Question 1

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

Accepted Answer

A) True 
 B)False

Question 2

At the beginning of the year,Sigma Company's balance sheet reported Total Assets of $195,000; Total Liabilities of $15,000; and Total Paid-in capital of $60,000.During the year,the company reported total revenues of $226,000 and expenses of $175,000.Also,dividends during the year totaled $48,000.Assuming no other changes to Retained earnings,the balance in the Retained earnings account at the end of the year would be:

Accepted Answer

A)  $174,000. 
B)  $78,000. 
C)  $171,000. 
D)  $120,000. 
E)  $123,000. 
A)  $174,000. 
B)  $78,000. 
C)  $171,000. 
D)  $120,000. 
E)  $123,000.

Question 3

For the year ended December 31,a company has revenues of $317,000 and expenses of $196,000.The company paid $50,000 in dividends during the year.The balance in the Retained earnings account before closing is $81,000.Which of the following entries would be used to close the dividends account?

Accepted Answer

A)  Debit Income Summary $50,000; credit Retained earnings $50,000. 
B)  Debit Retained earnings $50,000; credit Dividends $50,000. 
C)  Debit Retained earnings $81,000; credit Income Summary $81,000. 
D)  Debit Income Summary $81,000, credit Dividends $81,000. 
E)  Debit Dividends $50,000; credit Retained earnings $50,000. 
A)  Debit Income Summary $50,000; credit Retained earnings $50,000. 
B)  Debit Retained earnings $50,000; credit Dividends $50,000. 
C)  Debit Retained earnings $81,000; credit Income Summary $81,000. 
D)  Debit Income Summary $81,000, credit Dividends $81,000. 
E)  Debit Dividends $50,000; credit Retained earnings $50,000.

Question 4

Financial statements can be prepared directly from the information in the adjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 5

All plant assets,including land,are depreciated.

Accepted Answer

A) True 
 B)False

Question 6

The expense recognition (matching)principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses,not when cash is paid.

Accepted Answer

A) True 
 B)False

Question 7

Palmer Company is at the end of its annual accounting period.The accountant has journalized and posted all external transactions and all adjusting entries,has prepared an adjusted trial balance,and completed the financial statements.The next step in the accounting cycle is:

Accepted Answer

A)  Prepare a work sheet. 
B)  Prepare reversing entries. 
C)  Close temporary accounts. 
D)  Prepare a post-closing trial balance. 
E)  Prepare an unadjusted trial balance. 
A)  Prepare a work sheet. 
B)  Prepare reversing entries. 
C)  Close temporary accounts. 
D)  Prepare a post-closing trial balance. 
E)  Prepare an unadjusted trial balance.

Question 8

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

Accepted Answer

A)  Operating cycle of a business. 
B)  Time period assumption. 
C)  Going-concern assumption. 
D)  Expense recognition (matching) principle. 
E)  Accrual basis of accounting. 
A)  Operating cycle of a business. 
B)  Time period assumption. 
C)  Going-concern assumption. 
D)  Expense recognition (matching) principle. 
E)  Accrual basis of accounting.

Question 9

a)Prepare a classified balance sheet for Martin Air Freight based on the adjusted trial balance shown below.b)Prepare the required closing entries.
   
* $2,000 of the long-term note payable is due during the next year.

Accepted Answer

@#IMG-DLM& \[\begin{array} { |l| r | r | } 
\hline

Question 10

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Accepted Answer

A) True 
 B)False

Question 11

Profit margin = ________ divided by net sales.

Accepted Answer

The answer of Profit margin = ________ divided by net...

Question 12

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31.This oversight would:

Accepted Answer

A)  Understate net income by $28,000. 
B)  Overstate net income by $28,000. 
C)  Have no effect on net income. 
D)  Overstate assets by $28,000. 
E)  Understate assets by $28,000. 
A)  Understate net income by $28,000. 
B)  Overstate net income by $28,000. 
C)  Have no effect on net income. 
D)  Overstate assets by $28,000. 
E)  Understate assets by $28,000.

Question 13

Reversing entries:

Accepted Answer

A)  Are optional. 
B)  Are mandatory. 
C)  Correct errors in journal entries. 
D)  Are required by GAAP. 
E)  Are prepared on the worksheet. 
A)  Are optional. 
B)  Are mandatory. 
C)  Correct errors in journal entries. 
D)  Are required by GAAP. 
E)  Are prepared on the worksheet.

Question 14

From the information provided,calculate Giuseppe's profit margin ratio for each of the three years.Comment on the results,assuming that the industry average for the profit margin ratio is 6% for each of the three years.
 $\begin{array}{llll}
&2017&2016&2015\
\text { Net income } & \$ 2,630 & \$ 2,100 & \$ 1,850 \
\text { Net Sales } & 36,500 & 32,850 & 31,200 \
\text { Total Assets } & 400,000 & 385,000 & 350,000
\end{array}$

Accepted Answer

@#IMG-DLM& Analysis comment: The profit margin has

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Discuss how accrual accounting enhances the usefulness of financial statements.

Accepted Answer

The accrual accounting method recognizes

Question 17

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 18

Adjusting entries:

Accepted Answer

A)  Affect only income statement accounts. 
B)  Affect only balance sheet accounts. 
C)  Affect both income statement and balance sheet accounts. 
D)  Affect cash accounts. 
E)  Affect only equity accounts. 
A)  Affect only income statement accounts. 
B)  Affect only balance sheet accounts. 
C)  Affect both income statement and balance sheet accounts. 
D)  Affect cash accounts. 
E)  Affect only equity accounts.

Question 19

Explain how the owner of a company uses the accrual basis of accounting.

Accepted Answer

The owner recognizes that financial info

Question 20

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

Accepted Answer

A) True 
 B)False

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

For the year ended December 31,a company has revenues of $317,000 and expenses of $196,000.The company paid $50,000 in dividends during the year.The balance in the Retained earnings account before closing is $81,000.Which of the following entries would be used to close the dividends account?

Financial statements can be prepared directly from the information in the adjusted trial balance.

All plant assets,including land,are depreciated.

The expense recognition (matching)principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses,not when cash is paid.

Palmer Company is at the end of its annual accounting period.The accountant has journalized and posted all external transactions and all adjusting entries,has prepared an adjusted trial balance,and completed the financial statements.The next step in the accounting cycle is:

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

a)Prepare a classified balance sheet for Martin Air Freight based on the adjusted trial balance shown below.b)Prepare the required closing entries. * $2,000 of the long-term note payable is due during the next year.

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Profit margin = ________ divided by net sales.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31.This oversight would:

Reversing entries:

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

Discuss how accrual accounting enhances the usefulness of financial statements.

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?

Adjusting entries:

Explain how the owner of a company uses the accrual basis of accounting.

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

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

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

For the year ended December 31,a company has revenues of $317,000 and expenses of $196,000.The company paid $50,000 in dividends during the year.The balance in the Retained earnings account before closing is $81,000.Which of the following entries would be used to close the dividends account?

Financial statements can be prepared directly from the information in the adjusted trial balance.

All plant assets,including land,are depreciated.

The expense recognition (matching)principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses,not when cash is paid.

Palmer Company is at the end of its annual accounting period.The accountant has journalized and posted all external transactions and all adjusting entries,has prepared an adjusted trial balance,and completed the financial statements.The next step in the accounting cycle is:

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters,or years is the:

a)Prepare a classified balance sheet for Martin Air Freight based on the adjusted trial balance shown below.b)Prepare the required closing entries. * $2,000 of the long-term note payable is due during the next year.

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Profit margin = ________ divided by net sales.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31.This oversight would:

Reversing entries:

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

Discuss how accrual accounting enhances the usefulness of financial statements.

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?

Adjusting entries:

Explain how the owner of a company uses the accrual basis of accounting.

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

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