Question 1

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

Accepted Answer

A) increase income 
B) decrease net income 
C) decrease expenses 
D) increase assets 
A) increase income 
B) decrease net income 
C) decrease expenses 
D) increase assets

Question 2

Which of the accounting steps in the accounting process below would be completed last?

Accepted Answer

A) preparing the adjusted trial balance 
B) posting 
C) preparing the financial statements 
D) journalizing 
A) preparing the adjusted trial balance 
B) posting 
C) preparing the financial statements 
D) journalizing

Question 3

Proper reporting of revenues and expenses in a period is due to the accounting period concept.

Accepted Answer

A) True 
 B)False

Question 4

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,$3,700...

Question 5

By ignoring and not posting the adjusting journal entries to the appropriate accounts,net income will always be overstated.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Salaries of $6,400 are paid for a five-day week on Friday.Prepare the adjusting journal entry that is required if the month ends on Thursday.

Accepted Answer

The answer of Salaries of $6,400 are paid for a...

Question 8

What is the purpose of an adjusted trial balance? What types of errors does it detect? What types of errors does it not detect?

Accepted Answer

The purpose of an adjusted trial balance

Question 9

The matching concept

Accepted Answer

A) addresses the relationship between the journal and the balance sheet 
B) determines whether the normal balance of an account is a debit or credit 
C) requires that the dollar amount of debits equal the dollar amount of credits on a trial balance 
D) states that expenses related to revenue be reported at the same time the revenue is reported 
A) addresses the relationship between the journal and the balance sheet 
B) determines whether the normal balance of an account is a debit or credit 
C) requires that the dollar amount of debits equal the dollar amount of credits on a trial balance 
D) states that expenses related to revenue be reported at the same time the revenue is reported

Question 10

The company determines that the interest expense on a note payable for period ending December 31st is $775.This amount is payable on January 1st.Prepare the journal entries required on December 31st and January 1st.

Accepted Answer

The answer of The company determines that the interest expense...

Question 11

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.

Question 12

The balance in the prepaid rent account before adjustment at the end of the year is $32,000,which represents four months' rent paid on December 1.The adjusting entry required on December 31 is

Accepted Answer

A) debit Rent Expense,$8,000;credit Prepaid Rent,$8,000 
B) debit Prepaid Rent,$24,000;credit Rent Expense,$8,000 
C) debit Rent Expense,$24,000;credit Prepaid Rent,$8,000 
D) debit Prepaid Rent,$8,000;credit Rent Expense,$8,000 
A) debit Rent Expense,$8,000;credit Prepaid Rent,$8,000 
B) debit Prepaid Rent,$24,000;credit Rent Expense,$8,000 
C) debit Rent Expense,$24,000;credit Prepaid Rent,$8,000 
D) debit Prepaid Rent,$8,000;credit Rent Expense,$8,000

Question 13

Depreciation on Office Equipment is $3,300.The adjusting entry on December 31,2011 would be

Accepted Answer

The answer of Depreciation on Office Equipment is $3,300.The adjusting...

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Accepted Answer

A) True 
 B)False

Question 16

Using accrual accounting,revenue is recorded and reported only

Accepted Answer

A) when cash is received without regard to when the services are rendered 
B) when the services are rendered without regard to when cash is received 
C) when cash is received at the time services are rendered 
D) if cash is received after the services are rendered 
A) when cash is received without regard to when the services are rendered 
B) when the services are rendered without regard to when cash is received 
C) when cash is received at the time services are rendered 
D) if cash is received after the services are rendered

Question 17

Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account,which of the following describes the effect of the debit portion of the entry?

Accepted Answer

A) increases the balance of a contra asset account 
B) increases the balance of an asset account 
C) decreases the balance of a stockholders' equity account 
D) increases the balance of an expense account 
A) increases the balance of a contra asset account 
B) increases the balance of an asset account 
C) decreases the balance of a stockholders' equity account 
D) increases the balance of an expense account

Question 19

Prior to the adjusting process,accrued expenses have

Accepted Answer

A) not yet been incurred,paid,or recorded 
B) been incurred,not paid,but have been recorded 
C) been incurred,not paid,and not recorded 
D) been paid but have not yet been incurred 
A) not yet been incurred,paid,or recorded 
B) been incurred,not paid,but have been recorded 
C) been incurred,not paid,and not recorded 
D) been paid but have not yet been incurred

Question 20

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 and the proper adjusting entry is journalized at the end of the fiscal period (December 31).The entry for the payment of the payroll on Friday,January 10 includes a:

Accepted Answer

A) debit to Salary Expense of $16,000 
B) debit to Salary Expense of $4,000 
C) credit to Salary Payable of $16,000 
D) credit to Salary Payable of $4,000 
A) debit to Salary Expense of $16,000 
B) debit to Salary Expense of $4,000 
C) credit to Salary Payable of $16,000 
D) credit to Salary Payable of $4,000

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

Which of the accounting steps in the accounting process below would be completed last?

Proper reporting of revenues and expenses in a period is due to the accounting period concept.

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.

By ignoring and not posting the adjusting journal entries to the appropriate accounts,net income will always be overstated.

The unexpired insurance at the end of the fiscal period represents

Salaries of $6,400 are paid for a five-day week on Friday.Prepare the adjusting journal entry that is required if the month ends on Thursday.

What is the purpose of an adjusted trial balance? What types of errors does it detect? What types of errors does it not detect?

The matching concept

The company determines that the interest expense on a note payable for period ending December 31st is $775.This amount is payable on January 1st.Prepare the journal entries required on December 31st and January 1st.

The balance in the prepaid rent account before adjustment at the end of the year is $32,000,which represents four months' rent paid on December 1.The adjusting entry required on December 31 is

Depreciation on Office Equipment is $3,300.The adjusting entry on December 31,2011 would be

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

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Using accrual accounting,revenue is recorded and reported only

Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account,which of the following describes the effect of the debit portion of the entry?

Prior to the adjusting process,accrued expenses have

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

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

Which of the accounting steps in the accounting process below would be completed last?

Proper reporting of revenues and expenses in a period is due to the accounting period concept.

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.

By ignoring and not posting the adjusting journal entries to the appropriate accounts,net income will always be overstated.

The unexpired insurance at the end of the fiscal period represents

Salaries of $6,400 are paid for a five-day week on Friday.Prepare the adjusting journal entry that is required if the month ends on Thursday.

What is the purpose of an adjusted trial balance? What types of errors does it detect? What types of errors does it not detect?

The matching concept

The company determines that the interest expense on a note payable for period ending December 31st is $775.This amount is payable on January 1st.Prepare the journal entries required on December 31st and January 1st.

The balance in the prepaid rent account before adjustment at the end of the year is $32,000,which represents four months' rent paid on December 1.The adjusting entry required on December 31 is

Depreciation on Office Equipment is $3,300.The adjusting entry on December 31,2011 would be

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

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Using accrual accounting,revenue is recorded and reported only

Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account,which of the following describes the effect of the debit portion of the entry?

Prior to the adjusting process,accrued expenses have

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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