Question 1

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

Accepted Answer

A)  records revenues when they are earned and expenses when they are paid 
B)  records revenues and expenses when they are incurred 
C)  records revenues when cash is received and expenses when they are incurred 
D)  records revenues and expenses when the company needs to apply for a loan 
A)  records revenues when they are earned and expenses when they are paid 
B)  records revenues and expenses when they are incurred 
C)  records revenues when cash is received and expenses when they are incurred 
D)  records revenues and expenses when the company needs to apply for a loan

Question 2

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Accepted Answer

A) True 
 B)False

Question 3

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Accepted Answer

A)  prepaid 
B)  deferred 
C)  accrued 
D)  matched 
A)  prepaid 
B)  deferred 
C)  accrued 
D)  matched

Question 4

On November 1,clients of Great Designs Company prepaid $4,250 for services to be provided in the future at a rate of $85 per hour.
​
(a)Journalize the receipt of cash.
(b)As of November 30,Great Designs shows that 15 hours of services have been provided on this agreement. Prepare the necessary journal entry.
(c)Determine the total unearned fees in hours and dollars at November 30.

Accepted Answer

The answer of On November 1,clients of Great Designs Company...

Question 5

Smokey Company purchases a one-year insurance policy on July 1 for $3,600.The adjusting entry on December 31 is

Accepted Answer

A)  debit Insurance Expense,$1,800; credit Prepaid Insurance,$1,800 
B)  debit Insurance Expense,$1,500; credit Prepaid Insurance,$1,500 
C)  debit Insurance Expense,$2,100; credit Prepaid Insurance,$2,100 
D)  debit Prepaid Insurance,$1,800; credit Cash,$1,800 
A)  debit Insurance Expense,$1,800; credit Prepaid Insurance,$1,800 
B)  debit Insurance Expense,$1,500; credit Prepaid Insurance,$1,500 
C)  debit Insurance Expense,$2,100; credit Prepaid Insurance,$2,100 
D)  debit Prepaid Insurance,$1,800; credit Cash,$1,800

Question 6

The revenue recognition principle states that revenue should be recorded in the same period as the cash is received.

Accepted Answer

A) True 
 B)False

Question 7

Using the following account balances for Garry's Tree Service,prepare a trial balance.
​

Accepted Answer

The answer of Using the following account balances for Garry's...

Question 8

Record journal entries for the following transactions.
​
​(a)On December 1,$18,000 was received for a service contract to be performed from December 1 through April 30.
​(b)Assuming the work is performed evenly throughout the contract period,prepare the adjusting journal entry on December 31.

Accepted Answer

The answer of Record journal entries for the following transactions.
​
​(a)On...

Question 9

Which of the following pairs of accounts could not appear in the same adjusting entry?

Accepted Answer

A)  Fees Earned and Unearned Fees 
B)  Interest Income and Interest Expense 
C)  Rent Expense and Prepaid Rent 
D)  Salaries Payable and Salaries Expense 
A)  Fees Earned and Unearned Fees 
B)  Interest Income and Interest Expense 
C)  Rent Expense and Prepaid Rent 
D)  Salaries Payable and Salaries Expense

Question 10

The type of account and normal balance of Unearned Consulting Fees is

Accepted Answer

A)  revenue,credit 
B)  expense,debit 
C)  liability,credit 
D)  liability,debit 
A)  revenue,credit 
B)  expense,debit 
C)  liability,credit 
D)  liability,debit

Question 11

Prepare adjusting entries for the following transactions:

Accepted Answer

The answer of Prepare adjusting entries for the following transactions:
...

Question 12

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

Accepted Answer

A) True 
 B)False

Question 13

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Accepted Answer

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

Question 14

What effect will the following adjusting journal entry have on the accounting records?

Accepted Answer

A)  increase net income 
B)  increase revenues 
C)  decrease expenses 
D)  decrease net book value 
A)  increase net income 
B)  increase revenues 
C)  decrease expenses 
D)  decrease net book value

Question 15

Under the accrual basis,some accounts in the ledger require updating at the end of the period.Discuss the three main reasons for this updating and give an example of each.

Accepted Answer

Some expenses are not recorded daily.For

Question 16

The adjusting entry to record the depreciation of a building for the fiscal period is

Accepted Answer

A)  debit Depreciation Expense; credit Building. 
B)  debit Depreciation Expense; credit Accumulated Depreciation. 
C)  debit Accumulated Depreciation; credit Depreciation Expense. 
D)  debit Building; credit Depreciation Expense. 
A)  debit Depreciation Expense; credit Building. 
B)  debit Depreciation Expense; credit Accumulated Depreciation. 
C)  debit Accumulated Depreciation; credit Depreciation Expense. 
D)  debit Building; credit Depreciation Expense.

Question 17

When is the adjusted trial balance prepared?

Accepted Answer

A)  before adjusting journal entries are posted 
B)  after adjusting journal entries are posted 
C)  after the adjusting journal entries are journalized 
D)  before the adjusting journal entries are journalized 
A)  before adjusting journal entries are posted 
B)  after adjusting journal entries are posted 
C)  after the adjusting journal entries are journalized 
D)  before the adjusting journal entries are journalized

Question 18

DogMart Company records depreciation for equipment.Depreciation for the period ending December 31 is $1,400 for office equipment and $2,650 for production equipment.Prepare the two entries to record the depreciation.

Accepted Answer

The answer of DogMart Company records depreciation for equipment.Depreciation for...

Question 19

A company receives $360 for a 12-month trade magazine subscription on August 1.The adjusting entry on December 31 is a debit to Unearned Subscription Revenue,$150,and a credit to Subscription Revenue,$150.

Accepted Answer

A) True 
 B)False

Question 20

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Accepted Answer

A)  depreciation 
B)  deferral 
C)  accrual 
D)  inventory 
A)  depreciation 
B)  deferral 
C)  accrual 
D)  inventory

Exam 3: The Adjusting Process

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Smokey Company purchases a one-year insurance policy on July 1 for $3,600.The adjusting entry on December 31 is

The revenue recognition principle states that revenue should be recorded in the same period as the cash is received.

Using the following account balances for Garry's Tree Service,prepare a trial balance. ​

Record journal entries for the following transactions. ​ ​(a)On December 1,$18,000 was received for a service contract to be performed from December 1 through April 30. ​(b)Assuming the work is performed evenly throughout the contract period,prepare the adjusting journal entry on December 31.

Which of the following pairs of accounts could not appear in the same adjusting entry?

The type of account and normal balance of Unearned Consulting Fees is

Prepare adjusting entries for the following transactions:

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

What effect will the following adjusting journal entry have on the accounting records?

Under the accrual basis,some accounts in the ledger require updating at the end of the period.Discuss the three main reasons for this updating and give an example of each.

The adjusting entry to record the depreciation of a building for the fiscal period is

When is the adjusted trial balance prepared?

DogMart Company records depreciation for equipment.Depreciation for the period ending December 31 is $1,400 for office equipment and $2,650 for production equipment.Prepare the two entries to record the depreciation.

A company receives $360 for a 12-month trade magazine subscription on August 1.The adjusting entry on December 31 is a debit to Unearned Subscription Revenue,$150,and a credit to Subscription Revenue,$150.

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Using the following account balances for Garry's Tree Service,prepare a trial balance.

Record journal entries for the following transactions. (a)On December 1,$18,000 was received for a service contract to be performed from December 1 through April 30. (b)Assuming the work is performed evenly throughout the contract period,prepare the adjusting journal entry on December 31.