Question 1

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Accepted Answer

A) True 
 B)False

Question 2

On January 1,Eastern College received $1,200,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees.The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term.Assuming the college prepares adjustments monthly,what amount of tuition revenue should the college recognize on February 28?

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 3

Profit margin is defined as:

Accepted Answer

A)  Revenues divided by net sales. 
B)  Net sales divided by assets. 
C)  Net income divided by net sales. 
D)  Net income divided by assets. 
E)  Net sales divided by net income. 
A)  Revenues divided by net sales. 
B)  Net sales divided by assets. 
C)  Net income divided by net sales. 
D)  Net income divided by assets. 
E)  Net sales divided by net income.

Question 4

The following information is available for the Higgins Travel Agency.After closing entries are posted,what will be the balance in the Retained earnings account?
$$\begin{array} { l r } 
\text { Net Income } & \$ 42,500 \
\text { Retained earnings } & 130,000 \
\text { Dividends } & 12,000
\end{array}$$

Accepted Answer

A)  $75,500. 
B)  $184,500. 
C)  $99,500. 
D)  $160,500. 
E)  $130,000. 
A)  $75,500. 
B)  $184,500. 
C)  $99,500. 
D)  $160,500. 
E)  $130,000.

Question 5

On December 31,Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

Accepted Answer

A)  Debit Utilities Expense $215; credit Accounts Payable $215. 
B)  Debit Accounts Payable $215; credit Utilities Expense $215. 
C)  Debit Prepaid Utilities $215; credit Cash $215. 
D)  Debit Utilities Expense $215; credit Prepaid Utilities $215. 
E)  Debit Prepaid Utilities $215; credit Accounts Payable $215. 
A)  Debit Utilities Expense $215; credit Accounts Payable $215. 
B)  Debit Accounts Payable $215; credit Utilities Expense $215. 
C)  Debit Prepaid Utilities $215; credit Cash $215. 
D)  Debit Utilities Expense $215; credit Prepaid Utilities $215. 
E)  Debit Prepaid Utilities $215; credit Accounts Payable $215.

Question 6

Classified balance sheets commonly include the following categories:
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity.
Match the typical classification of each item below with its correct balance sheet category (A through G).
-Accounts Payable

Accepted Answer

A) G 
B) B 
C) A 
D) C 
E) F
F)D
G)E 
A) G 
B) B 
C) A 
D) C 
E) F
F)D
G)E

Question 7

For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.$37,000 in dividends were paid during the year.Which of the following entries could not be a closing entry?

Accepted Answer

A)  Debit Income Summary $78,000; credit Retained earnings $78,000. 
B)  Debit Retained earnings $37,000; credit Dividends $37,000. 
C)  Debit revenues $187,000; credit Income Summary $187,000. 
D)  Debit Income Summary $109,000, credit expenses $109,000. 
E)  Debit Income Summary $187,000; credit revenues $187,000. 
A)  Debit Income Summary $78,000; credit Retained earnings $78,000. 
B)  Debit Retained earnings $37,000; credit Dividends $37,000. 
C)  Debit revenues $187,000; credit Income Summary $187,000. 
D)  Debit Income Summary $109,000, credit expenses $109,000. 
E)  Debit Income Summary $187,000; credit revenues $187,000.

Question 8

Profit margin measures the relation of debt to assets.

Accepted Answer

A) True 
 B)False

Question 9

Earned but uncollected revenues are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account.

Accepted Answer

A) True 
 B)False

Question 10

On January 1,Imlay Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000.Imlay uses the straight-line depreciation method to allocate costs,and only prepares adjustments at year-end.The adjusting entry needed on December 31 of the first year 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 11

Net income for a period will be understated if accrued revenues are not recorded at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 12

Adjusting entries are designed primarily to correct accounting errors.

Accepted Answer

A) True 
 B)False

Question 13

During the closing process,Retained Earnings is closed to the Dividends account.

Accepted Answer

A) True 
 B)False

Question 14

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Accepted Answer

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

Question 15

Plant assets are usually listed in order from most liquid to least liquid.

Accepted Answer

A) True 
 B)False

Question 16

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000.What is the correct closing entry for the revenue accounts?

