Exam 4: Adjustments,financial Statements,and the Quality of Earnings

Which of the following applies to both the depreciation expense account and the accumulated depreciation account at the end of the first year of operations?

On January 1,20A,Wilkins Company purchased a delivery truck that cost $20,000.Cash of $15,000 was paid,and the balance of $5,000 was payable on January 31,20A.The truck has an estimated useful life of four years and no residual value.The company uses the straight-line method for amortizing all trucks.Considering only these facts,amortization expense (on the truck)for 20A,would be which of the following?

Which of the following accounts would most likely lead to a deferred adjustment?

At the beginning of 20B,Down Company had office supplies inventory of $400.During 20B,the company purchased office supplies amounting to $2,500 (paid for in cash and debited to office supplies inventory).At December 31,20B (end of the accounting year),a count of office supplies on hand reflected $300.Therefore,the adjusting entry should include which of the following?

The primary purpose of a trial balance is to determine the equality of debits and credits in the ledger accounts (or T-accounts).

Which of the following would most likely lead to an accrued adjustment?

Failure to make an adjusting entry to recognize accrued salaries payable would cause which of the following?

Which one of the following accounts would not be closed at the end of the accounting year?

Atlantic Company is completing the information processing cycle at the end of the annual accounting period,December 31,20A.Four adjusting entries must be made at this date to update the accounts.The following accounts,selected from Atlantic's chart of accounts,are to be used for this purpose.They are coded to the left for easy reference. You are to indicate the appropriate account code and amount for each required adjusting entry at December 31,19A

On January 1,20B,the ledger of Global Corporation correctly showed supplies inventory of $500.During 20B,supplies purchases amounted to $700.A count (inventory)of supplies on hand at December 31,20B,showed $400.The 20B income statement should report supplies expense amounting to which of the following?

Assume Minor Company recorded the following adjusting entry at year-end: If the beginning balance in prepaid insurance was $700 and $1,500 was paid for an insurance premium during the year,the ending balance in the prepaid insurance account (after the above adjusting entry)would be which of the following?

The three sections of the statement of cash flows are operating,investing,and financing activities.

The statement of cash flows does which of the following?

A calendar year reporting company preparing its annual financial statements should use the phrase "At December 31,20XX" in the heading of which of the following?

The process that begins with analyzing transactions and ends with the preparation of a post-closing trial balance is called

The beginning and ending retained earnings balances for the accounting period will appear on the statement of financial position.

To close temporary accounts,credit each revenue and gain account,debit each expense and loss account,and record the difference to Retained Earnings.

Earnings per share (EPS)amounts must be reported on the statement of financial position of corporations.

At December 31,20A,the following adjusting entries were recorded in the accounts of ABC Company: There were no other accrued receivables or payables on ABC's books in 20A. The balances in the following accounts immediately after the closing entries were posted would be:

The basic financial statements prepared for external users do not include which of the following?