Question 1

Which of the following is an example of a prepaid expense?

Accepted Answer

A)  Supplies 
B)  Accounts Receivable 
C)  Unearned Subscriptions 
D)  Unearned Fees 
A)  Supplies 
B)  Accounts Receivable 
C)  Unearned Subscriptions 
D)  Unearned Fees

Question 2

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

Accepted Answer

A)  Record payment of fees earned. 
B)  Record fees earned at the end of the month. 
C)  Record fees that have not been earned at the end of the month. 
D)  Record payment of fees to be earned. 
A)  Record payment of fees earned. 
B)  Record fees earned at the end of the month. 
C)  Record fees that have not been earned at the end of the month. 
D)  Record payment of fees to be earned.

Question 3

A contra asset account for Land will normally appear on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

The balance in the office supplies account on January 1 was $7,000,supplies purchased during January were $3,000,and the supplies on hand at January 31 were $2,000.The amount to be used for the appropriate adjusting entry is

Accepted Answer

A)  $4,300 
B)  $12,000 
C)  $5,000 
D)  $8,000 
A)  $4,300 
B)  $12,000 
C)  $5,000 
D)  $8,000

Question 5

The financial statements are prepared from the unadjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is considered to be unearned revenue?

Accepted Answer

A)  theater tickets sold last month for yesterday's performance 
B)  theater tickets sold yesterday on credit for yesterday's performance 
C)  theater tickets that were not sold for the current performance 
D)  theater tickets sold for next month's performance 
A)  theater tickets sold last month for yesterday's performance 
B)  theater tickets sold yesterday on credit for yesterday's performance 
C)  theater tickets that were not sold for the current performance 
D)  theater tickets sold for next month's performance

Question 7

By matching revenue earned during the accounting period to related incurred expenses

Accepted Answer

A)  net income or loss will always be underestimated 
B)  net income or loss will always be overestimated 
C)  net income or loss will be properly reported on the income statement 
D)  net income or loss will not be determined 
A)  net income or loss will always be underestimated 
B)  net income or loss will always be overestimated 
C)  net income or loss will be properly reported on the income statement 
D)  net income or loss will not be determined

Question 8

If the adjustment for depreciation for the year is inadvertently omitted,the assets on the balance sheet at the end of the period will be understated.

Accepted Answer

A) True 
 B)False

Question 9

For each of the following errors,considered individually,indicate whether the error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance total to be unequal,indicate whether the debit or credit total is higher and by how much.

Accepted Answer

The answer of For each of the following errors,considered individually,indicate...

Question 10

An adjusting entry would adjust an expense account so the expense is reported when incurred.

Accepted Answer

A) True 
 B)False

Question 11

The entry to adjust for the cost of supplies used during the accounting period is

Accepted Answer

A)  debit Supplies Expense; credit Supplies 
B)  debit Stockholders' Equity; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Stockholders' Equity 
A)  debit Supplies Expense; credit Supplies 
B)  debit Stockholders' Equity; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Stockholders' Equity

Question 12

Prior to the adjusting process,accrued revenue has

Accepted Answer

A)  been earned and cash received 
B)  been earned and not recorded as revenue 
C)  not been earned but recorded as revenue 
D)  not been recorded as revenue but cash has been received 
A)  been earned and cash received 
B)  been earned and not recorded as revenue 
C)  not been earned but recorded as revenue 
D)  not been recorded as revenue but cash has been received

Question 13

A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The last payday of December is Friday,December 27.Assume the next pay period begins on Monday,December 30,and the proper adjusting entry is journalized at the end of the fiscal period (December 31).The entry for the payment of the payroll on Friday,January 10,includes a

Accepted Answer

A)  debit to Salary Expense of $16,000 
B)  debit to Salary Expense of $4,000 
C)  credit to Salaries Payable of $16,000 
D)  credit to Salaries Payable of $4,000 
A)  debit to Salary Expense of $16,000 
B)  debit to Salary Expense of $4,000 
C)  credit to Salaries Payable of $16,000 
D)  credit to Salaries Payable of $4,000

Question 14

At January 31,the end of the first month of the year,the usual adjusting entry transferring expired insurance to an expense account is omitted.Which items will be incorrectly stated,because of the error,on (a)the income statement for January and (b)the balance sheet as of January 31? Also indicate whether the items in error will be overstated or understated.

Accepted Answer

The answer of At January 31,the end of the first...

Question 15

For most large businesses,the cash basis of accounting will provide accurate financial statements for user needs.

Accepted Answer

A) True 
 B)False

Question 16

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as a(n)

Accepted Answer

A)  asset 
B)  liability 
C)  contra asset 
D)  stockholders' equity 
A)  asset 
B)  liability 
C)  contra asset 
D)  stockholders' equity

Question 17

The type of account and normal balance of Prepaid Insurance is

Accepted Answer

A)  asset,credit 
B)  asset,debit 
C)  contra asset,credit 
D)  contra asset,debit 
A)  asset,credit 
B)  asset,debit 
C)  contra asset,credit 
D)  contra asset,debit

Question 18

The estimated amount of depreciation on equipment for the current year is $5,300.Journalize the adjusting entry to record the depreciation.

Accepted Answer

The answer of The estimated amount of depreciation on equipment...

Question 19

On January 1,the Newman Company estimated its property tax to be $5,100 for the year.
​

Accepted Answer

(a)$425 ($

Question 20

Accumulated depreciation accounts are liability accounts.

Accepted Answer

A) True 
 B)False

Exam 3: The Adjusting Process

Which of the following is an example of a prepaid expense?

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

A contra asset account for Land will normally appear on the balance sheet.

The balance in the office supplies account on January 1 was $7,000,supplies purchased during January were $3,000,and the supplies on hand at January 31 were $2,000.The amount to be used for the appropriate adjusting entry is

The financial statements are prepared from the unadjusted trial balance.

Which of the following is considered to be unearned revenue?

By matching revenue earned during the accounting period to related incurred expenses

If the adjustment for depreciation for the year is inadvertently omitted,the assets on the balance sheet at the end of the period will be understated.

For each of the following errors,considered individually,indicate whether the error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance total to be unequal,indicate whether the debit or credit total is higher and by how much.

An adjusting entry would adjust an expense account so the expense is reported when incurred.

The entry to adjust for the cost of supplies used during the accounting period is

Prior to the adjusting process,accrued revenue has

For most large businesses,the cash basis of accounting will provide accurate financial statements for user needs.

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as a(n)

The type of account and normal balance of Prepaid Insurance is

The estimated amount of depreciation on equipment for the current year is $5,300.Journalize the adjusting entry to record the depreciation.

On January 1,the Newman Company estimated its property tax to be $5,100 for the year. ​

Accumulated depreciation accounts are liability accounts.

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

On January 1,the Newman Company estimated its property tax to be $5,100 for the year.