Question 1

For each of the following, journalize the necessary adjusting entry:

Accepted Answer

The answer of For each of the following, journalize the...

Question 2

Revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Accepted Answer

A) True 
 B)False

Question 3

List the four basic types of accounts that require adjusting entries and give an example of each.

Accepted Answer

1. Prepaid expenses - Example: Prepaid i

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Accepted Answer

A) True 
 B)False

Question 6

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a:

Accepted Answer

A)  debit to Salary Expense of $8,000. 
B)  debit to Salary Payable of $8,000 
C)  credit to Salary Expense of $16,000 
D)  credit to Salary Payable of $16,000 
A)  debit to Salary Expense of $8,000. 
B)  debit to Salary Payable of $8,000 
C)  credit to Salary Expense of $16,000 
D)  credit to Salary Payable of $16,000

Question 7

Which of the following is considered to be unearned revenue?

Accepted Answer

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

Question 8

Complete the missing items in the following chart:

Accepted Answer

The answer of Complete the missing items in the following...

Question 9

A company purchases a one-year insurance policy on June 1 for $2,760. The adjusting entry on December 31 is

Accepted Answer

A)  debit Insurance Expense, $1,380 and credit Prepaid Insurance, $1,380. 
B)  debit Insurance Expense, $1,150 and credit Prepaid Insurance, $1,150. 
C)  debit Insurance Expense, $1,610, and credit Prepaid Insurance, $1,610. 
D)  debit Prepaid Insurance, $1,380, and credit Cash, $1,380. 
A)  debit Insurance Expense, $1,380 and credit Prepaid Insurance, $1,380. 
B)  debit Insurance Expense, $1,150 and credit Prepaid Insurance, $1,150. 
C)  debit Insurance Expense, $1,610, and credit Prepaid Insurance, $1,610. 
D)  debit Prepaid Insurance, $1,380, and credit Cash, $1,380.

Question 10

Which of the following is an example of accrued revenue?

Accepted Answer

A)  Swimming pool cleaning that has been paid for three months in advance. 
B)  Swimming pool cleaning that has been provided but has not been billed or paid. 
C)  An agreement has been signed for swimming pool cleaning for the next three months. 
D)  Swimming pool cleaning that has been provided and paid on the same day. 
A)  Swimming pool cleaning that has been paid for three months in advance. 
B)  Swimming pool cleaning that has been provided but has not been billed or paid. 
C)  An agreement has been signed for swimming pool cleaning for the next three months. 
D)  Swimming pool cleaning that has been provided and paid on the same day.

Question 11

The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 12

The account type and normal balance of Prepaid Expense is

Accepted Answer

A)  revenue, credit 
B)  expense, debit 
C)  liability, credit 
D)  asset, debit 
A)  revenue, credit 
B)  expense, debit 
C)  liability, credit 
D)  asset, debit

Question 13

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 Retained Earnings; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Retained Earnings 
A)  debit Supplies Expense; credit Supplies 
B)  debit Retained Earnings; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Retained Earnings

Question 14

At the end of the current year, $3,700 fees have been earned but have not been billed to clients. Journalize the adjusting entry to record the accrued fees.

Accepted Answer

The answer of At the end of the current year,...

Question 15

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

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

On January 1st, Power House Co. prepays the year's rent, $10,140 to its landlord. Prepare the journal entry by recording the prepayment to an asset account.

Accepted Answer

The answer of On January 1st, Power House Co. prepays...

Question 18

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).

Accepted Answer

The answer of Journalize the six entries to adjust the...

Question 19

Explain the difference between accrual-basis accounting and cash-basis accounting.

Accepted Answer

Accrual-basis accounting reports revenue

Question 20

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

Accepted Answer

$4,200/12

Exam 3: The Adjusting Process

For each of the following, journalize the necessary adjusting entry:

Revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

List the four basic types of accounts that require adjusting entries and give an example of each.

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

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a:

Which of the following is considered to be unearned revenue?

Complete the missing items in the following chart:

A company purchases a one-year insurance policy on June 1 for $2,760. The adjusting entry on December 31 is

Which of the following is an example of accrued revenue?

The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.

The account type and normal balance of Prepaid Expense is

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

At the end of the current year, $3,700 fees have been earned but have not been billed to clients. Journalize the adjusting entry to record the accrued fees.

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

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

On January 1st, Power House Co. prepays the year's rent, $10,140 to its landlord. Prepare the journal entry by recording the prepayment to an asset account.

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).

Explain the difference between accrual-basis accounting and cash-basis accounting.

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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