Question 1

Which of the following statements is true?

Accepted Answer

A)  Retained earnings must be closed each accounting period. 
B)  A post-closing trial balance should include only permanent accounts. 
C)  Information on the work sheet can be used in place of preparing financial statements. 
D)  By using a work sheet to prepare adjusting entries, you need not post these entries to the ledger accounts 
E)  Closing entries are only necessary if errors have been made. 
A)  Retained earnings must be closed each accounting period. 
B)  A post-closing trial balance should include only permanent accounts. 
C)  Information on the work sheet can be used in place of preparing financial statements. 
D)  By using a work sheet to prepare adjusting entries, you need not post these entries to the ledger accounts 
E)  Closing entries are only necessary if errors have been made.

Question 2

Prepare an income statement from the adjusted trial balance of Hanson Storage.

Accepted Answer

None

Question 3

Financial statements are typically prepared in the following order:

Accepted Answer

A)  Balance sheet, statement of retained earnings, income statement. 
B)  Statement of retained earnings, balance sheet, income statement. 
C)  Income statement, balance sheet, statement of retained earnings. 
D)  Income statement, statement of retained earnings, balance sheet. 
E)  Balance sheet, income statement, statement of retained earnings. 
A)  Balance sheet, statement of retained earnings, income statement. 
B)  Statement of retained earnings, balance sheet, income statement. 
C)  Income statement, balance sheet, statement of retained earnings. 
D)  Income statement, statement of retained earnings, balance sheet. 
E)  Balance sheet, income statement, statement of retained earnings.

Question 4

Shown below are selected data taken from the unadjusted and adjusted trial balances for the Simonson Company for the current year ended December 31.Determine the items A through H below.

Accepted Answer

a. No adjustments to cash.
b. $700 - O

Question 5

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Accepted Answer

A) True 
 B)False

Question 6

Identify the differences between accrual accounting and cash basis accounting.

Accepted Answer

Accrual accounting records rev

Question 7

Manning,Co.collected six-months' rent in advance from a tenant on November 1 of the current year.When cash was collected,the following entry was made:
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Nov. 01 } & \text { Cash } & 15,000 & \
\hline & \text { Rent Revenue Earned } & & 15,000 \
\hline
\end{array}$$ 
Prepare the required adjusting entry at December 31 of the current year.

Accepted Answer

($15,000/6 mo. = $2,

Question 8

Accumulated depreciation,accounts receivable,and service fees earned would be sorted to which respective columns in completing a work sheet?

Accepted Answer

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

Question 9

The accrual basis of accounting is an accounting system in which revenues are reported as earned when cash is received.

Accepted Answer

A) True 
 B)False

Question 10

A company shows a $600 balance in prepaid insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $200.This adjusting entry results in:

Accepted Answer

A)  $200 less in net income. 
B)  $200 more in net income. 
C)  $200 difference between the debit and credit columns of the unadjusted trial balance. 
D)  $200 of prepaid insurance. 
E)  An error in the financial statements. 
A)  $200 less in net income. 
B)  $200 more in net income. 
C)  $200 difference between the debit and credit columns of the unadjusted trial balance. 
D)  $200 of prepaid insurance. 
E)  An error in the financial statements.

Question 11

Which of the following identifies the proper order of the accounting cycle?

Accepted Answer

A)  Analyze, journalize, unadjusted trial balance 
B)  Analyze, post, unadjusted trial balance 
C)  Journalize, post, unadjusted trial balance 
D)  Unadjusted trial balance, adjusted trial balance, close 
E)  Adjusted trial balance, adjustments, financial statements 
A)  Analyze, journalize, unadjusted trial balance 
B)  Analyze, post, unadjusted trial balance 
C)  Journalize, post, unadjusted trial balance 
D)  Unadjusted trial balance, adjusted trial balance, close 
E)  Adjusted trial balance, adjustments, financial statements

Question 12

Profit margin equals ___________________ divided by net sales.

Accepted Answer

The answer of Profit margin equals ___________________ divided by net...

Question 13

The asset section of a classified balance sheet usually includes:

Accepted Answer

A)  Current assets, investments, plant assets, and intangible assets. 
B)  Current assets, long-term assets, revenues, and intangible assets. 
C)  Current assets, investments, plant assets, and equity. 
D)  Current liabilities, investments, plant assets, and intangible assets. 
E)  Current assets, liabilities, plant assets, and intangible assets. 
A)  Current assets, investments, plant assets, and intangible assets. 
B)  Current assets, long-term assets, revenues, and intangible assets. 
C)  Current assets, investments, plant assets, and equity. 
D)  Current liabilities, investments, plant assets, and intangible assets. 
E)  Current assets, liabilities, plant assets, and intangible assets.

Question 14

If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be:

Accepted Answer

A)  An overstatement of net income. 
B)  An overstatement of assets. 
C)  An overstatement of liabilities. 
D)  An overstatement of equity. 
E)  An understatement of liabilities. 
A)  An overstatement of net income. 
B)  An overstatement of assets. 
C)  An overstatement of liabilities. 
D)  An overstatement of equity. 
E)  An understatement of liabilities.

Question 15

A partially completed worksheet is shown below.The unadjusted trial balance columns are complete.Complete the adjustments,adjusted trial balance,income statement,and balance sheet columns.

Accepted Answer

a Adjusted fees earned - unadjusted fe

Question 16

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Accepted Answer

A)  Depreciation Expense 
B)  Unearned Depreciation 
C)  Prepaid Depreciation 
D)  Depreciation Value 
E)  Book Value 
A)  Depreciation Expense 
B)  Unearned Depreciation 
C)  Prepaid Depreciation 
D)  Depreciation Value 
E)  Book Value

Question 17

__________________ expenses are those costs that are incurred in a period but are both unpaid and unrecorded.

Accepted Answer

The answer of __________________ expenses are those costs that are...

Question 18

A 10-column spreadsheet used to draft a company's unadjusted trial balance,adjusting entries,adjusted trial balance,and financial statements and which is an optional tool in the accounting process is a(n):

Accepted Answer

A)  Adjusted trial balance 
B)  Work sheet 
C)  Post-closing trial balance 
D)  Unadjusted trial balance 
E)  General ledger 
A)  Adjusted trial balance 
B)  Work sheet 
C)  Post-closing trial balance 
D)  Unadjusted trial balance 
E)  General ledger

Question 19

A(n)_______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Accepted Answer

unadjusted

Question 20

Following are selected accounts and their balances for a company after the adjustments as of May 31,the end of its fiscal year.(All accounts have normal balances.)
 $\begin{array}{|l|r|}
\hline \text { Retained earnings } & \$ 30,000 \
\hline \text { Dividends } & 6,000 \
\hline \text { Fees earned } & 20,000 \
\hline \text { Salaries expense } & 7,000 \
\hline \text { Insurance expense } & 350 \
\hline \text { Utilities expense } & 75 \
\hline \text { Supplies expense } & 500 \
\hline \text { Supplies } & 400 \
\hline \text { Salaries payable } & 300 \
\hline \text { Depreciation expense } & 425 \
\hline
\end{array}$ 
Prepare all the necessary closing entries for this company.

Accepted Answer

None

Exam 3: Adjusting Accounts and Preparing Financial Statements

Which of the following statements is true?

Prepare an income statement from the adjusted trial balance of Hanson Storage.

Financial statements are typically prepared in the following order:

Shown below are selected data taken from the unadjusted and adjusted trial balances for the Simonson Company for the current year ended December 31.Determine the items A through H below.

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Identify the differences between accrual accounting and cash basis accounting.

Manning,Co.collected six-months' rent in advance from a tenant on November 1 of the current year.When cash was collected,the following entry was made: Nov. 01 Cash 15,000 Rent Revenue Earned 15,000 Prepare the required adjusting entry at December 31 of the current year.

Accumulated depreciation,accounts receivable,and service fees earned would be sorted to which respective columns in completing a work sheet?

The accrual basis of accounting is an accounting system in which revenues are reported as earned when cash is received.

A company shows a $600 balance in prepaid insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $200.This adjusting entry results in:

Which of the following identifies the proper order of the accounting cycle?

Profit margin equals ___________________ divided by net sales.

The asset section of a classified balance sheet usually includes:

If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be:

A partially completed worksheet is shown below.The unadjusted trial balance columns are complete.Complete the adjustments,adjusted trial balance,income statement,and balance sheet columns.

The difference between the cost of an asset and the accumulated depreciation for that asset is called

__________________ expenses are those costs that are incurred in a period but are both unpaid and unrecorded.

A 10-column spreadsheet used to draft a company's unadjusted trial balance,adjusting entries,adjusted trial balance,and financial statements and which is an optional tool in the accounting process is a(n):

A(n)_______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

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

Filters