Question 1

Prepaid expenses,depreciation,accrued expenses,unearned revenues and accrued revenues are all examples of:

Accepted Answer

A) Items that require contra accounts 
B) Items that require adjusting entries 
C) Asset and equity 
D) Asset accounts 
E) Income statement accounts 
A) Items that require contra accounts 
B) Items that require adjusting entries 
C) Asset and equity 
D) Asset accounts 
E) Income statement accounts

Question 2

During the current year ended December 31,clients paid fees in advance for accounting services amounting to $25,000.These fees were recorded in an account called Unearned Accounting Fees.If $3,500 of these fees are still unearned on December 31 of this year present the December 31 adjusting entry to bring the accounts up to date.

Accepted Answer

None

Question 3

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

Question 4

The items that follow appeared in the Income Statement columns of the work sheet prepared for Armstrong Delivery Service at current year-end.In addition,Retained earnings had a credit balance of $117,000 and Dividends had a debit balance of $30,000 at year end.Prepare closing journal entries for this company.

Accepted Answer

None

Question 5

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 6

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 7

Describe a worksheet and explain why it is useful.

Accepted Answer

A worksheet is a useful tool for organiz

Question 8

Each letter below contains three of the steps found in the accounting cycle.Which presents the given steps in the proper sequence,first to last?

Accepted Answer

A) Adjust,Analyze transactions,Close 
B) Analyze transactions,Adjust,Close 
C) Prepare post-closing trial balance,Prepare statements,Close 
D) Prepare statements,Post,Close 
E) Prepare adjusted trial balance,Journalize,Close 
A) Adjust,Analyze transactions,Close 
B) Analyze transactions,Adjust,Close 
C) Prepare post-closing trial balance,Prepare statements,Close 
D) Prepare statements,Post,Close 
E) Prepare adjusted trial balance,Journalize,Close

Question 9

The following are the steps in the accounting cycle.List them in the order in which they are completed:
Prepare adjusted trial balance
Post transactions
Prepare an unadjusted trial balance
Journalize transactions
Prepare the financial statements
Close the temporary accounts
Adjust the ledger accounts
Prepare a post-closing trial balance
Analyze transactions

Accepted Answer

1 Analyze transactions
2 Journalize tran

Question 10

Describe the two alternate methods used to account for prepaid expenses.

Accepted Answer

The first method places all prepaid expe

Question 11

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 12

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 13

What is the usual order in which financial statements are prepared from the adjusted trial balance? Why are they prepared in that order?

Accepted Answer

The income statement is prepared first.T

Question 14

A company records the fees for legal services paid in advance by its clients in an account called Unearned Legal Fees.If the company fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned,one effect will be:

Accepted Answer

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

Question 15

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Accepted Answer

A) True 
 B)False

Question 16

Adjusting entries:

Accepted Answer

A) Affect only income statement accounts 
B) Affect only balance sheet accounts 
C) Affect both income statement and balance sheet accounts 
D) Affect only cash flow statement accounts 
E) Affect only equity accounts 
A) Affect only income statement accounts 
B) Affect only balance sheet accounts 
C) Affect both income statement and balance sheet accounts 
D) Affect only cash flow statement accounts 
E) Affect only equity accounts

Question 17

Which of the following is true of accrued revenues:

Accepted Answer

A) At the end of one accounting period often result in cash receipts from customers in the next period 
B) At the end of one accounting period often result in cash payments in the next period 
C) Are also called unearned revenues 
D) Are listed on the balance sheet as liabilities 
E) Are recorded at the end of an accounting period because cash has already been received for revenues earned 
A) At the end of one accounting period often result in cash receipts from customers in the next period 
B) At the end of one accounting period often result in cash payments in the next period 
C) Are also called unearned revenues 
D) Are listed on the balance sheet as liabilities 
E) Are recorded at the end of an accounting period because cash has already been received for revenues earned

Question 18

The Unadjusted Trial Balance columns of a company's work sheet show the balance in the Office Supplies account as $750.The Adjustments columns show that $425 of these supplies were used during the period.The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is:

Accepted Answer

A) $325 debit 
B) $325 credit 
C) $425 debit 
D) $750 debit 
E) $750 credit 
A) $325 debit 
B) $325 credit 
C) $425 debit 
D) $750 debit 
E) $750 credit

Question 19

A trial balance prepared before any adjustments have been recorded is:

Accepted Answer

A) An adjusted trial balance 
B) Used to prepare financial statements 
C) An unadjusted trial balance 
D) Correct with respect to proper balance sheet and income statement amounts 
E) Only prepared once a year 
A) An adjusted trial balance 
B) Used to prepare financial statements 
C) An unadjusted trial balance 
D) Correct with respect to proper balance sheet and income statement amounts 
E) Only prepared once a year

Question 20

Expenses incurred but unpaid that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Accepted Answer

A) Intangible expenses 
B) Prepaid expenses 
C) Unearned expenses 
D) Net expenses 
E) Accrued expenses 
A) Intangible expenses 
B) Prepaid expenses 
C) Unearned expenses 
D) Net expenses 
E) Accrued expenses

Prepaid expenses,depreciation,accrued expenses,unearned revenues and accrued revenues are all examples of:

Accumulated Depreciation,Accounts Receivable and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

The adjusted trial balance contains information pertaining to:

Describe a worksheet and explain why it is useful.

Each letter below contains three of the steps found in the accounting cycle.Which presents the given steps in the proper sequence,first to last?

Describe the two alternate methods used to account for prepaid expenses.

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:

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):

What is the usual order in which financial statements are prepared from the adjusted trial balance? Why are they prepared in that order?

A company records the fees for legal services paid in advance by its clients in an account called Unearned Legal Fees.If the company fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned,one effect will be:

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Adjusting entries:

Which of the following is true of accrued revenues:

The Unadjusted Trial Balance columns of a company's work sheet show the balance in the Office Supplies account as $750.The Adjustments columns show that $425 of these supplies were used during the period.The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is:

A trial balance prepared before any adjustments have been recorded is:

Expenses incurred but unpaid that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Introducing Accounting in Business

Analyzing and Recording Transactions

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 3: Adjusting Accounts and Preparing Financial Statements

Prepaid expenses,depreciation,accrued expenses,unearned revenues and accrued revenues are all examples of:

Accumulated Depreciation,Accounts Receivable and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

The adjusted trial balance contains information pertaining to:

Describe a worksheet and explain why it is useful.

Each letter below contains three of the steps found in the accounting cycle.Which presents the given steps in the proper sequence,first to last?

Describe the two alternate methods used to account for prepaid expenses.

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:

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):

What is the usual order in which financial statements are prepared from the adjusted trial balance? Why are they prepared in that order?

A company records the fees for legal services paid in advance by its clients in an account called Unearned Legal Fees.If the company fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned,one effect will be:

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Adjusting entries:

Which of the following is true of accrued revenues:

The Unadjusted Trial Balance columns of a company's work sheet show the balance in the Office Supplies account as $750.The Adjustments columns show that $425 of these supplies were used during the period.The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is:

A trial balance prepared before any adjustments have been recorded is:

Expenses incurred but unpaid that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Introducing Accounting in Business

Analyzing and Recording Transactions

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters