Question 1

An expense that has been incurred but not yet paid is called a(n)________.

Accepted Answer

A) accrued revenue 
B) deferred expense 
C) deferred revenue 
D) accrued expense 
A) accrued revenue 
B) deferred expense 
C) deferred revenue 
D) accrued expense

Question 2

The accountant for Noble Jewelry Repair Services,Inc.forgot to make an adjusting entry for Depreciation Expense for the current year.Which of the following is an effect of this error?

Accepted Answer

A) Revenues are understated. 
B) Total assets are understated. 
C) Net income is overstated. 
D) Total liabilities are understated. 
A) Revenues are understated. 
B) Total assets are understated. 
C) Net income is overstated. 
D) Total liabilities are understated.

Question 3

Anthony Delivery Service has a weekly payroll of $32,000.December 31 falls on Tuesday and Anthony will pay its employees the following Monday (January 6)for the previous full week.Assume that Anthony has a five-day workweek and has an unadjusted balance in Salaries Expense of $925,000.What is the December 31 balance of Salaries Expense after adjusting entries are recorded and posted?

Accepted Answer

A) $925,000 
B) $957,000 
C) $944,200 
D) $937,800 
A) $925,000 
B) $957,000 
C) $944,200 
D) $937,800

Question 4

A business hired a repair service to overhaul its plumbing system.The repair service began work on September 15 and intends to complete it on October 15.The business will pay the repair service $4,000 when the work is completed.As of September 30,the work was 50% complete.Provide the adjusting entry to accrue repair expense by the end of September.(Ignore explanation).

Accepted Answer

The answer of A business hired a repair service to...

Question 5

The Accumulated Depreciation account is ________.

Accepted Answer

A) a record of the sum of all the depreciation expense recorded 
B) the price quoted to the buyer of a used asset 
C) an expense account 
D) the expense account used to expense the cost of an asset 
A) a record of the sum of all the depreciation expense recorded 
B) the price quoted to the buyer of a used asset 
C) an expense account 
D) the expense account used to expense the cost of an asset

Question 6

The accountant of Delta,Inc.failed to make an adjusting entry to record $6,000 of unearned service revenue that has now been earned.Assume the deferred revenue was initially recorded as a liability.Which of the following statements is true?

Accepted Answer

A) The total revenue will be overstated. 
B) The total revenue will be understated. 
C) The total expenses will be overstated. 
D) The total expenses will be understated. 
A) The total revenue will be overstated. 
B) The total revenue will be understated. 
C) The total expenses will be overstated. 
D) The total expenses will be understated.

Question 7

Harvard Financial Services,Inc.purchased computers that are to be used in its consultancy services.Based on the matching principle,what account,other than Computers,should appear on the balance sheet as of December 31,2016?

Accepted Answer

A) Depreciation Expense 
B) Service Revenue 
C) Accumulated Depreciation 
D) Equipment Expense 
A) Depreciation Expense 
B) Service Revenue 
C) Accumulated Depreciation 
D) Equipment Expense

Question 8

What is the term used for the difference between the Equipment account and the Accumulated Depreciation account?

Accepted Answer

A) contra asset 
B) market value 
C) historical cost 
D) book value 
A) contra asset 
B) market value 
C) historical cost 
D) book value

Question 9

Recipes,Inc.purchased $2,000 of supplies on account.Under the accrual basis of accounting,no entry is made until the amount is paid.

Accepted Answer

A) True 
 B)False

Question 10

A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a ________.The company uses a liability account for revenue received in advance.

Accepted Answer

A) credit to Accounts Payable for $5,000 
B) debit to Prepaid Expenses for $5,000 
C) credit to Unearned Revenue for $5,000 
D) debit to Note Payable for $5,000 
A) credit to Accounts Payable for $5,000 
B) debit to Prepaid Expenses for $5,000 
C) credit to Unearned Revenue for $5,000 
D) debit to Note Payable for $5,000

Question 11

The matching principle is also called the ________.

Accepted Answer

A) adjusting entry concept 
B) revenue recognition principle 
C) expense recognition principle 
D) time period concept 
A) adjusting entry concept 
B) revenue recognition principle 
C) expense recognition principle 
D) time period concept

Question 12

During the accounting period,office supplies were purchased on account for $3,200.A physical count,on the last day of the accounting period,shows $1,100 of office supplies on hand.Supplies Expense for the accounting period is $3,600.What was the beginning balance of Office Supplies?

Accepted Answer

A) $4,700 
B) $2,100 
C) $1,500 
D) There is not enough information to answer this question. 
A) $4,700 
B) $2,100 
C) $1,500 
D) There is not enough information to answer this question.

Question 13

If a company fails to make an adjusting entry for accrued revenues,the net income will be overstated.

Accepted Answer

A) True 
 B)False

Question 14

The entry to record depreciation includes a debit to the ________.

Accepted Answer

A) Equipment account 
B) Cash account 
C) Accumulated Depreciation account 
D) Depreciation Expense account 
A) Equipment account 
B) Cash account 
C) Accumulated Depreciation account 
D) Depreciation Expense account

Question 15

The asset account,Office Supplies,had a beginning balance of $3,800.During the accounting period,office supplies were purchased,on account,for $2,500.Supplies Expense for the accounting period is $4,000.What is the ending balance of Office Supplies?

Accepted Answer

A) $6,300 
B) $2,300 
C) $4,000 
D) $5,300 
A) $6,300 
B) $2,300 
C) $4,000 
D) $5,300

Question 16

The accounting records of Marcus Service Company include the following selected,unadjusted balances at June 30: Accounts Receivable,$2,700; Office Supplies,$1,800; Prepaid Rent,$3,600; Equipment,$15,000; Accumulated Depreciation - Equipment,$1,800; Salaries Payable,$0; Unearned Revenue,$2,400; Office Supplies Expense,$2,800; Rent Expense,$0; Salaries Expense,$15,000; Service Revenue,$40,500.
The following data developed for adjusting entries are as follows:
a.Service revenue accrued,$1,400
b.Unearned Revenue that has been earned,$800
c.Office Supplies on hand,$700
d.Salaries owed to employees,$1,800
e.One month of prepaid rent has expired,$1,200
f.Depreciation on equipment,$1,500
Journalize the adjusting entries.Omit explanations.

Accepted Answer

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Question 17

List and briefly discuss three accounting concepts and principles that apply to accrual basis accounting.

Accepted Answer

1.Time period concept - A business's act

Question 18

The entry to record depreciation includes a credit to the ________.

Accepted Answer

A) Depreciation Payable account 
B) Cash account 
C) Accumulated Depreciation account 
D) Depreciation Expense account 
A) Depreciation Payable account 
B) Cash account 
C) Accumulated Depreciation account 
D) Depreciation Expense account

Question 19

The accountant of Skyscrapers Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense.Which of the following statements is true?

Accepted Answer

A) The total liabilities will be overstated. 
B) The equity will be understated. 
C) The total assets will be overstated. 
D) The total assets will be understated. 
A) The total liabilities will be overstated. 
B) The equity will be understated. 
C) The total assets will be overstated. 
D) The total assets will be understated.

Question 20

On January 1,Unearned Revenue of Grossman,Inc.had a beginning balance of $1,400.During January,the company earned $700 of the deferred revenue.The company also collected $6,000 from a new customer for services to be performed the following month.At the end of January,the Unearned Revenue account should have a balance of $6,000.

Accepted Answer

A) True 
 B)False

Exam 3: The Adjusting Process

An expense that has been incurred but not yet paid is called a(n)________.

The accountant for Noble Jewelry Repair Services,Inc.forgot to make an adjusting entry for Depreciation Expense for the current year.Which of the following is an effect of this error?

The Accumulated Depreciation account is ________.

The accountant of Delta,Inc.failed to make an adjusting entry to record $6,000 of unearned service revenue that has now been earned.Assume the deferred revenue was initially recorded as a liability.Which of the following statements is true?

Harvard Financial Services,Inc.purchased computers that are to be used in its consultancy services.Based on the matching principle,what account,other than Computers,should appear on the balance sheet as of December 31,2016?

What is the term used for the difference between the Equipment account and the Accumulated Depreciation account?

Recipes,Inc.purchased $2,000 of supplies on account.Under the accrual basis of accounting,no entry is made until the amount is paid.

A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a ________.The company uses a liability account for revenue received in advance.

The matching principle is also called the ________.

During the accounting period,office supplies were purchased on account for $3,200.A physical count,on the last day of the accounting period,shows $1,100 of office supplies on hand.Supplies Expense for the accounting period is $3,600.What was the beginning balance of Office Supplies?

If a company fails to make an adjusting entry for accrued revenues,the net income will be overstated.

The entry to record depreciation includes a debit to the ________.

The asset account,Office Supplies,had a beginning balance of $3,800.During the accounting period,office supplies were purchased,on account,for $2,500.Supplies Expense for the accounting period is $4,000.What is the ending balance of Office Supplies?

List and briefly discuss three accounting concepts and principles that apply to accrual basis accounting.

The entry to record depreciation includes a credit to the ________.

The accountant of Skyscrapers Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense.Which of the following statements is true?

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

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