Question 1

The advance cash receipts of future revenues are called ________.

Accepted Answer

A) accrued revenues 
B) deferred expenses 
C) deferred revenues 
D) accrued expenses 
A) accrued revenues 
B) deferred expenses 
C) deferred revenues 
D) accrued expenses

Question 2

Laramie,Inc.signed a contract with a service provider for security services at a rate of $260 per month for the period of January through June.Laramie,Inc.will pay the service provider the entire amount at the end of June.The company makes adjusting entries each month.During the month of June,it should record total security expense of $520.

Accepted Answer

A) True 
 B)False

Question 3

Under accrual basis accounting,an expense is recorded only when cash is paid.

Accepted Answer

A) True 
 B)False

Question 4

The adjusted trial balance shows ________.

Accepted Answer

A) account balances after adjustments 
B) revenue and expense accounts only 
C) account balances before adjustments 
D) balance sheet accounts only 
A) account balances after adjustments 
B) revenue and expense accounts only 
C) account balances before adjustments 
D) balance sheet accounts only

Question 5

Accrued revenue is revenue that ________.

Accepted Answer

A) has been collected and earned 
B) the business has collected in cash,but not yet earned 
C) the business has earned,but not yet collected in cash 
D) will be collected and earned in the future 
A) has been collected and earned 
B) the business has collected in cash,but not yet earned 
C) the business has earned,but not yet collected in cash 
D) will be collected and earned in the future

Question 6

Which of the following accounts would be used under the accrual basis of accounting,but not under cash basis accounting?

Accepted Answer

A) Cash 
B) Unearned Revenue 
C) Service Revenue 
D) Salaries Expense 
A) Cash 
B) Unearned Revenue 
C) Service Revenue 
D) Salaries Expense

Question 7

The Family Dental Corporation prepays the rent on its dental office.On July 1,the corporation paid $18,000 for 6 months of rent.How much Rent Expense should Family Dental Corporation record the three months ended September 30 under the cash basis? Why?

Accepted Answer

Family Dental should report Re

Question 8

On January 1,2015,the Accounts Receivable of Linda,Inc.had a debit balance of $180,000.During January,the company provided services for $700,000 on account.The company collected $230,000 from its customers on account in January.What was the ending balance in the Accounts Receivable account at the end of January?

Accepted Answer

A) $470,000 
B) $880,000 
C) $650,000 
D) $700,000 
A) $470,000 
B) $880,000 
C) $650,000 
D) $700,000

Question 9

Unearned revenue is recorded when ________.

Accepted Answer

A) revenue will be both collected and earned in the future 
B) the business has collected cash,but not yet earned the revenue 
C) revenue has been collected and earned during the same accounting period 
D) the business has earned,but not collected,cash for the revenue 
A) revenue will be both collected and earned in the future 
B) the business has collected cash,but not yet earned the revenue 
C) revenue has been collected and earned during the same accounting period 
D) the business has earned,but not collected,cash for the revenue

Question 10

What is the effect of the adjusting entry for Depreciation Expense?

Accepted Answer

A) It increases total liabilities and increases total expenses. 
B) It increases total assets and increases total expenses. 
C) It decreases total assets and increases total expenses. 
D) It decreases total liabilities and increases total expenses. 
A) It increases total liabilities and increases total expenses. 
B) It increases total assets and increases total expenses. 
C) It decreases total assets and increases total expenses. 
D) It decreases total liabilities and increases total expenses.

Question 11

The time period concept states that ________.

Accepted Answer

A) financial statements can be prepared for specific periods 
B) all expenses should be recorded when they are incurred during the period 
C) companies should record revenue when it has been earned 
D) expenses incurred during a period should be matched against the revenues of the period 
A) financial statements can be prepared for specific periods 
B) all expenses should be recorded when they are incurred during the period 
C) companies should record revenue when it has been earned 
D) expenses incurred during a period should be matched against the revenues of the period

Question 12

At the end of the current year,the accountant for Colorful Graphics,Inc.forgot to make an adjusting entry to accrue Wages Payable to the company's employees for the last week in December.The wages will be paid to the employees in January.Which of the following is an effect of this error?

Accepted Answer

A) Net income is overstated. 
B) Liabilities are overstated. 
C) Net income is understated. 
D) Expenses are overstated. 
A) Net income is overstated. 
B) Liabilities are overstated. 
C) Net income is understated. 
D) Expenses are overstated.

Question 13

What type of account is Prepaid Rent,and what is its normal balance?

Accepted Answer

A) It is an expense account and has a debit balance. 
B) It is a liability account and has a credit balance. 
C) It is a revenue account and has a credit balance. 
D) It is an asset account and has a debit balance. 
A) It is an expense account and has a debit balance. 
B) It is a liability account and has a credit balance. 
C) It is a revenue account and has a credit balance. 
D) It is an asset account and has a debit balance.

Question 14

Bryson Services,Inc.performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received a check by mail on January 5.Which of the following accounts should appear on the balance sheet as of December 31 as related to the services performed?

Accepted Answer

A) Prepaid Expense 
B) Accounts Receivable 
C) Unearned Revenue 
D) None,there is no entry in December. 
A) Prepaid Expense 
B) Accounts Receivable 
C) Unearned Revenue 
D) None,there is no entry in December.

Question 15

Which of the following is considered a fiscal year?

Accepted Answer

A) six months 
B) three months 
C) twelve months 
D) four months 
A) six months 
B) three months 
C) twelve months 
D) four months

Question 16

Bryan Consultants had the following balances before preparing adjusting entries in the books on December 31,2017.
 $$\begin{array} { l l l } 
\text { Cash } & \$ 6,000 & \text { Dividends }7\$ \
\text { Accounts Receivable } & 2,000 \text { Service Revenue } & 10,600 \
\text { Office Supplies } & 1,800 \text { Salaries Expense } & 4,000 \
\text { Equipment } & 15,000 & \text { Rent Expense }&8
\end{array}$$ $$\begin{array} { l l l } 
\text { Accumulated Depreciation - } & 9,000 \text { Depreciation Expense- } & \text { 1,500 } \
\text { Equipment } & { \text { Equipment } } & \
\text { Common Stock } & 15,000 & \text {Supplies } \
\text { Expense } & 500 &
\end{array}$$ Prepare the adjusted trial balance after considering these adjustments:
a.Office Supplies used,$800.Assume the office supplies were initially recorded as an asset.
b.Accrued salaries on December 31,$600.
c.Revenue earned but not recorded,$200.

Accepted Answer

None

Question 17

The following extract was taken from the worksheet of Kelly Bakers for the year 2016. Kelly takers
Worksheet
December 31, 2016   For the above information,determine the amount of Depreciation Expense for the equipment used in the business.

Accepted Answer

A) $9,200 
B) $2,300 
C) $6,800 
D) $1,000 
A) $9,200 
B) $2,300 
C) $6,800 
D) $1,000

Question 18

The following Office Supplies account information is available for Able,Inc. $$\begin{array} { | l | r | } 
\hline \text { Beginning balance } & \$ 1,800 \
\hline \text { Office Supplies expensed } & 5,000 \
\hline \text { Ending balance } & 2,000 \
\hline
\end{array}$$ From the above information,calculate the amount of office supplies purchased.

Accepted Answer

A) $5,200 
B) $5,000 
C) $1,800 
D) $2,000 
A) $5,200 
B) $5,000 
C) $1,800 
D) $2,000

Question 19

Revenue is earned when the business has ________.

Accepted Answer

A) entered into an agreement with the customer about the goods or services to be delivered 
B) prepared a journal entry to record revenue 
C) received cash from the customer before goods or services are delivered 
D) delivered a good or service to the customer 
A) entered into an agreement with the customer about the goods or services to be delivered 
B) prepared a journal entry to record revenue 
C) received cash from the customer before goods or services are delivered 
D) delivered a good or service to the customer

Question 20

On April 1,Balsa,Inc.purchased office supplies for $1,500.At the end of April,they took a count of the remaining supplies and found that there was $500 of supplies left.Provide the adjusting entry needed at the end of April.(Ignore explanation).Assume the office supplies were initially recorded as an asset.Assume there were no office supplies on hand prior to the purchase on April 1.

Accepted Answer

@#IMG-DLM&
Ratinal:
Supplies Expense = B

Exam 3: The Adjusting Process

The advance cash receipts of future revenues are called ________.

Under accrual basis accounting,an expense is recorded only when cash is paid.

The adjusted trial balance shows ________.

Accrued revenue is revenue that ________.

Which of the following accounts would be used under the accrual basis of accounting,but not under cash basis accounting?

The Family Dental Corporation prepays the rent on its dental office.On July 1,the corporation paid $18,000 for 6 months of rent.How much Rent Expense should Family Dental Corporation record the three months ended September 30 under the cash basis? Why?

Unearned revenue is recorded when ________.

What is the effect of the adjusting entry for Depreciation Expense?

The time period concept states that ________.

At the end of the current year,the accountant for Colorful Graphics,Inc.forgot to make an adjusting entry to accrue Wages Payable to the company's employees for the last week in December.The wages will be paid to the employees in January.Which of the following is an effect of this error?

What type of account is Prepaid Rent,and what is its normal balance?

Bryson Services,Inc.performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received a check by mail on January 5.Which of the following accounts should appear on the balance sheet as of December 31 as related to the services performed?

Which of the following is considered a fiscal year?

The following extract was taken from the worksheet of Kelly Bakers for the year 2016. Kelly takers Worksheet December 31, 2016 For the above information,determine the amount of Depreciation Expense for the equipment used in the business.

The following Office Supplies account information is available for Able,Inc. Beginning balance \ 1,800 Office Supplies expensed 5,000 Ending balance 2,000 From the above information,calculate the amount of office supplies purchased.

Revenue is earned when the business has ________.

Accounting and the Business Environment

Recording Business Transactions

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Accounting Information Systems

Filters