Accepted Answer

A)  Debit Income Summary $55,200; credit Revenue accounts $55,200. 
B)  Debit Revenue accounts $37,000; credit Retained earnings $37,000. 
C)  Debit Revenue accounts $55,200; credit Retained earnings $37,000. 
D)  Debit Revenue accounts $55,200; credit Income Summary $55,200. 
E)  Debit Income Summary $37,000; credit Retained earnings $37,000. 
A)  Debit Income Summary $55,200; credit Revenue accounts $55,200. 
B)  Debit Revenue accounts $37,000; credit Retained earnings $37,000. 
C)  Debit Revenue accounts $55,200; credit Retained earnings $37,000. 
D)  Debit Revenue accounts $55,200; credit Income Summary $55,200. 
E)  Debit Income Summary $37,000; credit Retained earnings $37,000.

Question 17

Which of the following types of businesses might have an operating cycle longer than one year?

Accepted Answer

A)  Ski resort. 
B)  Clothing retailer. 
C)  Florist. 
D)  Wheat farmer. 
E)  Commercial airplane manufacturer. 
A)  Ski resort. 
B)  Clothing retailer. 
C)  Florist. 
D)  Wheat farmer. 
E)  Commercial airplane manufacturer.

Question 18

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

Accepted Answer

An adjusted trial balance is a list of a

Question 19

Which of the following statements is incorrect?

Accepted Answer

A)  Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities. 
B)  Accrued expenses and accrued revenues involve assets and liabilities that had 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 only balance sheet accounts. 
A)  Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities. 
B)  Accrued expenses and accrued revenues involve assets and liabilities that had 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 only balance sheet accounts.

Question 20

A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below.What amount will be posted to Retained earnings in the process of closing the Income Summary account? (Assume all accounts have normal balances.)
$$\begin{array} { l r } 
\text { Retained earnings } &\$ 7,000 \
\text { Dividends } & 9,600 \
\text { Revenus } & 29,000 \
\text { Rent expense } & 3,600 \
\text { Salaries expense } & 7,200 \
\text { Insurance expense } & 920 \
\text { Depr. Experise-equipment } & 500 \
\text { Accum depr.-equiprnent } & 1,500
\end{array}$$

Accepted Answer

A)  $16,780 debit. 
B)  $7,180 credit. 
C)  $16,780 credit. 
D)  $18,280 credit. 
E)  $23,780 credit. 
A)  $16,780 debit. 
B)  $7,180 credit. 
C)  $16,780 credit. 
D)  $18,280 credit. 
E)  $23,780 credit.

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Profit margin is defined as:

The following information is available for the Higgins Travel Agency.After closing entries are posted,what will be the balance in the Retained earnings account? Net Income \ 42,500 Retained earnings 130,000 Dividends 12,000

On December 31,Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.$37,000 in dividends were paid during the year.Which of the following entries could not be a closing entry?

Profit margin measures the relation of debt to assets.

Earned but uncollected revenues are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account.

Net income for a period will be understated if accrued revenues are not recorded at the end of the accounting period.

Adjusting entries are designed primarily to correct accounting errors.

During the closing process,Retained Earnings is closed to the Dividends account.

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Plant assets are usually listed in order from most liquid to least liquid.

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000.What is the correct closing entry for the revenue accounts?

Which of the following types of businesses might have an operating cycle longer than one year?

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

Which of the following statements is incorrect?

Accounting in Business

Analyzing for Business Transactions

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 3: Adjusting Accounts for Financial Statements

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Profit margin is defined as:

The following information is available for the Higgins Travel Agency.After closing entries are posted,what will be the balance in the Retained earnings account? Net Income \ 42,500 Retained earnings 130,000 Dividends 12,000

On December 31,Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.$37,000 in dividends were paid during the year.Which of the following entries could not be a closing entry?

Profit margin measures the relation of debt to assets.

Earned but uncollected revenues are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account.

Net income for a period will be understated if accrued revenues are not recorded at the end of the accounting period.

Adjusting entries are designed primarily to correct accounting errors.

During the closing process,Retained Earnings is closed to the Dividends account.

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Plant assets are usually listed in order from most liquid to least liquid.

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000.What is the correct closing entry for the revenue accounts?

Which of the following types of businesses might have an operating cycle longer than one year?

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

Which of the following statements is incorrect?

Accounting in Business

Analyzing for Business Transactions

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters