Question 1

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

Accepted Answer

A)  Total assets will be understated at the end of the current year. 
B)  The balance sheet and income statement will be misstated, but the retained earnings statement will be correct for the current year. 
C)  Net income will be overstated for the current year. 
D)  Total liabilities and total assets will be understated. 
A)  Total assets will be understated at the end of the current year. 
B)  The balance sheet and income statement will be misstated, but the retained earnings statement will be correct for the current year. 
C)  Net income will be overstated for the current year. 
D)  Total liabilities and total assets will be understated.

Question 2

When is the adjusted trial balance prepared?

Accepted Answer

A)  before adjusting journal entries are posted 
B)  after adjusting journal entries are posted 
C)  after the adjusting journal entries are journalized 
D)  before the adjusting journal entries are journalized 
A)  before adjusting journal entries are posted 
B)  after adjusting journal entries are posted 
C)  after the adjusting journal entries are journalized 
D)  before the adjusting journal entries are journalized

Question 3

The adjusting entry for rent earned that is currently recorded in the unearned rent account is

Accepted Answer

A)  debit Unearned Rent; credit Rent Revenue 
B)  debit Rent Revenue; credit Unearned Rent 
C)  debit Unearned Rent; credit Prepaid Rent 
D)  debit Rent Expense; credit Unearned Rent 
A)  debit Unearned Rent; credit Rent Revenue 
B)  debit Rent Revenue; credit Unearned Rent 
C)  debit Unearned Rent; credit Prepaid Rent 
D)  debit Rent Expense; credit Unearned Rent

Question 4

The balance in the office supplies account on June 1 was $6,300, supplies purchased during June were $3,100, and the supplies on hand at June 30 were $2,500. The amount to be used for the appropriate adjusting entry is

Accepted Answer

A)  $3,700 
B)  $11,900 
C)  $5,700 
D)  $6,900 
A)  $3,700 
B)  $11,900 
C)  $5,700 
D)  $6,900

Question 5

Adjusting entries affect only expense and asset accounts.

Accepted Answer

A) True 
 B)False

Question 6

The adjusted trial balance verifies that total debits equals total credits before the adjusting entries are prepared.

Accepted Answer

A) True 
 B)False

Question 7

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Accepted Answer

A) True 
 B)False

Question 8

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.

Question 9

A company depreciates its equipment $500 a year. The adjusting entry for December 31 is debit Depreciation Expense, $500 and credit Equipment, $500.

Accepted Answer

A) True 
 B)False

Question 10

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).

Accepted Answer

The answer of Journalize the six entries to adjust the...

Question 11

The balance in the prepaid rent account before adjustment at the end of the year is $24,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

Accepted Answer

A)  debit Rent Expense, $6,000; credit Prepaid Rent, $6,000 
B)  debit Prepaid Rent, $18,000; credit Rent Expense, $6,000 
C)  debit Rent Expense, $18,000; credit Prepaid Rent, $6,000 
D)  debit Prepaid Rent, $6,000; credit Rent Expense, $6,000 
A)  debit Rent Expense, $6,000; credit Prepaid Rent, $6,000 
B)  debit Prepaid Rent, $18,000; credit Rent Expense, $6,000 
C)  debit Rent Expense, $18,000; credit Prepaid Rent, $6,000 
D)  debit Prepaid Rent, $6,000; credit Rent Expense, $6,000

Question 12

For the year ending June 30, Island Clinical Services mistakenly omitted adjusting entries for $1,200 of supplies that were used, (2) unearned revenue of $6,000 that was earned, and (3) insurance of $5,000 that expired. What is the combined effect of these errors on (a) revenues, (b) expenses, and (c) net income for the year ending June 30?

Accepted Answer

(a) Revenues were understated

Question 13

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

Accepted Answer

A) True 
 B)False

Question 14

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 15

The matching concept supports matching expenses with the related revenues.

Accepted Answer

A) True 
 B)False

Question 16

A company purchases a one-year insurance policy on June 1 for $1,260. The adjusting entry on December 31 is

Accepted Answer

A)  debit Insurance Expense, $630 and credit Prepaid Insurance, $630. 
B)  debit Insurance Expense, $525 and credit Prepaid Insurance, $525. 
C)  debit Insurance Expense, $735, and credit Prepaid Insurance, $735. 
D)  debit Prepaid Insurance, $630, and credit Cash, $630. 
A)  debit Insurance Expense, $630 and credit Prepaid Insurance, $630. 
B)  debit Insurance Expense, $525 and credit Prepaid Insurance, $525. 
C)  debit Insurance Expense, $735, and credit Prepaid Insurance, $735. 
D)  debit Prepaid Insurance, $630, and credit Cash, $630.

Question 17

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 18

Prepare adjusting entries for the following transactions:

Accepted Answer

The answer of Prepare adjusting entries for the following transactions:
...

Question 19

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...

Question 20

A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

Accepted Answer

A)  debit Salaries Payable, $8,000; credit Cash, $8,000 
B)  debit Salary Expense, $8,000; credit Dividends, $8,000 
C)  debit Salary Expense, $8,000; credit Salaries Payable, $8,000 
D)  debit Dividends, $8,000; credit Cash, $8,000 
A)  debit Salaries Payable, $8,000; credit Cash, $8,000 
B)  debit Salary Expense, $8,000; credit Dividends, $8,000 
C)  debit Salary Expense, $8,000; credit Salaries Payable, $8,000 
D)  debit Dividends, $8,000; credit Cash, $8,000

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

When is the adjusted trial balance prepared?

The adjusting entry for rent earned that is currently recorded in the unearned rent account is

The balance in the office supplies account on June 1 was $6,300, supplies purchased during June were $3,100, and the supplies on hand at June 30 were $2,500. The amount to be used for the appropriate adjusting entry is

Adjusting entries affect only expense and asset accounts.

The adjusted trial balance verifies that total debits equals total credits before the adjusting entries are prepared.

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Adjusting entries always include

A company depreciates its equipment $500 a year. The adjusting entry for December 31 is debit Depreciation Expense, $500 and credit Equipment, $500.

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).

The balance in the prepaid rent account before adjustment at the end of the year is $24,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

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

The matching concept supports matching expenses with the related revenues.

A company purchases a one-year insurance policy on June 1 for $1,260. The adjusting entry on December 31 is

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

Prepare adjusting entries for the following transactions:

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

A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

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

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

When is the adjusted trial balance prepared?

The adjusting entry for rent earned that is currently recorded in the unearned rent account is

The balance in the office supplies account on June 1 was $6,300, supplies purchased during June were $3,100, and the supplies on hand at June 30 were $2,500. The amount to be used for the appropriate adjusting entry is

Adjusting entries affect only expense and asset accounts.

The adjusted trial balance verifies that total debits equals total credits before the adjusting entries are prepared.

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Adjusting entries always include

A company depreciates its equipment $500 a year. The adjusting entry for December 31 is debit Depreciation Expense, $500 and credit Equipment, $500.

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).

The balance in the prepaid rent account before adjustment at the end of the year is $24,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

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

The matching concept supports matching expenses with the related revenues.

A company purchases a one-year insurance policy on June 1 for $1,260. The adjusting entry on December 31 is

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

Prepare adjusting entries for the following transactions:

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

A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

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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