Question 1

If the debit portion of an adjusting entry is to an asset account,then the credit portion must be to a liability account.

Accepted Answer

A) True 
 B)False  False

Question 2

Accumulated depreciation accounts are liability accounts.

Accepted Answer

A) True 
 B)False  False

Question 3

Accrued revenues would affect _______ on the balance sheet.

Accepted Answer

A) assets 
B) liabilities 
C) owner's capital 
D) prepaid expenses 
A) assets 
B) liabilities 
C) owner's capital 
D) prepaid expenses A

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A fixed asset's market value is reflected on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-No adjustment was made for supplies used up during the month.

Accepted Answer

A) Assets and owner's equity overstated 
B) Assets and owner's equity understated 
C) Assets overstated and owner's equity understated 
D) Assets understated and owner's equity overstated 
E) Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated 
A) Assets and owner's equity overstated 
B) Assets and owner's equity understated 
C) Assets overstated and owner's equity understated 
D) Assets understated and owner's equity overstated 
E) Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Question 7

Which of the following is an example of accrued revenue?

Accepted Answer

A) snow removal services that have been paid for three months in advance 
B) snow removal services that have been provided but have not been billed or paid 
C) an agreement that has been signed for snow removal services for the next three months 
D) snow removal services that have been provided and paid on the same day 
A) snow removal services that have been paid for three months in advance 
B) snow removal services that have been provided but have not been billed or paid 
C) an agreement that has been signed for snow removal services for the next three months 
D) snow removal services that have been provided and paid on the same day

Question 8

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 9

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Depreciation on equipment was not recorded.

Accepted Answer

A) Assets and owner's equity overstated 
B) Assets and owner's equity understated 
C) Assets overstated and owner's equity understated 
D) Assets understated and owner's equity overstated 
E) Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated 
A) Assets and owner's equity overstated 
B) Assets and owner's equity understated 
C) Assets overstated and owner's equity understated 
D) Assets understated and owner's equity overstated 
E) Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Question 10

Depreciation Expense is reported on the balance sheet as an addition to the related asset.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Gracie Company made a prepaid rent payment of $2,800 on January 1.The company's monthly rent is $700.The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Accepted Answer

A) $2,100 
B) $700 
C) $2,800 
D) $1,400 
A) $2,100 
B) $700 
C) $2,800 
D) $1,400

Question 13

For the year ending December 31,Beard Clinical Supplies Co.mistakenly omitted adjusting entries for 
(1)$9,800 of unearned revenue that was earned,
(2)earned revenue that was not billed of $10,200,and 
(3)accrued wages of $7,000.Indicate the combined effect of the errors on 
(a)revenues,
(b)expenses,and 
(c)net income.

Accepted Answer

(a) Revenues were understated

Question 14

Which of the following is considered to be an accrued expense?

Accepted Answer

A) A computer technician installed the latest software updates and was paid on the same day. 
B) A computer technician has been paid in advance to install software updates as they become available. 
C) A computer technician has just signed an agreement with you regarding pricing for future work. 
D) A computer technician has installed the latest software updates, but you have not received an invoice or made payment. 
A) A computer technician installed the latest software updates and was paid on the same day. 
B) A computer technician has been paid in advance to install software updates as they become available. 
C) A computer technician has just signed an agreement with you regarding pricing for future work. 
D) A computer technician has installed the latest software updates, but you have not received an invoice or made payment.

Question 15

Accumulated depreciation is reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 16

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Accepted Answer

A) Fees Earned 
B) Accounts Receivable 
C) Unearned Fees 
D) Depreciation Expense 
A) Fees Earned 
B) Accounts Receivable 
C) Unearned Fees 
D) Depreciation Expense

Question 17

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 18

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

Accepted Answer

A) True 
 B)False

Question 19

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded.

Accepted Answer

A) True 
 B)False

Question 20

For the year ending December 31,Orion,Inc.mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2)unearned revenue of $4,200 that was earned,and
(3)insurance of $5,000 that expired.For the year ending December 31,what is the effect of these errors on revenues,expenses,and net income?

Accepted Answer

A) Revenues are overstated by $4,200. 
B) Net income is overstated by $2,300. 
C) Expenses are overstated by $6,500. 
D) Expenses are understated by $3,500. 
A) Revenues are overstated by $4,200. 
B) Net income is overstated by $2,300. 
C) Expenses are overstated by $6,500. 
D) Expenses are understated by $3,500.

If the debit portion of an adjusting entry is to an asset account,then the credit portion must be to a liability account.

Accumulated depreciation accounts are liability accounts.

Accrued revenues would affect _______ on the balance sheet.

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

A fixed asset's market value is reflected on the balance sheet.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -No adjustment was made for supplies used up during the month.

Which of the following is an example of accrued revenue?

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.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Depreciation on equipment was not recorded.

Depreciation Expense is reported on the balance sheet as an addition to the related asset.

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

Gracie Company made a prepaid rent payment of $2,800 on January 1.The company's monthly rent is $700.The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Which of the following is considered to be an accrued expense?

Accumulated depreciation is reported on the income statement.

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

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

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded.

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 3: The Adjusting Process

If the debit portion of an adjusting entry is to an asset account,then the credit portion must be to a liability account.

Accumulated depreciation accounts are liability accounts.

Accrued revenues would affect _______ on the balance sheet.

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

A fixed asset's market value is reflected on the balance sheet.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -No adjustment was made for supplies used up during the month.

Which of the following is an example of accrued revenue?

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.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Depreciation on equipment was not recorded.

Depreciation Expense is reported on the balance sheet as an addition to the related asset.

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

Gracie Company made a prepaid rent payment of $2,800 on January 1.The company's monthly rent is $700.The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Which of the following is considered to be an accrued expense?

Accumulated depreciation is reported on the income statement.

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

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

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded.

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters