Question 1

Under accrual accounting,revenues and expenses should be recorded in the same period to which they relate.

Accepted Answer

A) True 
 B)False

Question 2

A company pays $360 for a yearly trade magazine on August 1.The adjusting entry on December 31 is debit Unearned Subscription Revenue,$150 and credit Subscription Revenue,$150.

Accepted Answer

A) True 
 B)False

Question 3

A company realizes that the last two day's revenue for the month was billed but not recorded.The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.

Accepted Answer

A) True 
 B)False

Question 4

The supplies account has a balance of $2,100 at the beginning of the year and was debited during the year for $2,300,representing the total of supplies purchased during the year.If $400 of supplies are on hand at the end of the year,the supplies expense to be reported on the income statement for the year is

Accepted Answer

A) $400 
B) $200 
C) $4,800 
D) $4,000 
A) $400 
B) $200 
C) $4,800 
D) $4,000

Question 5

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

Accepted Answer

A) Record payment of fees earned. 
B) Record fees earned at the end of the month. 
C) Record fees that have not been earned at the end of the month. 
D) Record the payment of fees to be earned. 
A) Record payment of fees earned. 
B) Record fees earned at the end of the month. 
C) Record fees that have not been earned at the end of the month. 
D) Record the payment of fees to be earned.

Question 6

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as a(n)

Accepted Answer

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

Question 7

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 totals 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 8

Requirement: Make the journal entries for both of the following:
(a)On December 1,$18,000 was received for a service contract to be performed from December 1 through until April 30.
(b)If the service work for this contract is performed evenly and on a regular basis throughout this period,prepare the adjusting journal entry as of year-end,December 31.

Accepted Answer

The answer of Requirement: Make the journal entries for both...

Question 9

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

Question 10

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

Accepted Answer

A) records revenues when they are earned and expenses when they are paid 
B) records revenues and expenses when they are incurred. 
C) records revenues when cash is received and expenses when they are incurred. 
D) records revenues and expenses when the company needs to apply for a loan. 
A) records revenues when they are earned and expenses when they are paid 
B) records revenues and expenses when they are incurred. 
C) records revenues when cash is received and expenses when they are incurred. 
D) records revenues and expenses when the company needs to apply for a loan.

Question 11

The type of account and normal balance of Accumulated Depreciation is

Accepted Answer

A) asset,credit 
B) asset,debit 
C) contra asset,credit 
D) contra asset,debit 
A) asset,credit 
B) asset,debit 
C) contra asset,credit 
D) contra asset,debit

Question 12

Generally accepted accounting principles require the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 13

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 the year's...

Question 14

Adjusting entries affect at least one

Accepted Answer

A) income statement account and one balance sheet account 
B) revenue and the dividends account 
C) asset and one stockholders' equity account 
D) revenue and one capital stock account 
A) income statement account and one balance sheet account 
B) revenue and the dividends account 
C) asset and one stockholders' equity account 
D) revenue and one capital stock account

Question 15

The general term employed to indicate an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Accepted Answer

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

Question 16

Deferred expenses have

Accepted Answer

A) not yet been recorded as expenses or paid 
B) been recorded as expenses and paid 
C) been incurred and paid 
D) not yet been recorded as expenses 
A) not yet been recorded as expenses or paid 
B) been recorded as expenses and paid 
C) been incurred and paid 
D) not yet been recorded as expenses

Question 17

The net income reported on the income statement is $58,000.However,adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Accepted Answer

A) $56,700 
B) $58,000 
C) $55,800 
D) $54,500 
A) $56,700 
B) $58,000 
C) $55,800 
D) $54,500

Question 18

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Accepted Answer

A) True 
 B)False

Question 19

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The last pay day of December is Friday,December 27.Assuming the next pay period begins on Monday,December 30,journalize the adjusting entry necessary at the end of the fiscal period (December 31).

Accepted Answer

$20,000/10

Question 20

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.

Under accrual accounting,revenues and expenses should be recorded in the same period to which they relate.

A company pays $360 for a yearly trade magazine on August 1.The adjusting entry on December 31 is debit Unearned Subscription Revenue,$150 and credit Subscription Revenue,$150.

A company realizes that the last two day's revenue for the month was billed but not recorded.The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as a(n)

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 totals to be unequal,indicate whether the debit or credit total is higher and by how much.

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

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

The type of account and normal balance of Accumulated Depreciation is

Generally accepted accounting principles require the accrual basis of accounting.

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.

Adjusting entries affect at least one

The general term employed to indicate an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Deferred expenses have

The net income reported on the income statement is $58,000.However,adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Which of the following is an example of accrued revenue?

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

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Exam 3: The Adjusting Process

Under accrual accounting,revenues and expenses should be recorded in the same period to which they relate.

A company pays $360 for a yearly trade magazine on August 1.The adjusting entry on December 31 is debit Unearned Subscription Revenue,$150 and credit Subscription Revenue,$150.

A company realizes that the last two day's revenue for the month was billed but not recorded.The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as a(n)

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 totals to be unequal,indicate whether the debit or credit total is higher and by how much.

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

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

The type of account and normal balance of Accumulated Depreciation is

Generally accepted accounting principles require the accrual basis of accounting.

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.

Adjusting entries affect at least one

The general term employed to indicate an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Deferred expenses have

The net income reported on the income statement is $58,000.However,adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Which of the following is an example of accrued revenue?

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

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