Question 1

The ________________________________ method allocates equal amounts of an asset's cost to depreciation during its useful life.

Accepted Answer

Straight-l

Question 2

The approach to preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

Accepted Answer

A)  Accrual basis accounting. 
B)  The operating cycle of a business. 
C)  Cash basis accounting. 
D)  The revenue recognition principle. 
E)  The matching principle. 
A)  Accrual basis accounting. 
B)  The operating cycle of a business. 
C)  Cash basis accounting. 
D)  The revenue recognition principle. 
E)  The matching principle.

Question 3

Interim financial reports are financial reports:

Accepted Answer

A)  Covering less than one year,usually based on one- or three-month periods. 
B)  That are prepared before any adjustments have been recorded. 
C)  That show the assets above the liabilities and the liabilities above the equity. 
D)  In which revenues are reported in the income statement when cash is received and expenses are reported when cash is paid. 
E)  In which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues. 
A)  Covering less than one year,usually based on one- or three-month periods. 
B)  That are prepared before any adjustments have been recorded. 
C)  That show the assets above the liabilities and the liabilities above the equity. 
D)  In which revenues are reported in the income statement when cash is received and expenses are reported when cash is paid. 
E)  In which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues.

Question 4

The timeliness principle assumes that an organization's activities can be divided into specific periods.

Accepted Answer

A) True 
 B)False

Question 5

Adjusting entries are designed primarily to correct errors made by bookkeepers.

Accepted Answer

A) True 
 B)False

Question 6

Before an adjusting entry for expired insurance is made,the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

Accepted Answer

A) True 
 B)False

Question 7

Prepare a balance sheet from the adjusted trial balance above.

Accepted Answer

The answer of Prepare a balance sheet from the adjusted...

Question 8

Given the schedule below,indicate the impact of the following errors made during the adjusting entry process.Use a "+" followed by the amount for overstatements,a "-" followed by the amount for understatements,and a "0" for no effect.
(1)Recorded accrued salaries expense of $1,200 with a debit to Prepaid Salaries.
(2)The bookkeeper forgot to record $2,700 of depreciation on office equipment.
(3)Failed to accrue $300 of interest on a note receivable.
Ex.Failed to recognize that $600 of unearned revenues,previously recorded as liabilities,had been earned by year-end.

Accepted Answer

The answer of Given the schedule below,indicate the impact of...

Question 9

Prepare the December 31 adjusting entry to record $450 of earned but unpaid salaries.

Accepted Answer

@#IMG-DLM& To record

Question 10

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

Accepted Answer

A)  Accrual basis accounting. 
B)  The operating cycle of a business. 
C)  Cash basis accounting. 
D)  The revenue recognition principle. 
E)  The matching principle. 
A)  Accrual basis accounting. 
B)  The operating cycle of a business. 
C)  Cash basis accounting. 
D)  The revenue recognition principle. 
E)  The matching principle.

Question 11

The expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Accepted Answer

A)  Accumulated depreciation. 
B)  The cash basis of accounting. 
C)  The matching principle. 
D)  Depreciation. 
E)  Allowance for depreciation. 
A)  Accumulated depreciation. 
B)  The cash basis of accounting. 
C)  The matching principle. 
D)  Depreciation. 
E)  Allowance for depreciation.

Question 12

Correcting entries cannot involve cash.

Accepted Answer

A) True 
 B)False

Question 13

The total amount of depreciation recorded for an asset during the entire time the asset has been owned:

Accepted Answer

A)  Is not shown on the balance sheet. 
B)  Is referred to as accumulated depreciation. 
C)  Is shown on the income statement. 
D)  Is shown on the statement of changes in equity. 
E)  Is recorded in a liability account. 
A)  Is not shown on the balance sheet. 
B)  Is referred to as accumulated depreciation. 
C)  Is shown on the income statement. 
D)  Is shown on the statement of changes in equity. 
E)  Is recorded in a liability account.

Question 14

Adjusting entries are journal entries made at the end of an accounting period for the purpose of:

Accepted Answer

A)  Updating related liability and asset accounts. 
B)  Assigning revenues to the period in which they are earned. 
C)  Assigning expenses to the period in which the expiration of benefit has incurred. 
D)  Recording internal transactions. 
E)  All of these answers are correct. 
A)  Updating related liability and asset accounts. 
B)  Assigning revenues to the period in which they are earned. 
C)  Assigning expenses to the period in which the expiration of benefit has incurred. 
D)  Recording internal transactions. 
E)  All of these answers are correct.

Question 15

Vanderet's Computer Business owns computer equipment which cost $3,240 and has an expected useful life of three years.No residual value is expected.At the company's yearend,December 31,the equipment's book value is $2,520.In what month was the computer purchased using the straight-line depreciation method?

Accepted Answer

A)  January 
B)  March 
C)  May 
D)  June 
E)  August 
A)  January 
B)  March 
C)  May 
D)  June 
E)  August

Question 16

Due to an oversight,the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31.This oversight would:

Accepted Answer

A)  Understate net income by $24,000. 
B)  Have no effect on net income. 
C)  Overstate net income by $24,000. 
D)  Overstate liabilities. 
E)  Have no effect on the balance sheet. 
A)  Understate net income by $24,000. 
B)  Have no effect on net income. 
C)  Overstate net income by $24,000. 
D)  Overstate liabilities. 
E)  Have no effect on the balance sheet.

Question 17

The following journal entry (incorrectly)recorded the purchase of office supplies for $1,200 on credit:   What entry or entries best correct and document the correction of this error?

Accepted Answer

A)  None required.The original entry above is correct. 
B) 
  
C) 
  
D) 
  
E) 
  
A)  None required.The original entry above is correct. 
B) 
  
C) 
  
D) 
  
E)

Question 18

Discuss how accrual accounting adds usefulness to financial statements.

Accepted Answer

The accrual accounting method

Question 19

If the accountant failed to make an adjusting entry at the end of the period to record depreciation for the period,the omission will cause:

Accepted Answer

A)  An overstatement of expenses. 
B)  An overstatement of revenues. 
C)  An understatement of assets. 
D)  An overstatement of liabilities. 
E)  An overstatement of assets. 
A)  An overstatement of expenses. 
B)  An overstatement of revenues. 
C)  An understatement of assets. 
D)  An overstatement of liabilities. 
E)  An overstatement of assets.

Question 20

Explain how accounting adjustments affect financial statements.

Accepted Answer

Without adjustments,accounts would have

The ________________________________ method allocates equal amounts of an asset's cost to depreciation during its useful life.

The approach to preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

Interim financial reports are financial reports:

The timeliness principle assumes that an organization's activities can be divided into specific periods.

Adjusting entries are designed primarily to correct errors made by bookkeepers.

Before an adjusting entry for expired insurance is made,the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

Prepare a balance sheet from the adjusted trial balance above.

Prepare the December 31 adjusting entry to record $450 of earned but unpaid salaries.

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

The expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Correcting entries cannot involve cash.

The total amount of depreciation recorded for an asset during the entire time the asset has been owned:

Adjusting entries are journal entries made at the end of an accounting period for the purpose of:

Due to an oversight,the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31.This oversight would:

The following journal entry (incorrectly)recorded the purchase of office supplies for $1,200 on credit: What entry or entries best correct and document the correction of this error?

Discuss how accrual accounting adds usefulness to financial statements.

If the accountant failed to make an adjusting entry at the end of the period to record depreciation for the period,the omission will cause:

Explain how accounting adjustments affect financial statements.

Accounting in Business

Analyzing and Reporting Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters

Exam 3: Adjusting Accounts for Financial Statements

The ________________________________ method allocates equal amounts of an asset's cost to depreciation during its useful life.

The approach to preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

Interim financial reports are financial reports:

The timeliness principle assumes that an organization's activities can be divided into specific periods.

Adjusting entries are designed primarily to correct errors made by bookkeepers.

Before an adjusting entry for expired insurance is made,the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

Prepare a balance sheet from the adjusted trial balance above.

Prepare the December 31 adjusting entry to record $450 of earned but unpaid salaries.

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

The expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Correcting entries cannot involve cash.

The total amount of depreciation recorded for an asset during the entire time the asset has been owned:

Adjusting entries are journal entries made at the end of an accounting period for the purpose of:

Due to an oversight,the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31.This oversight would:

The following journal entry (incorrectly)recorded the purchase of office supplies for $1,200 on credit: What entry or entries best correct and document the correction of this error?

Discuss how accrual accounting adds usefulness to financial statements.

If the accountant failed to make an adjusting entry at the end of the period to record depreciation for the period,the omission will cause:

Explain how accounting adjustments affect financial statements.

Accounting in Business

Analyzing and Reporting Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters