Question 1

Which of the following accounts could decrease as a result of adjusting entries?

Accepted Answer

A) Prepaid Insurance. 
B) Accumulated Depreciation-Buildings. 
C) Rent Expense. 
D) Service Revenue. 
A) Prepaid Insurance. 
B) Accumulated Depreciation-Buildings. 
C) Rent Expense. 
D) Service Revenue. A

Question 2

Net income results when expenses exceed revenues.

Accepted Answer

A) True 
 B)False  False

Question 3

A company recorded office supplies in an asset account when the supplies were purchased.Failure to take inventory and make an adjusting entry will result in an

Accepted Answer

A) understatement of liabilities. 
B) understatement of owner's equity. 
C) understatement of assets. 
D) overstatement of owner's equity. 
A) understatement of liabilities. 
B) understatement of owner's equity. 
C) understatement of assets. 
D) overstatement of owner's equity. D

Question 4

Office Supplies was $1,800 at the end of January and $2,280 at the end of February.During February,Office Supplies Expense equaled $560.How much cash was paid for office supplies during February?

Accepted Answer

A) $440 
B) $2,840 
C) $3,440 
D) $1,040 
A) $440 
B) $2,840 
C) $3,440 
D) $1,040

Question 5

The following amounts are taken from the balance sheets of Candy Cane Enterprises:
 
During 20x5,expenses related to prepaid expenses were $206,000,and expenses related to accrued liabilities were $394,000.Determine the amount of cash payments related to prepaid expenses and to accrued liabilities for 20x5.

Accepted Answer

The answer of The following amounts are taken from the...

Question 6

Net income results in a(n)

Accepted Answer

A) increase in owner's equity. 
B) increase in revenues. 
C) decrease in expenses. 
D) increase in assets. 
A) increase in owner's equity. 
B) increase in revenues. 
C) decrease in expenses. 
D) increase in assets.

Question 7

An adjusting entry includes at least one balance sheet account and at least one income statement account.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an example of a deferral?

Accepted Answer

A) Debit Salaries Expense,credit Salaries Payable 
B) Debit Accounts Receivable,credit Service Revenue 
C) Debit Property Taxes Expense,credit Property Taxes Payable 
D) Debit Insurance Expense,credit Prepaid Insurance 
A) Debit Salaries Expense,credit Salaries Payable 
B) Debit Accounts Receivable,credit Service Revenue 
C) Debit Property Taxes Expense,credit Property Taxes Payable 
D) Debit Insurance Expense,credit Prepaid Insurance

Question 9

What is the adjusting entry for that portion of revenue received in advance which has now been earned?

Accepted Answer

A) Unearned Revenue - Debit;Cash - Credit 
B) Unearned Revenue - Debit;Service Revenue - Credit 
C) Service Revenue - Debit;Unearned Revenue - Credit 
D) Cash - Debit;Unearned Revenue - Credit 
A) Unearned Revenue - Debit;Cash - Credit 
B) Unearned Revenue - Debit;Service Revenue - Credit 
C) Service Revenue - Debit;Unearned Revenue - Credit 
D) Cash - Debit;Unearned Revenue - Credit

Question 10

In order for revenue to be recognized,the seller's price to the buyer must be fixed or determinable.

Accepted Answer

A) True 
 B)False

Question 11

The heading of an adjusted trial balance might contain the line "For the Month Ended May 31,20xx."

Accepted Answer

A) True 
 B)False

Question 12

The matching rule relates the least to

Accepted Answer

A) income measurement. 
B) the cash basis of accounting. 
C) revenues and expenses. 
D) a direct relationship between expenses and revenues. 
A) income measurement. 
B) the cash basis of accounting. 
C) revenues and expenses. 
D) a direct relationship between expenses and revenues.

Question 13

The following amounts are taken from the balance sheets of Baltic Company:
  During 20x5,expenses related to accrued liabilities were $15,250,and expenses related to prepaid expenses were $10,500.
a.Compute cash payments related to accrued liabilities.
b.Compute cash payments related to prepaid expenses.

Accepted Answer

a.$12,000 ($18,750 +

Question 14

A customer's promise to pay for goods or services

Accepted Answer

A) increases the company's liabilities. 
B) decreases the company's Cash account. 
C) creates a liability for the company. 
D) increases the assets of the company. 
A) increases the company's liabilities. 
B) decreases the company's Cash account. 
C) creates a liability for the company. 
D) increases the assets of the company.

Question 15

Which of the following situations does not involve an accrual?

Accepted Answer

A) Recording accrued interest. 
B) Recording depreciation. 
C) Recording unrecorded wages. 
D) Recording unrecorded revenue. 
A) Recording accrued interest. 
B) Recording depreciation. 
C) Recording unrecorded wages. 
D) Recording unrecorded revenue.

Question 16

Custom Enterprises had supplies on hand costing $3,840 at the beginning of the year and $4,800 at the end of the year.During the year,supplies totaling $7,600 were consumed.How much was the total cost of supplies purchased during the year?

Accepted Answer

($7,600 +

Question 17

Which of the following accounts would appear on an adjusted trial balance but probably would not appear on a trial balance?

Accepted Answer

A) Supplies Expense 
B) Accounts Payable 
C) Service Revenue 
D) Cash 
A) Supplies Expense 
B) Accounts Payable 
C) Service Revenue 
D) Cash

Question 18

An adjusted trial balance is prepared to

Accepted Answer

A) test that the ledger is in balance after the accounts have been adjusted. 
B) facilitate preparation of the adjusting entries. 
C) both test that the ledger is in balance after the accounts have been adjusted and facilitate preparation of the financial statements. 
D) facilitate preparation of the financial statements. 
A) test that the ledger is in balance after the accounts have been adjusted. 
B) facilitate preparation of the adjusting entries. 
C) both test that the ledger is in balance after the accounts have been adjusted and facilitate preparation of the financial statements. 
D) facilitate preparation of the financial statements.

Question 19

What is the purpose of adjusting entries?

Accepted Answer

Adjusting entries result in financial st

Question 20

Which of the following accounts would likely not need to be adjusted at year end?

Accepted Answer

A) Equipment 
B) Prepaid Insurance 
C) Supplies 
D) Owner's Withdrawals 
A) Equipment 
B) Prepaid Insurance 
C) Supplies 
D) Owner's Withdrawals

Exam 3: Adjusting the Accounts

Which of the following accounts could decrease as a result of adjusting entries?

Net income results when expenses exceed revenues.

A company recorded office supplies in an asset account when the supplies were purchased.Failure to take inventory and make an adjusting entry will result in an

Office Supplies was $1,800 at the end of January and $2,280 at the end of February.During February,Office Supplies Expense equaled $560.How much cash was paid for office supplies during February?

Net income results in a(n)

An adjusting entry includes at least one balance sheet account and at least one income statement account.

Which of the following is an example of a deferral?

What is the adjusting entry for that portion of revenue received in advance which has now been earned?

In order for revenue to be recognized,the seller's price to the buyer must be fixed or determinable.

The heading of an adjusted trial balance might contain the line "For the Month Ended May 31,20xx."

The matching rule relates the least to

A customer's promise to pay for goods or services

Which of the following situations does not involve an accrual?

Custom Enterprises had supplies on hand costing $3,840 at the beginning of the year and $4,800 at the end of the year.During the year,supplies totaling $7,600 were consumed.How much was the total cost of supplies purchased during the year?

Which of the following accounts would appear on an adjusted trial balance but probably would not appear on a trial balance?

An adjusted trial balance is prepared to

What is the purpose of adjusting entries?

Which of the following accounts would likely not need to be adjusted at year end?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

Filters