Question 1

Describe the types of entries required in later periods that result from accruals.

Accepted Answer

Accrued revenues in one period result in

Question 2

On the work sheet,net income is entered in the Income Statement Credit column as well as the Balance Sheet Debit column.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements regarding financial statement preparation is false?

Accepted Answer

A) Financial statements can be prepared from information in the adjusted trial balance. 
B) The Sarbanes-Oxley Act requires that financial statements filed with the Securities and Exchange Commission include declarations by the CEO and CFO of the company. 
C) It makes sense to prepare the balance sheet first because it contains information needed on the income statement. 
D) When preparing financial statements an adjusted trial balance is easier to work with than the entire ledger. 
E) The income statement is prepared first. 
A) Financial statements can be prepared from information in the adjusted trial balance. 
B) The Sarbanes-Oxley Act requires that financial statements filed with the Securities and Exchange Commission include declarations by the CEO and CFO of the company. 
C) It makes sense to prepare the balance sheet first because it contains information needed on the income statement. 
D) When preparing financial statements an adjusted trial balance is easier to work with than the entire ledger. 
E) The income statement is prepared first.

Question 4

The 12-month period that ends when a company's activities are at their lowest point is called the:

Accepted Answer

A) Fiscal year 
B) Calendar year 
C) Natural business year 
D) Accounting period 
E) Interim period 
A) Fiscal year 
B) Calendar year 
C) Natural business year 
D) Accounting period 
E) Interim period

Question 5

An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):

Accepted Answer

A) Accrued expense 
B) Contra account 
C) Accrued revenue 
D) Intangible asset 
E) Adjunct account 
A) Accrued expense 
B) Contra account 
C) Accrued revenue 
D) Intangible asset 
E) Adjunct account

Question 6

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

Accepted Answer

The answer of A _____________ account is an account linked...

Question 7

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Accepted Answer

A) 2% 
B) 20% 
C) 200% 
D) 500% 
E) $8,000 
A) 2% 
B) 20% 
C) 200% 
D) 500% 
E) $8,000

Question 8

Intangible assets are long-term resources that benefit business operations,usually lack physical form,and have uncertain benefits.

Accepted Answer

A) True 
 B)False

Question 9

The recurring steps performed each accounting period,starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance,are referred to as the:

Accepted Answer

A) Accounting period 
B) Operating cycle 
C) Accounting cycle 
D) Closing cycle 
E) Natural business year 
A) Accounting period 
B) Operating cycle 
C) Accounting cycle 
D) Closing cycle 
E) Natural business year

Question 10

The asset section of a classified balance sheet usually includes:

Accepted Answer

A) Current assets,investments,plant assets,and intangible assets. 
B) Current assets,long-term assets,revenues,and intangible assets. 
C) Current assets,investments,plant assets,and equity. 
D) Current liabilities,investments,plant assets,and intangible assets. 
E) Current assets,liabilities,plant assets,and intangible assets. 
A) Current assets,investments,plant assets,and intangible assets. 
B) Current assets,long-term assets,revenues,and intangible assets. 
C) Current assets,investments,plant assets,and equity. 
D) Current liabilities,investments,plant assets,and intangible assets. 
E) Current assets,liabilities,plant assets,and intangible assets.

Question 11

Which of the following statements is incorrect?

Accepted Answer

A) Prepaid expenses,depreciation,and unearned revenues involve previously recorded assets and liabilities. 
B) Accrued expenses and accrued revenues involve assets and liabilities that were not previously been recorded. 
C) Adjusting entries can be used to record both accrued expenses and accrued revenues. 
D) Prepaid expenses,depreciation,and unearned revenues often require adjusting entries to record the effects of the passage of time. 
E) Adjusting entries affect the cash account. 
A) Prepaid expenses,depreciation,and unearned revenues involve previously recorded assets and liabilities. 
B) Accrued expenses and accrued revenues involve assets and liabilities that were not previously been recorded. 
C) Adjusting entries can be used to record both accrued expenses and accrued revenues. 
D) Prepaid expenses,depreciation,and unearned revenues often require adjusting entries to record the effects of the passage of time. 
E) Adjusting entries affect the cash account.

Question 12

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the period?

Accepted Answer

A) $2,700 
B) $2,900 
C) $3,300 
D) $3,500 
E) $3,700 
A) $2,700 
B) $2,900 
C) $3,300 
D) $3,500 
E) $3,700

Question 13

______________________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid.______________________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Accepted Answer

The answer of ______________________ basis accounting means that revenues are...

Question 14

Awn Services paid a dividend of $8,700 during the current year.The entry to close the dividend account at the end of the year is:

Accepted Answer

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

Question 15

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.

Question 16

An adjusting entry was made on December 31,2014 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2015 in the amount of $3,000?

Accepted Answer

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

Question 17

On December 31,the balance in the Prepaid Advertising account was $176,000,which is the remaining balance of a 12-month advertising campaign purchased on August 31 in the current year.Assuming the cost is spread equally over each month,how much did this advertising campaign cost in total?

Accepted Answer

A) $286,000 
B) $176,000 
C) $264,000 
D) $154,000 
E) $22,000 
A) $286,000 
B) $176,000 
C) $264,000 
D) $154,000 
E) $22,000

Question 18

A $1,200,000 note payable requires 10% annual interest with interest due monthly on the 15th of each month.An interest payment of $10,000 was made on April 15th and $5,000 of interest expense was accrued in an adjusting entry on April 30th.The company makes the next interest payment due on May 15.How would the company record this transaction?

Accepted Answer

A) Debit Interest Expense for $5,000 and credit Cash for $5,000. 
B) Debit Interest Expense for $10,000 and credit Cash for $5,000. 
C) Debit Interest Payable for $10,000 and credit Cash for $10,000. 
D) Debit Interest Expense for $5,000,debit Interest Payable for $5,000,and credit cash for $10,000. 
E) Debit Interest Payable for $15,000,credit Cash for $10,000,and credit Interest Expense for $5,000. 
A) Debit Interest Expense for $5,000 and credit Cash for $5,000. 
B) Debit Interest Expense for $10,000 and credit Cash for $5,000. 
C) Debit Interest Payable for $10,000 and credit Cash for $10,000. 
D) Debit Interest Expense for $5,000,debit Interest Payable for $5,000,and credit cash for $10,000. 
E) Debit Interest Payable for $15,000,credit Cash for $10,000,and credit Interest Expense for $5,000.

Question 19

Which of the following accounts would not be impacted by adjusting journal entries?

Accepted Answer

A) Accounts Receivable 
B) Consulting Fee Earned 
C) Unearned Consulting Fees 
D) Cash 
E) Wages Payable 
A) Accounts Receivable 
B) Consulting Fee Earned 
C) Unearned Consulting Fees 
D) Cash 
E) Wages Payable

Question 20

On May 1,2014,Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30,2015.The cash receipt was recorded as unearned fees.At December 31,2014,$500 of the fees had been earned.The adjusting entry on December 31,2014,should include a:

Accepted Answer

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

Describe the types of entries required in later periods that result from accruals.

On the work sheet,net income is entered in the Income Statement Credit column as well as the Balance Sheet Debit column.

Which of the following statements regarding financial statement preparation is false?

The 12-month period that ends when a company's activities are at their lowest point is called the:

An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Intangible assets are long-term resources that benefit business operations,usually lack physical form,and have uncertain benefits.

The recurring steps performed each accounting period,starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance,are referred to as the:

The asset section of a classified balance sheet usually includes:

Which of the following statements is incorrect?

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the period?

basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Awn Services paid a dividend of $8,700 during the current year.The entry to close the dividend account at the end of the year is:

The adjusted trial balance contains information pertaining to:

An adjusting entry was made on December 31,2014 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2015 in the amount of $3,000?

On December 31,the balance in the Prepaid Advertising account was $176,000,which is the remaining balance of a 12-month advertising campaign purchased on August 31 in the current year.Assuming the cost is spread equally over each month,how much did this advertising campaign cost in total?

Which of the following accounts would not be impacted by adjusting journal entries?

On May 1,2014,Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30,2015.The cash receipt was recorded as unearned fees.At December 31,2014,$500 of the fees had been earned.The adjusting entry on December 31,2014,should include a:

Introducing Financial Accounting

Accounting System and Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 3: Adjusting Accounts for Financial Statements

Describe the types of entries required in later periods that result from accruals.

On the work sheet,net income is entered in the Income Statement Credit column as well as the Balance Sheet Debit column.

Which of the following statements regarding financial statement preparation is false?

The 12-month period that ends when a company's activities are at their lowest point is called the:

An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Intangible assets are long-term resources that benefit business operations,usually lack physical form,and have uncertain benefits.

The recurring steps performed each accounting period,starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance,are referred to as the:

The asset section of a classified balance sheet usually includes:

Which of the following statements is incorrect?

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the period?

______________________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid.______________________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Awn Services paid a dividend of $8,700 during the current year.The entry to close the dividend account at the end of the year is:

The adjusted trial balance contains information pertaining to:

An adjusting entry was made on December 31,2014 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2015 in the amount of $3,000?

On December 31,the balance in the Prepaid Advertising account was $176,000,which is the remaining balance of a 12-month advertising campaign purchased on August 31 in the current year.Assuming the cost is spread equally over each month,how much did this advertising campaign cost in total?

Which of the following accounts would not be impacted by adjusting journal entries?

On May 1,2014,Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30,2015.The cash receipt was recorded as unearned fees.At December 31,2014,$500 of the fees had been earned.The adjusting entry on December 31,2014,should include a:

Introducing Financial Accounting

Accounting System and Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.