Question 1

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Accepted Answer

A)  historical cost 
B)  contra asset 
C)  book value 
D)  market value 
A)  historical cost 
B)  contra asset 
C)  book value 
D)  market value

Question 2

Indicate whether the following 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 adjustment for accrued fees of $1,17

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

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 5

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

Accepted Answer

The answer of The estimated amount of depreciation on equipment...

Question 6

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

Accepted Answer

A)  increase net income 
B)  increase revenues 
C)  decrease expenses 
D)  decrease net book value 
A)  increase net income 
B)  increase revenues 
C)  decrease expenses 
D)  decrease net book value

Question 7

Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n)

Accepted Answer

A)  asset 
B)  liability 
C)  equity 
D)  revenue 
A)  asset 
B)  liability 
C)  equity 
D)  revenue

Question 8

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 9

The balance in the supplies account, before adjustment at the end of the year is $725. The proper adjusting entry if the amount of supplies on hand at the end of the year is $300 would be

Accepted Answer

A)  debit Supplies, $300; credit Supplies Expense, $300 
B)  debit Supplies Expense, $425; credit Supplies, $425 
C)  debit Supplies Expense, $300; credit Supplies, $300 
D)  debit Supplies, $425; credit Supplies Expense, $425 
A)  debit Supplies, $300; credit Supplies Expense, $300 
B)  debit Supplies Expense, $425; credit Supplies, $425 
C)  debit Supplies Expense, $300; credit Supplies, $300 
D)  debit Supplies, $425; credit Supplies Expense, $425

Question 10

Which of the following is an example of an accrued expense?

Accepted Answer

A)  Salary owed but not yet paid 
B)  Fees received but not yet earned 
C)  Supplies on hand 
D)  A two-year premium paid on a fire insurance policy 
A)  Salary owed but not yet paid 
B)  Fees received but not yet earned 
C)  Supplies on hand 
D)  A two-year premium paid on a fire insurance policy

Question 11

If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)

Accepted Answer

A)  deferral 
B)  accrual 
C)  dividend 
D)  revenue 
A)  deferral 
B)  accrual 
C)  dividend 
D)  revenue

Question 12

Which of the following is not a characteristic of accrual basis of accounting?

Accepted Answer

A)  Revenues and expenses are reported in the period in which cash is received or paid 
B)  Revenues are reported in the income statement in the period in which they are earned 
C)  Supports the matching concept 
D)  All are correct. 
A)  Revenues and expenses are reported in the period in which cash is received or paid 
B)  Revenues are reported in the income statement in the period in which they are earned 
C)  Supports the matching concept 
D)  All are correct.

Question 13

The type of account and normal balance of Unearned Rent is

Accepted Answer

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

Question 14

On April 30, a business estimates depreciation on equipment used during the first year of operations to be $2,900. (a) Journalize the adjusting entry required as of April 30. (b) If the adjusting entry in (a) were omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of April 30?

Accepted Answer

The answer of On April 30, a business estimates depreciation...

Question 15

A fixed asset's market value is reflected in the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 16

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 17

At the end of the fiscal year, the following adjusting entries were omitted:
   Assuming that financial statements were prepared before the errors were discovered, indicate the effect of each error, considered individually, by inserting the dollar amount in the appropriate spaces. Insert "0" if the error does not affect the item.

Accepted Answer

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

Question 18

Which account would normally not require an adjusting entry?

Accepted Answer

A)  Wages Expense 
B)  Accounts Receivable 
C)  Accumulated Depreciation 
D)  Retained Earnings 
A)  Wages Expense 
B)  Accounts Receivable 
C)  Accumulated Depreciation 
D)  Retained Earnings

Question 19

Encore Consulting is completing the accounting information processing at the end of the company's first fiscal year, December 31, 2011. The following trial balances are available.
   
A. Reconstruct the adjusting entries and give a brief explanation of each.
B. What is the amount of net income?

Accepted Answer

The answer of Encore Consulting is completing the accounting information...

Question 20

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

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Indicate whether the following 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.

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

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

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

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

Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n)

Which of the following is an example of accrued revenue?

The balance in the supplies account, before adjustment at the end of the year is $725. The proper adjusting entry if the amount of supplies on hand at the end of the year is $300 would be

Which of the following is an example of an accrued expense?

If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)

Which of the following is not a characteristic of accrual basis of accounting?

The type of account and normal balance of Unearned Rent is

A fixed asset's market value is reflected in the Balance Sheet.

Adjusting entries affect at least one

Which account would normally not require an adjusting entry?

Encore Consulting is completing the accounting information processing at the end of the company's first fiscal year, December 31, 2011. The following trial balances are available. A. Reconstruct the adjusting entries and give a brief explanation of each. B. What is the amount of net income?

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.

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

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Indicate whether the following 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.

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

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

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

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

Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n)

Which of the following is an example of accrued revenue?

The balance in the supplies account, before adjustment at the end of the year is $725. The proper adjusting entry if the amount of supplies on hand at the end of the year is $300 would be

Which of the following is an example of an accrued expense?

If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)

Which of the following is not a characteristic of accrual basis of accounting?

The type of account and normal balance of Unearned Rent is

A fixed asset's market value is reflected in the Balance Sheet.

Adjusting entries affect at least one

Which account would normally not require an adjusting entry?

Encore Consulting is completing the accounting information processing at the end of the company's first fiscal year, December 31, 2011. The following trial balances are available. A. Reconstruct the adjusting entries and give a brief explanation of each. B. What is the amount of net income?

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.

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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