Question 1

Which of the following is the usual final step in the accounting cycle?

Accepted Answer

A) Journalizing transactions 
B) Preparing an adjusted trial balance 
C) Preparing a post-closing trial balance 
D) Preparing the financial statements 
E) Preparing a work sheet 
A) Journalizing transactions 
B) Preparing an adjusted trial balance 
C) Preparing a post-closing trial balance 
D) Preparing the financial statements 
E) Preparing a work sheet

Question 2

The Income Summary account is used to close the permanent accounts at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Question 3

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.
The adjusting entry on December 31,2011 for Apricot would include:

Accepted Answer

A) A debit to an expense for $1,250 
B) A debit to a prepaid expense for $1,250 
C) A credit to an expense for $3,750 
D) A debit to a prepaid expense for $3,750 
E) A credit to a liability for $1,250 
A) A debit to an expense for $1,250 
B) A debit to a prepaid expense for $1,250 
C) A credit to an expense for $3,750 
D) A debit to a prepaid expense for $3,750 
E) A credit to a liability for $1,250

Question 4

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day to day operations of the business:

Accepted Answer

A) Is referred to as depreciation expense 
B) Is referred to as accumulated depreciation 
C) Is shown on the income statement of the final period 
D) Is only recorded when the asset is disposed of 
E) Is referred to as an accrued asset 
A) Is referred to as depreciation expense 
B) Is referred to as accumulated depreciation 
C) Is shown on the income statement of the final period 
D) Is only recorded when the asset is disposed of 
E) Is referred to as an accrued asset

Question 5

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 6

An adjusting entry was made on December 31,2011 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2012 in the amount of $3,000?

Accepted Answer

A) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 3,000 & \
\hline \text { Cash } & & 3 , 0 0 0 \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { |l | r | r | } 
\hline \text { Salaries Expense } & 1,200 & \
\hline \text { Salaries Payable } & & 1,200 \
\hline
\end{array}$$ 
E) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 1,200 & \
\hline \text { Salaries Expense } & 1,800 & \
\hline \text { Cash } & & 3, 000 \
\hline
\end{array}$$ 
A) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Expense } & 3,000 & \
\hline \text { Cash } & & 3 , 0 0 0 \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 3,000 & \
\hline \text { Cash } & & 3,000 \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 1,200 & \
\hline \text { Cash } & & 1,200 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { |l | r | r | } 
\hline \text { Salaries Expense } & 1,200 & \
\hline \text { Salaries Payable } & & 1,200 \
\hline
\end{array}$$ 
E) 
$$\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 1,200 & \
\hline \text { Salaries Expense } & 1,800 & \
\hline \text { Cash } & & 3, 000 \
\hline
\end{array}$$

Question 7

Calculate the current ratio in each of the following separate cases.
 $$\begin{array} { | l | r | r | } 
\hline & \text { Curent Assets } & \text { Curent Liabilities } \
\hline \text { Case1 } & \$ 75,000 & \$ 30,000 \
\hline \text { Case 2 } & \$ 161,500 & \$ 85,000 \
\hline \text { Case 3 } & \$ 45,000 & \$ 53,000 \
\hline \text { Case 4 } & \$ 132,000 & \$ 127,000 \
\hline \text { Case 5 } & \$ 99,000 & \$ 110,000 \
\hline
\end{array}$$

Accepted Answer

Case 1: 2.5
Case 2.1

Question 8

When expenses exceed revenues,there is a net loss and the Income Summary account would have a credit balance.

Accepted Answer

A) True 
 B)False

Question 9

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 10

On January 1,Able Company purchased equipment costing $195,000 with an estimated salvage value of $15,000,and an estimated useful life of eight years.What is the amount that should be recorded as depreciation on December 31?

Accepted Answer

A) $22,900 
B) $26,250 
C) $22,500 
D) $195,000 
E) $180,000 
A) $22,900 
B) $26,250 
C) $22,500 
D) $195,000 
E) $180,000

Question 11

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Accepted Answer

\[\begin{array} { | l | l | r

Question 12

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 13

The length of time covered by a set of periodic financial statements is referred to as the:

Accepted Answer

A) Fiscal cycle 
B) Natural business year 
C) Accounting period 
D) Business cycle 
E) Operating cycle 
A) Fiscal cycle 
B) Natural business year 
C) Accounting period 
D) Business cycle 
E) Operating cycle

Question 14

The accrual basis of accounting is a system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.

Accepted Answer

A) True 
 B)False

Question 15

Western Company had $500 of store supplies available at the beginning of the current year.During the year Western Company purchased $2,750 worth of store supplies.On December 31 of this year $375 worth of store supplies remained.
a. Calculate the amount of Western Company's store supplies expense for the current year. (Show your calculations.)
b. Prepare the journal entry to adjust the supplies account.

Accepted Answer

None

Question 16

The adjusted trial balance of E.Pace,Consultant is entered on the partial work sheet below.Complete the worksheet using the following information:
a. Salaries earned by employees that are unpaid and unrecorded, $500.
b. An inventory of supplies showed $800 of unused supplies still on hand.
c. Depreciation on equipment, $1,300.

Accepted Answer

The answer of The adjusted trial balance of E.Pace,Consultant is...

Question 17

A company has 20 employees who each earn $500 per week for a 5-day week that begins on Monday.December 31 of 2011 is a Monday and all 20 employees worked that day.
a. Prepare the required adjusting journal entry to record accrued salaries on December 31,
2011.
b. Prepare the journal entry to record the payment of salaries on January 4, 2012.

Accepted Answer

a.
 \[\begin{array} { | c | c | c | c |

Question 18

Failure to record depreciation expense will overstate the asset and understate the expense.

Accepted Answer

A) True 
 B)False

Question 19

What is the purpose of closing entries? Describe the closing process.

Accepted Answer

The purpose of closing entries is to tra

Question 20

Based on the following information,what would be the total on the Credit side of a post closing trial balance,assuming all accounts have a normal balance?
$\begin{array}{lrlr}
\text { Cash } & \$ 6,754 & \text { Dividends } & \$ 2,000 \
\text { Accounts receivable } & 13,733 & \text { Consulting fees earned } & 13,71 \
\text { Office supplies } & 2,625 & \text { Rent expense } & 3,67 \
\text { Land } & 37,153 & \text { Salaries expense } & 6,64 \
\text { Office equipment } & 14,535 & \text { Telephone expense } & 560 \
\text { Accounts payable } & 6,463 & \text { Miscellaneous expense } & 280 \
\text { Common stock } & 54,490 & \text { Retained Earnings } & ?
\end{array}$

Accepted Answer

A) $61,516 
B) $74,671 
C) $74,800 
D) $87,955 
E) $81,263 
A) $61,516 
B) $74,671 
C) $74,800 
D) $87,955 
E) $81,263

Which of the following is the usual final step in the accounting cycle?

The Income Summary account is used to close the permanent accounts at the end of an accounting period.

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2011 for Apricot would include:

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day to day operations of the business:

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.

An adjusting entry was made on December 31,2011 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2012 in the amount of $3,000?

Calculate the current ratio in each of the following separate cases. Curent Assets Curent Liabilities Case1 \ 75,000 \ 30,000 Case 2 \ 161,500 \ 85,000 Case 3 \ 45,000 \ 53,000 Case 4 \ 132,000 \ 127,000 Case 5 \ 99,000 \ 110,000

When expenses exceed revenues,there is a net loss and the Income Summary account would have a credit balance.

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:

On January 1,Able Company purchased equipment costing $195,000 with an estimated salvage value of $15,000,and an estimated useful life of eight years.What is the amount that should be recorded as depreciation on December 31?

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

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

The length of time covered by a set of periodic financial statements is referred to as the:

The accrual basis of accounting is a system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.

Failure to record depreciation expense will overstate the asset and understate the expense.

What is the purpose of closing entries? Describe the closing process.

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

Which of the following is the usual final step in the accounting cycle?

The Income Summary account is used to close the permanent accounts at the end of an accounting period.

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2011 for Apricot would include:

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day to day operations of the business:

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.

An adjusting entry was made on December 31,2011 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2012 in the amount of $3,000?

Calculate the current ratio in each of the following separate cases. Curent Assets Curent Liabilities Case1 \ 75,000 \ 30,000 Case 2 \ 161,500 \ 85,000 Case 3 \ 45,000 \ 53,000 Case 4 \ 132,000 \ 127,000 Case 5 \ 99,000 \ 110,000

When expenses exceed revenues,there is a net loss and the Income Summary account would have a credit balance.

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:

On January 1,Able Company purchased equipment costing $195,000 with an estimated salvage value of $15,000,and an estimated useful life of eight years.What is the amount that should be recorded as depreciation on December 31?

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

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

The length of time covered by a set of periodic financial statements is referred to as the:

The accrual basis of accounting is a system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.

Failure to record depreciation expense will overstate the asset and understate the expense.

What is the purpose of closing entries? Describe the closing process.

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