Question 1

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Accepted Answer

A) depreciation 
B) deferral 
C) accrual 
D) inventory 
A) depreciation 
B) deferral 
C) accrual 
D) inventory

Question 2

Revenues and expenses should be recorded in the same period to which they relate.

Accepted Answer

A) True 
 B)False

Question 3

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as an

Accepted Answer

A) asset 
B) liability 
C) contra asset 
D) stockholders' equity 
A) asset 
B) liability 
C) contra asset 
D) stockholders' equity

Question 4

The net book value of a fixed asset is determined by the original cost

Accepted Answer

A) less accumulated depreciation 
B) less depreciation expense 
C) less accumulated depreciation plus depreciation expense 
D) plus accumulated depreciation 
A) less accumulated depreciation 
B) less depreciation expense 
C) less accumulated depreciation plus depreciation expense 
D) plus accumulated depreciation

Question 5

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

Accepted Answer

A) True 
 B)False

Question 6

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Accepted Answer

A) True 
 B)False

Question 7

The net income reported on the income statement is $58,000 .However , adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Accepted Answer

A) $56,700 
B) $58,000 
C) $55,800 
D) $54,500 
A) $56,700 
B) $58,000 
C) $55,800 
D) $54,500

Question 8

Adjusting journal entries are dated on the last day of the period.

Accepted Answer

A) True 
 B)False

Question 9

Accrued revenues would appear on the balance sheet as

Accepted Answer

A) assets 
B) liabilities 
C) stockholders' equity 
D) prepaid expenses 
A) assets 
B) liabilities 
C) stockholders' equity 
D) prepaid expenses

Question 10

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

Accepted Answer

A) Record payment of fees earned. 
B) Record fees earned at the end of the month. 
C) Record fees that have not been earned at the end of the month. 
D) Record payment of fees to be earned. 
A) Record payment of fees earned. 
B) Record fees earned at the end of the month. 
C) Record fees that have not been earned at the end of the month. 
D) Record payment of fees to be earned.

Question 11

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Accepted Answer

A) True 
 B)False

Question 12

Deferred expenses have

Accepted Answer

A) not yet been recorded as expenses but have been paid 
B) been recorded as expenses and paid 
C) been incurred and paid 
D) not yet been recorded as expenses 
A) not yet been recorded as expenses but have been paid 
B) been recorded as expenses and paid 
C) been incurred and paid 
D) not yet been recorded as expenses

Question 13

Generally accepted accounting principles require that companies use the of accounting.

Accepted Answer

A) cash basis 
B) deferral basis 
C) accrual basis 
D) account basis 
A) cash basis 
B) deferral basis 
C) accrual basis 
D) account basis

Question 14

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

Accepted Answer

A) debit Insurance Expense,$3,000; credit Prepaid Insurance,$3,000 
B) debit Insurance Expense,$14,000; credit Prepaid Insurance,$14,000 
C) debit Prepaid Insurance,$11,000; credit Insurance Expense,$11,000 
D) debit Insurance Expense,$11,000; credit Prepaid Insurance,$11,000 
A) debit Insurance Expense,$3,000; credit Prepaid Insurance,$3,000 
B) debit Insurance Expense,$14,000; credit Prepaid Insurance,$14,000 
C) debit Prepaid Insurance,$11,000; credit Insurance Expense,$11,000 
D) debit Insurance Expense,$11,000; credit Prepaid Insurance,$11,000

Question 15

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Accepted Answer

A) prepaid 
B) deferred 
C) accrued 
D) matched 
A) prepaid 
B) deferred 
C) accrued 
D) matched

Question 16

The account type and normal balance of Unearned Revenue is

Accepted Answer

A) revenue,credit 
B) expense,debit 
C) liability,credit 
D) asset,debit 
A) revenue,credit 
B) expense,debit 
C) liability,credit 
D) asset,debit

Question 17

The revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Accepted Answer

A) True 
 B)False

Question 18

A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The last payday of December is Friday,December 27.Assume the next pay period begins on Monday,December 30 and the proper adjusting entry is journalized at the end of the fiscal period December 31.Journalize the entry for the payment of the payroll on Friday,January 10.

Accepted Answer

Accrued salaries for December = $20,000/

Question 19

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

Accepted Answer

None

Question 20

A company realizes that the last two days' revenue for the month was billed but not recorded.The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Accepted Answer

A) True 
 B)False

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Revenues and expenses should be recorded in the same period to which they relate.

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as an

The net book value of a fixed asset is determined by the original cost

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

The net income reported on the income statement is $58,000 .However , adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Adjusting journal entries are dated on the last day of the period.

Accrued revenues would appear on the balance sheet as

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Deferred expenses have

Generally accepted accounting principles require that companies use the of accounting.

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

The account type and normal balance of Unearned Revenue is

The revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

A company realizes that the last two days' revenue for the month was billed but not recorded.The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 3: The Adjusting Process

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Revenues and expenses should be recorded in the same period to which they relate.

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as an

The net book value of a fixed asset is determined by the original cost

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

The net income reported on the income statement is $58,000 .However , adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Adjusting journal entries are dated on the last day of the period.

Accrued revenues would appear on the balance sheet as

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Deferred expenses have

Generally accepted accounting principles require that companies use the of accounting.

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

The account type and normal balance of Unearned Revenue is

The revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

A company realizes that the last two days' revenue for the month was billed but not recorded.The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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