Question 1

Accumulated Depreciation accounts are liability accounts.

Accepted Answer

A) True 
 B)False

Question 2

Jacki Lopez started JVL Consulting on January 1, 2011. The following are the account balances at the end of the first month of business, before adjusting entries were recorded:
   Adjustment data:
Supplies on hand at the end of the month: $300
Unbilled consulting revenue: $850
Rent expense for the month: $2,000
Depreciation on equipment: $150
(a) Prepare the required adjusting entries, adding accounts as needed.
(b) Prepare an Adjusted Trial Balance for JVL Consulting as of January 31, 2011.

Accepted Answer

The answer of Jacki Lopez started JVL Consulting on January...

Question 3

The entry to adjust for the cost of supplies used during the accounting period is

Accepted Answer

A)  debit Supplies Expense; credit Supplies 
B)  debit Retained Earnings; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Retained Earnings 
A)  debit Supplies Expense; credit Supplies 
B)  debit Retained Earnings; credit Supplies 
C)  debit Accounts Payable; credit Supplies 
D)  debit Supplies; credit Retained Earnings

Question 4

Prior to the adjusting process, accrued revenue has

Accepted Answer

A)  been earned and cash received 
B)  been earned and not recorded as revenue 
C)  not been earned but recorded as revenue 
D)  not been recorded as revenue but cash has been received 
A)  been earned and cash received 
B)  been earned and not recorded as revenue 
C)  not been earned but recorded as revenue 
D)  not been recorded as revenue but cash has been received

Question 5

A contra asset account for Land will normally appear in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Explain the difference between accrual-basis accounting and cash-basis accounting.

Accepted Answer

Accrual-basis accounting reports revenue

Question 8

On November 1st, clients of Great Designs Company prepaid $2,800 for services to be provided in the future at a rate of $70 per hour.
(a) Journalize the receipt of this cash.
(b) As of November 30th, Great Designs shows that 16 hours of services have been provided on this agreement. Prepare the necessary journal entry to record this.
(c) Determine the total unearned fees in hours and dollars at November 30th.

Accepted Answer

The answer of On November 1st, clients of Great Designs...

Question 9

All of the following statements regarding vertical analysis are true except

Accepted Answer

A)  Vertical analysis may be prepared for several periods to analyze changes in relationships over time. 
B)  In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets. 
C)  In a vertical analysis of an income statement, each item is stated as a percent of total expenses. 
D)  Major differences between a company's vertical analysis and industry averages should be investigated. 
A)  Vertical analysis may be prepared for several periods to analyze changes in relationships over time. 
B)  In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets. 
C)  In a vertical analysis of an income statement, each item is stated as a percent of total expenses. 
D)  Major differences between a company's vertical analysis and industry averages should be investigated.

Question 10

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted 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 11

Austin, Inc. made a Prepaid Rent payment of $2,800 on January 1st. The company's monthly rent is $700. The amount of Prepaid Rent that would appear on the January 31 balance sheet after adjustment is:

Accepted Answer

A)  $2,100 
B)  $700 
C)  $3,500 
D)  $1,400 
A)  $2,100 
B)  $700 
C)  $3,500 
D)  $1,400

Question 12

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

Accepted Answer

A) True 
 B)False

Question 13

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 14

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

Accepted Answer

$4,200/12

Question 15

The account type and normal balance of Prepaid Expense is

Accepted Answer

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

Question 16

Depreciation on equipment for the year is $900.
(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

The answer of Depreciation on equipment for the year is...

Question 17

The Supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies were on hand. Prepare the adjusting entry for supplies.

Accepted Answer

$1,750 + $

Question 18

Even though GAAP requires the accrual basis of accounting, some businesses prefer using the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 19

Deferred revenue is revenue that is

Accepted Answer

A)  earned and the cash has been received 
B)  earned but the cash has not been received 
C)  not earned and the cash has not been received 
D)  not earned but the cash has been received 
A)  earned and the cash has been received 
B)  earned but the cash has not been received 
C)  not earned and the cash has not been received 
D)  not earned but the cash has been received

Question 20

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

Accepted Answer

A) True 
 B)False

Accumulated Depreciation accounts are liability accounts.

The entry to adjust for the cost of supplies used during the accounting period is

Prior to the adjusting process, accrued revenue has

A contra asset account for Land will normally appear in 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?

Explain the difference between accrual-basis accounting and cash-basis accounting.

All of the following statements regarding vertical analysis are true except

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

Austin, Inc. made a Prepaid Rent payment of $2,800 on January 1st. The company's monthly rent is $700. The amount of Prepaid Rent that would appear on the January 31 balance sheet after adjustment is:

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

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

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

The account type and normal balance of Prepaid Expense is

Depreciation on equipment for the year is $900. (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.

The Supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies were on hand. Prepare the adjusting entry for supplies.

Even though GAAP requires the accrual basis of accounting, some businesses prefer using the cash basis of accounting.

Deferred revenue is revenue that is

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

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

Filters

Exam 3: The Adjusting Process

Accumulated Depreciation accounts are liability accounts.

The entry to adjust for the cost of supplies used during the accounting period is

Prior to the adjusting process, accrued revenue has

A contra asset account for Land will normally appear in 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?

Explain the difference between accrual-basis accounting and cash-basis accounting.

All of the following statements regarding vertical analysis are true except

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

Austin, Inc. made a Prepaid Rent payment of $2,800 on January 1st. The company's monthly rent is $700. The amount of Prepaid Rent that would appear on the January 31 balance sheet after adjustment is:

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

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

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

The account type and normal balance of Prepaid Expense is

Depreciation on equipment for the year is $900. (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.

The Supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies were on hand. Prepare the adjusting entry for supplies.

Even though GAAP requires the accrual basis of accounting, some businesses prefer using the cash basis of accounting.

Deferred revenue is revenue that is

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

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

Filters