Question 1

Match the following types of accounts with each of the following transactions.

Accepted Answer

@#IMG-DLM&_TB6312_00

Question 2

Explain how accounting adjustments affect financial statements.

Accepted Answer

Without accounting adjustments many acco

Question 3

On December 31,the balance in the Prepaid Subscription account was $648.This is the remaining balance of a 12-month subscription purchased on September 30 in the current year.How much did this subscription originally cost?

Accepted Answer

A)  $72 
B)  $648 
C)  $7,776 
D)  $864 
E)  $1,512 
A)  $72 
B)  $648 
C)  $7,776 
D)  $864 
E)  $1,512

Question 4

Which of the following does not require an adjusting entry at year-end?

Accepted Answer

A)  Accrued interest on notes payable. 
B)  Supplies used during the period. 
C)  Cash investments by stockholders. 
D)  Accrued wages. 
E)  Expired portion of prepaid insurance. 
A)  Accrued interest on notes payable. 
B)  Supplies used during the period. 
C)  Cash investments by stockholders. 
D)  Accrued wages. 
E)  Expired portion of prepaid insurance.

Question 5

An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):

Accepted Answer

A)  Accrued expense 
B)  Contra account 
C)  Accrued revenue 
D)  Intangible asset 
E)  Adjunct account 
A)  Accrued expense 
B)  Contra account 
C)  Accrued revenue 
D)  Intangible asset 
E)  Adjunct account

Question 6

If a company records prepayment of expenses in an asset account,the adjusting entry would:

Accepted Answer

A)  Result in a debit to an expense and a credit to an asset account. 
B)  Cause an adjustment to prior expense to be overstated and assets to be understated. 
C)  Cause an accrued liability account to exist. 
D)  Result in a debit to a liability and a credit to an asset account. 
E)  Decrease cash. 
A)  Result in a debit to an expense and a credit to an asset account. 
B)  Cause an adjustment to prior expense to be overstated and assets to be understated. 
C)  Cause an accrued liability account to exist. 
D)  Result in a debit to a liability and a credit to an asset account. 
E)  Decrease cash.

Question 7

IFRS tends to be more principles-based compared with GAAP,which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

Accepted Answer

A)  A principles-based system eliminates the need for internal controls. 
B)  A principles-based system is significantly weaker than a rules-based system. 
C)  A principles-based system will eliminate all fraud. 
D)  A principles-based system is a way to calculate interest receivable or payable. 
E)  A principles-based system depends heavily on control procedures to reduce the potential for fraud or misconduct. 
A)  A principles-based system eliminates the need for internal controls. 
B)  A principles-based system is significantly weaker than a rules-based system. 
C)  A principles-based system will eliminate all fraud. 
D)  A principles-based system is a way to calculate interest receivable or payable. 
E)  A principles-based system depends heavily on control procedures to reduce the potential for fraud or misconduct.

Question 8

How is a classified balance sheet different from an unclassified balance sheet? List the order of the usual classifications on a classified balance sheet.

Accepted Answer

An unclassified balance sheet broadly gr

Question 9

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Accepted Answer

A) True 
 B)False

Question 10

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

Accepted Answer

The answer of A _____________ account is an account linked...

Question 11

The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.

Accepted Answer

A) True 
 B)False

Question 12

In general journal form,record the December 31 adjusting entries for the following transactions and events.Assume that December 31 is the end of the annual accounting period.
a.The Prepaid Insurance account shows a debit balance of $2,340,representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year.
b.The Office Supplies account has a debit balance of $400; a year-end inventory count reveals $80 of supplies still on hand.
c.On November 1 of the current year,Rent Earned was credited for $1,500.This amount represented the rent earned for a three-month period beginning November 1.
d.Estimated depreciation on office equipment is $600.
e.Accrued salaries amount to $400.

Accepted Answer

None

Question 13

List the steps in the accounting cycle.

Accepted Answer

The accounting cycle consists of 10 step

Question 14

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Income Summary } & 13,000 & \
\hline \text { Retained earnings } & & 13,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | c | } 
\hline \text { Income Summary } & 75,000 & \
\hline \text { Revenues } & & 75,000 \
\hline
\end{array}$$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Revenues } & 75,000 & \
\hline \text { Income Summary } & & 75,000 \
\hline
\end{array}$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Income Summary } & 62,000 & \
\hline \text { Expenses } & & 62,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | c | r | r | } 
\hline \text { Retained Earnings } & 1,000 & \
\hline \text { Dividends } & & 1,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Income Summary } & 13,000 & \
\hline \text { Retained earnings } & & 13,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | c | } 
\hline \text { Income Summary } & 75,000 & \
\hline \text { Revenues } & & 75,000 \
\hline
\end{array}$$ 
C)  $\begin{array}{|l|r|r|}
\hline \text { Revenues } & 75,000 & \
\hline \text { Income Summary } & & 75,000 \
\hline
\end{array}$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Income Summary } & 62,000 & \
\hline \text { Expenses } & & 62,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | c | r | r | } 
\hline \text { Retained Earnings } & 1,000 & \
\hline \text { Dividends } & & 1,000 \
\hline
\end{array}$$

Question 15

The adjusted trial balance contains information pertaining to:

Accepted Answer

A)  Asset accounts only. 
B)  Balance sheet accounts only. 
C)  Income statement accounts only. 
D)  All general ledger accounts. 
E)  Revenue accounts only. 
A)  Asset accounts only. 
B)  Balance sheet accounts only. 
C)  Income statement accounts only. 
D)  All general ledger accounts. 
E)  Revenue accounts only.

Question 16

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Accepted Answer

A)  2% 
B)  20% 
C)  200% 
D)  500% 
E)  $8,000 
A)  2% 
B)  20% 
C)  200% 
D)  500% 
E)  $8,000

Exam 3: Adjusting Accounts and Preparing Financial Statements

Match the following types of accounts with each of the following transactions.

Explain how accounting adjustments affect financial statements.

On December 31,the balance in the Prepaid Subscription account was $648.This is the remaining balance of a 12-month subscription purchased on September 30 in the current year.How much did this subscription originally cost?

Which of the following does not require an adjusting entry at year-end?

An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):

If a company records prepayment of expenses in an asset account,the adjusting entry would:

IFRS tends to be more principles-based compared with GAAP,which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

How is a classified balance sheet different from an unclassified balance sheet? List the order of the usual classifications on a classified balance sheet.

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.

List the steps in the accounting cycle.

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

The adjusted trial balance contains information pertaining to:

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Introducing Accounting in Business

Analyzing and Recording Transactions

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Accounting for Partnerships

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