Question 1

Adjusting entries affect at least one

Accepted Answer

A)  income statement account and one balance sheet account 
B)  revenue and the drawing account 
C)  asset and one owner's equity account 
D)  revenue and one capital account 
A)  income statement account and one balance sheet account 
B)  revenue and the drawing account 
C)  asset and one owner's equity account 
D)  revenue and one capital account

Question 2

One of the accounting concepts upon which deferrals and accruals are based is

Accepted Answer

A)  matching 
B)  cost 
C)  price-level adjustment 
D)  conservatism 
A)  matching 
B)  cost 
C)  price-level adjustment 
D)  conservatism

Question 3

On December 31, the balance in the Office Supplies account is $1,385. A count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Accepted Answer

$1,385 - $

Question 4

Depreciation Expense and Accumulated Depreciation are classified, respectively, as

Accepted Answer

A)  expense, contra asset 
B)  asset, contra liability 
C)  revenue, asset 
D)  contra asset, expense 
A)  expense, contra asset 
B)  asset, contra liability 
C)  revenue, asset 
D)  contra asset, expense

Question 5

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 6

Adjusting entries affect only expense and asset accounts.

Accepted Answer

A) True 
 B)False

Question 7

Ski Master Company pays weekly salaries of $18,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 8

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Accepted Answer

A)  depreciation 
B)  deferral 
C)  accrual 
D)  inventory 
A)  depreciation 
B)  deferral 
C)  accrual 
D)  inventory

Question 9

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

Accepted Answer

A)  expenses understated and therefore net income overstated 
B)  revenues understated and therefore net income understated 
C)  expenses understated and therefore net income understated 
D)  expenses overstated and therefore net income understated 
A)  expenses understated and therefore net income overstated 
B)  revenues understated and therefore net income understated 
C)  expenses understated and therefore net income understated 
D)  expenses overstated and therefore net income understated

Question 10

The unexpired insurance at the end of the fiscal period represents

Accepted Answer

A)  an accrued asset 
B)  an accrued liability 
C)  an accrued expense 
D)  a deferred expense 
A)  an accrued asset 
B)  an accrued liability 
C)  an accrued expense 
D)  a deferred expense

Question 11

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the 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 12

Depreciation on equipment for the year is $6,300.
(a) Record the journal entry if the company adjusts its account once a year.
(b) Record the journal entry if the company adjusts its account on a monthly basis.

Accepted Answer

(a)
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Question 13

A company pays $6,500 for two season tickets on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is debit Cash, $2,500 and credit Ticket Revenue, $2,500.

Accepted Answer

A) True 
 B)False

Question 14

Complete the missing items in the following chart:

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 15

At year-end, the balance in the prepaid insurance account, prior to any adjustments, is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Accepted Answer

A) True 
 B)False

Question 16

The revenue recognition concept

Accepted Answer

A)  is not in conflict with the cash method of accounting 
B)  determines when revenue is credited to a revenue account 
C)  states that revenue is not recorded until the cash is received 
D)  controls all revenue reporting for the cash basis of accounting 
A)  is not in conflict with the cash method of accounting 
B)  determines when revenue is credited to a revenue account 
C)  states that revenue is not recorded until the cash is received 
D)  controls all revenue reporting for the cash basis of accounting

Question 17

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 18

When preparing an income statement vertical analysis, each revenue and expense is expressed as a percent of net income.

Accepted Answer

A) True 
 B)False

Question 19

Revenues and expenses should be recorded in the same period to which they relate.

Accepted Answer

A) True 
 B)False

Question 20

Adjusting entries always include

Accepted Answer

A)  only income statement accounts. 
B)  only balance sheet accounts. 
C)  the cash account. 
D)  at least one income statement account and one balance sheet account. 
A)  only income statement accounts. 
B)  only balance sheet accounts. 
C)  the cash account. 
D)  at least one income statement account and one balance sheet account.

Adjusting entries affect at least one

One of the accounting concepts upon which deferrals and accruals are based is

On December 31, the balance in the Office Supplies account is $1,385. A count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Depreciation Expense and Accumulated Depreciation are classified, respectively, as

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

Adjusting entries affect only expense and asset accounts.

Ski Master Company pays weekly salaries of $18,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday.

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

The unexpired insurance at the end of the fiscal period represents

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

Depreciation on equipment for the year is $6,300. (a) Record the journal entry if the company adjusts its account once a year. (b) Record the journal entry if the company adjusts its account on a monthly basis.

A company pays $6,500 for two season tickets on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is debit Cash, $2,500 and credit Ticket Revenue, $2,500.

Complete the missing items in the following chart:

At year-end, the balance in the prepaid insurance account, prior to any adjustments, is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

The revenue recognition concept

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

When preparing an income statement vertical analysis, each revenue and expense is expressed as a percent of net income.

Revenues and expenses should be recorded in the same period to which they relate.

Adjusting entries always include

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

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

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Exam 3: The Adjusting Process

Adjusting entries affect at least one

One of the accounting concepts upon which deferrals and accruals are based is

On December 31, the balance in the Office Supplies account is $1,385. A count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Depreciation Expense and Accumulated Depreciation are classified, respectively, as

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

Adjusting entries affect only expense and asset accounts.

Ski Master Company pays weekly salaries of $18,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday.

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

The unexpired insurance at the end of the fiscal period represents

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

Depreciation on equipment for the year is $6,300. (a) Record the journal entry if the company adjusts its account once a year. (b) Record the journal entry if the company adjusts its account on a monthly basis.

A company pays $6,500 for two season tickets on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is debit Cash, $2,500 and credit Ticket Revenue, $2,500.

Complete the missing items in the following chart:

At year-end, the balance in the prepaid insurance account, prior to any adjustments, is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

The revenue recognition concept

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

When preparing an income statement vertical analysis, each revenue and expense is expressed as a percent of net income.

Revenues and expenses should be recorded in the same period to which they relate.

Adjusting entries always include

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

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

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