenses are recognized when they are paid.

Accepted Answer

A) True 
 B)False

Question 10

Pattie's Event Planning Service has just prepared the unadjusted trial balance, which shows the following balances:   Late in this month, she began working with a new client, providing event planning services for an upcoming event. When the event is complete, in the following month, she will collect the full amount of $900 from her client. As of the end of this month, she has rendered one-third of the services covered by the contract. She makes accrual adjustments monthly. The final adjusted balance of Service revenues, as shown on the adjusted trial balance, should be a:

Accepted Answer

A) debit balance of $300. 
B) credit balance of $3,900. 
C) debit balance of $3,300. 
D) credit balance of $3,300. 
A) debit balance of $300. 
B) credit balance of $3,900. 
C) debit balance of $3,300. 
D) credit balance of $3,300.

Question 11

The adjusting entry to record Depreciation expense accomplishes which of the following?

Accepted Answer

A) Records an expense 
B) Updates a contra asset 
C) Updates a liability 
D) Both A and B 
A) Records an expense 
B) Updates a contra asset 
C) Updates a liability 
D) Both A and B

Question 12

Double-A Public Relations Firm got a new client on September 1. Double-A agreed to provide services to the new client at a rate of $250 per month for a three-month period beginning September 1. Double-A required the client to pay for the entire period on September 1. On September 30, Double-A needs to make an adjusting entry. Please provide that adjusting entry.

Accepted Answer

The answer of Double-A Public Relations Firm got a new...

Question 13

At January 1, Smith has a beginning balance in Unearned revenue of $1,000. During January, he earns $800 of that amount. He also collects $4,000 from a new customer for services to be rendered the following month. As of the end of January, the Unearned revenue account had a balance of $4,800.

Accepted Answer

A) True 
 B)False

Question 14

On July 1, Alpha Company prepaid rent for a small equipment storage area in the amount of $12,000 for the period of July 1 through the end of the year. At the end of July, an adjustment entry is needed. Please provide that adjustment entry.

Accepted Answer

The answer of On July 1, Alpha Company prepaid rent...

Question 15

In the case of Unearned revenue, the adjusting entry at the end of the period includes a credit to Service revenue.

Accepted Answer

A) True 
 B)False

Question 16

Active Education sells tickets in advance for their weekly productions and records the proceeds as Unearned revenue. At the end of each month, they make an adjusting entry to account for the tickets used during the month (Ticket revenue.)At March 1, the Unearned revenue account had a credit balance of $3,000. During March, they sold 300 tickets at $20 each, and 250 tickets were used during the month. What is the balance in Unearned revenue at the end of March?

Accepted Answer

A) Credit balance of $4,000 
B) Debit balance of $4,000 
C) Credit balance of $2,000 
D) Debit balance of $2,000 
A) Credit balance of $4,000 
B) Debit balance of $4,000 
C) Credit balance of $2,000 
D) Debit balance of $2,000

Question 17

The accountant for Barnes Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following is TRUE?

Accepted Answer

A) Total revenue is overstated. 
B) Total revenue is understated. 
C) Total expenses are overstated. 
D) Total expenses are understated. 
A) Total revenue is overstated. 
B) Total revenue is understated. 
C) Total expenses are overstated. 
D) Total expenses are understated.

Question 18

ABC Company signed a one-year $12,000 note payable at 8% interest on May 1, 2012. How much interest expense must be accrued on May 31, 2012?

Accepted Answer

A) $960 
B) $320 
C) $80 
D) $40 
A) $960 
B) $320 
C) $80 
D) $40

Question 19

Century Security Services purchased new communications equipment for $30,000 on October 1, 2012. It will have a useful life of 5 years. Century records depreciation every month. Please provide the depreciation entry needed on October 31, 2012.

Accepted Answer

The answer of Century Security Services purchased new communications equipment...

Question 20

Which of the following accounts does cash-basis accounting ignore?

Accepted Answer

A) Payables 
B) Revenue 
C) Cash 
D) Expenses 
A) Payables 
B) Revenue 
C) Cash 
D) Expenses

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

The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of unearned service revenue that has now been earned. Which of the following is TRUE?

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 entries would be recorded ONLY if a company is using the accrual method of accounting?

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.

Below is the adjusted trial balance for Parsons Repair Service. Please prepare the balance sheet at December 31, 2012.

Which of the following is NOT considered an interim accounting period?

In cash-basis accounting, revenue is recognized when cash is received and expenses are recognized when they are paid.

The adjusting entry to record Depreciation expense accomplishes which of the following?

At January 1, Smith has a beginning balance in Unearned revenue of $1,000. During January, he earns $800 of that amount. He also collects $4,000 from a new customer for services to be rendered the following month. As of the end of January, the Unearned revenue account had a balance of $4,800.

On July 1, Alpha Company prepaid rent for a small equipment storage area in the amount of $12,000 for the period of July 1 through the end of the year. At the end of July, an adjustment entry is needed. Please provide that adjustment entry.

In the case of Unearned revenue, the adjusting entry at the end of the period includes a credit to Service revenue.

The accountant for Barnes Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following is TRUE?

ABC Company signed a one-year $12,000 note payable at 8% interest on May 1, 2012. How much interest expense must be accrued on May 31, 2012?

Century Security Services purchased new communications equipment for $30,000 on October 1, 2012. It will have a useful life of 5 years. Century records depreciation every month. Please provide the depreciation entry needed on October 31, 2012.

Which of the following accounts does cash-basis accounting ignore?

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

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters

Exam 3: The Adjusting Process

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

The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of unearned service revenue that has now been earned. Which of the following is TRUE?

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 entries would be recorded ONLY if a company is using the accrual method of accounting?

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.

Below is the adjusted trial balance for Parsons Repair Service. Please prepare the balance sheet at December 31, 2012.

Which of the following is NOT considered an interim accounting period?

In cash-basis accounting, revenue is recognized when cash is received and expenses are recognized when they are paid.

The adjusting entry to record Depreciation expense accomplishes which of the following?

At January 1, Smith has a beginning balance in Unearned revenue of $1,000. During January, he earns $800 of that amount. He also collects $4,000 from a new customer for services to be rendered the following month. As of the end of January, the Unearned revenue account had a balance of $4,800.

On July 1, Alpha Company prepaid rent for a small equipment storage area in the amount of $12,000 for the period of July 1 through the end of the year. At the end of July, an adjustment entry is needed. Please provide that adjustment entry.

In the case of Unearned revenue, the adjusting entry at the end of the period includes a credit to Service revenue.

The accountant for Barnes Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following is TRUE?

ABC Company signed a one-year $12,000 note payable at 8% interest on May 1, 2012. How much interest expense must be accrued on May 31, 2012?

Century Security Services purchased new communications equipment for $30,000 on October 1, 2012. It will have a useful life of 5 years. Century records depreciation every month. Please provide the depreciation entry needed on October 31, 2012.

Which of the following accounts does cash-basis accounting ignore?

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

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters