Question 1

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Accepted Answer

A) True 
 B)False

Question 2

Match the following terms with the appropriate definition.
-The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.

Accepted Answer

A) Accrued revenues 
B) Expense recognition (matching) principle 
C) Cash basis accounting 
D) Depreciation 
E) Accrual basis accounting
F)Interim financial statements
G)Straight-line depreciation
H)Time period assumption
I)Fiscal year 
A) Accrued revenues 
B) Expense recognition (matching) principle 
C) Cash basis accounting 
D) Depreciation 
E) Accrual basis accounting
F)Interim financial statements
G)Straight-line depreciation
H)Time period assumption
I)Fiscal year

Question 3

Tiptoe Shoes,had annual revenues of $185,000,expenses of $103,700,and paid dividends of $18,000 during the current year.The retained earnings account before closing had a balance of $297,000.The Net Income for the year is:

Accepted Answer

A)  $185,000 
B)  $63,300 
C)  $81,300 
D)  $360,300 
E)  $378,300 
A)  $185,000 
B)  $63,300 
C)  $81,300 
D)  $360,300 
E)  $378,300

Question 4

The calendar year-end adjusted trial balance for Blessinger Co.follows:   
Required:
(a)Determine the amounts of current assets and current liabilities.(Note: A $9,000 installment on the long-term note payable is due within one year.)
(b)Calculate the current ratio.Comment on the ability of Blessinger Co.to meets its short-term debts.

Accepted Answer

(a)Current assets = Cash + Accounts Rece

Question 5

Failure to record depreciation expense will overstate assets and understate expenses.

Accepted Answer

A) True 
 B)False

Question 6

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following:
Office supplies used during the period,$1,200.
Expiration of prepaid rent,$700.
Accrued salaries expense,$500.
Depreciation expense,$800.
Accrued service fees receivable,$400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A)  $80,400. 
B)  $84,000. 
C)  $85,700. 
D)  $85,900. 
E)  $87,600. 
A)  $80,400. 
B)  $84,000. 
C)  $85,700. 
D)  $85,900. 
E)  $87,600.

Question 7

Long-term investments can include land held for future expansion.

Accepted Answer

A) True 
 B)False

Question 8

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Accepted Answer

A)  Balance Sheet and Statement of Retained Earnings-Credit and Income Statement-Credit. 
B)  Balance Sheet and Statement of Retained Earnings-Debit and Income Statement-Debit. 
C)  Income Statement-Debit and Income Statement-Credit. 
D)  Balance Sheet and Statement of Retained Earnings-Debit and Balance Sheet and Statement of Retained Earnings-Credit. 
E)  Balance Sheet and Statement of Retained Earnings-Debit; and Income Statement-Credit. 
A)  Balance Sheet and Statement of Retained Earnings-Credit and Income Statement-Credit. 
B)  Balance Sheet and Statement of Retained Earnings-Debit and Income Statement-Debit. 
C)  Income Statement-Debit and Income Statement-Credit. 
D)  Balance Sheet and Statement of Retained Earnings-Debit and Balance Sheet and Statement of Retained Earnings-Credit. 
E)  Balance Sheet and Statement of Retained Earnings-Debit; and Income Statement-Credit.

Question 9

Which of the following errors would cause the Balance Sheet and Statement of Retained Earnings columns of a work sheet to be out of balance?

Accepted Answer

A)  Entering an asset amount in the Income Statement Debit column. 
B)  Entering a liability amount in the Income Statement Credit column. 
C)  Entering an expense amount in the Balance Sheet and Statement of Retained Earnings Debit column. 
D)  Entering a revenue amount in the Balance Sheet and Statement of Retained Earnings Debit column. 
E)  Entering a liability amount in the Balance Sheet and Statement of Retained Earnings Credit column. 
A)  Entering an asset amount in the Income Statement Debit column. 
B)  Entering a liability amount in the Income Statement Credit column. 
C)  Entering an expense amount in the Balance Sheet and Statement of Retained Earnings Debit column. 
D)  Entering a revenue amount in the Balance Sheet and Statement of Retained Earnings Debit column. 
E)  Entering a liability amount in the Balance Sheet and Statement of Retained Earnings Credit column.

Question 10

Under the alternative method for recording prepaid expenses,which is the correct set of journal entries?

Accepted Answer

A)  $$\begin{array} { | l | l | } 
\hline{ \text { Initial Entry } } &  { \text { Adjusting Entry } } \
\hline \text { Insurance Expense } & \text { Prepaid Insurance } \
\hline \text { Cash } & \text { Insurance Expense } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } &{ \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Prepaid Insurance } \
\hline \text { Insurance Expense } & \text { Insurance Expense } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Prepaid Insurance } & \text { Prepaid Insurance } \
\hline \text { Cash } & \text { Insurance Expense } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Prepaid Insurance } & \text { Insurance Expense } \
\hline \text { Cash } & \text { Prepaid Insurance } \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Prepaid Insurance } & \text { Cash } \
\hline \text { Insurance Expense } & \text { Prepaid Insurance } \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | l | } 
\hline{ \text { Initial Entry } } &  { \text { Adjusting Entry } } \
\hline \text { Insurance Expense } & \text { Prepaid Insurance } \
\hline \text { Cash } & \text { Insurance Expense } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } &{ \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Prepaid Insurance } \
\hline \text { Insurance Expense } & \text { Insurance Expense } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Prepaid Insurance } & \text { Prepaid Insurance } \
\hline \text { Cash } & \text { Insurance Expense } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Prepaid Insurance } & \text { Insurance Expense } \
\hline \text { Cash } & \text { Prepaid Insurance } \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Prepaid Insurance } & \text { Cash } \
\hline \text { Insurance Expense } & \text { Prepaid Insurance } \
\hline
\end{array}$$

Question 11

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Accepted Answer

A)  Office Equipment. 
B)  Accumulated Depreciation-Office Equipment. 
C)  Depreciation Expense-Office Equipment. 
D)  Retained earnings. 
E)  Salaries Payable. 
A)  Office Equipment. 
B)  Accumulated Depreciation-Office Equipment. 
C)  Depreciation Expense-Office Equipment. 
D)  Retained earnings. 
E)  Salaries Payable.

Question 12

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).
-Investment maturing in two years

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 13

Show the December 31 adjusting entry to record $750 of earned but unpaid salaries of employees at the end of the current accounting period.

Accepted Answer

\[\begin{array} { c c c } 
\te

Question 14

On April 1,a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date.What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

Accepted Answer

A)  $1,350.00. 
B)  $450.00. 
C)  $1,012.50. 
D)  $337.50. 
E)  $37.50. 
A)  $1,350.00. 
B)  $450.00. 
C)  $1,012.50. 
D)  $337.50. 
E)  $37.50.

Question 15

Explain why temporary accounts are closed each period.

Accepted Answer

Temporary accounts accumulate data relat

Question 16

On November 1 of the current year,Salinger Company paid $9,600 cash for a one-year insurance policy that took effect on that day.On the date of the payment,Salinger recorded the following entry:
 $\begin{array}{llr}
  \text { Nov. 01 } & \text {   Insurance Expense} &9,600\
 &\text {Cash  } &&9,600\
\end{array}$
  
Assuming Salinger only prepares adjustments at year-end,prepare the required adjusting entry at December 31 of the current year.

Accepted Answer

($9,600/12 mo.= $800

Question 17

Income Summary is a temporary account only used for the closing process.

Accepted Answer

A) True 
 B)False

Question 18

The calendar year-end adjusted trial balance for Blessinger Co.follows:   
Required:
(a)Prepare a classified year-end balance sheet.(Note: A $9,000 installment on the long-term note payable is due within one year.)
(b)Prepare the required closing entries.

Accepted Answer

@#IMG-DLM& *NI = $430,800 - $90,000 - $5,200 - $5,

Question 19

Revenue and expense accounts are permanent (real)accounts and should not be closed at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 20

Identify the types of adjusting entries and explain the purpose of each type.

Accepted Answer

Adjusting entries can be grouped into tw

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Match the following terms with the appropriate definition. -The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.

Tiptoe Shoes,had annual revenues of $185,000,expenses of $103,700,and paid dividends of $18,000 during the current year.The retained earnings account before closing had a balance of $297,000.The Net Income for the year is:

Failure to record depreciation expense will overstate assets and understate expenses.

Long-term investments can include land held for future expansion.

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Which of the following errors would cause the Balance Sheet and Statement of Retained Earnings columns of a work sheet to be out of balance?

Under the alternative method for recording prepaid expenses,which is the correct set of journal entries?

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Show the December 31 adjusting entry to record $750 of earned but unpaid salaries of employees at the end of the current accounting period.

On April 1,a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date.What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

Explain why temporary accounts are closed each period.

Income Summary is a temporary account only used for the closing process.

The calendar year-end adjusted trial balance for Blessinger Co.follows: Required: (a)Prepare a classified year-end balance sheet.(Note: A $9,000 installment on the long-term note payable is due within one year.) (b)Prepare the required closing entries.

Revenue and expense accounts are permanent (real)accounts and should not be closed at the end of the accounting period.

Identify the types of adjusting entries and explain the purpose of each type.

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

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Match the following terms with the appropriate definition. -The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.

Tiptoe Shoes,had annual revenues of $185,000,expenses of $103,700,and paid dividends of $18,000 during the current year.The retained earnings account before closing had a balance of $297,000.The Net Income for the year is:

Failure to record depreciation expense will overstate assets and understate expenses.

Long-term investments can include land held for future expansion.

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Which of the following errors would cause the Balance Sheet and Statement of Retained Earnings columns of a work sheet to be out of balance?

Under the alternative method for recording prepaid expenses,which is the correct set of journal entries?

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Show the December 31 adjusting entry to record $750 of earned but unpaid salaries of employees at the end of the current accounting period.

On April 1,a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date.What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

Explain why temporary accounts are closed each period.

Income Summary is a temporary account only used for the closing process.

The calendar year-end adjusted trial balance for Blessinger Co.follows: Required: (a)Prepare a classified year-end balance sheet.(Note: A $9,000 installment on the long-term note payable is due within one year.) (b)Prepare the required closing entries.

Revenue and expense accounts are permanent (real)accounts and should not be closed at the end of the accounting period.

Identify the types of adjusting entries and explain the purpose of each type.

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