Question 1

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Accepted Answer

A) Items that require contra accounts. 
B) Items that require adjusting entries. 
C) Asset and equity. 
D) Asset accounts. 
E) Income statement accounts. 
A) Items that require contra accounts. 
B) Items that require adjusting entries. 
C) Asset and equity. 
D) Asset accounts. 
E) Income statement accounts.

Question 2

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

Accepted Answer

A) True 
 B)False

Question 3

Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $185,000, expenses of $103,700, and the company paid $18,000 cash in dividends to the owner (sole stockholder). The retained earnings account before closing had a balance of $297,000. The ending retained earnings balance after closing is:

Accepted Answer

A) $185,000 
B) $63,300 
C) $81,300 
D) $360,300 
E) $378,300 
A) $185,000 
B) $63,300 
C) $81,300 
D) $360,300 
E) $378,300

Question 4

A post-closing trial balance reports:

Accepted Answer

A) All permanent ledger accounts with balances. 
B) All nominal ledger accounts with balances. 
C) All temporary and permanent ledger accounts with balances. 
D) Only revenue and expense accounts. 
E) Only asset accounts. 
A) All permanent ledger accounts with balances. 
B) All nominal ledger accounts with balances. 
C) All temporary and permanent ledger accounts with balances. 
D) Only revenue and expense accounts. 
E) Only asset accounts.

Question 5

On April 1, Santa Fe, Inc. paid Griffith Publishing Company $1,548 for 36-month subscriptions to several different magazines. Santa Fe debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. What adjusting entry should be made by Santa Fe, Inc. for the adjustment on December 31 of the first year assuming the company is using a calendar reporting period and no previous adjustments had been made?

Accepted Answer

A) Debit Subscription Expense $516 and credit Prepaid Subscriptions $516. 
B) Debit Prepaid Subscriptions $516 and credit Subscription Expense $516. 
C) Debit Subscription Expense $387 and credit Cash $387. 
D) Debit Unearned Subscriptions $387 and credit Subscription Expense $387. 
E) Debit Subscription Expense $387 and credit Prepaid Subscriptions $387. 
A) Debit Subscription Expense $516 and credit Prepaid Subscriptions $516. 
B) Debit Prepaid Subscriptions $516 and credit Subscription Expense $516. 
C) Debit Subscription Expense $387 and credit Cash $387. 
D) Debit Unearned Subscriptions $387 and credit Subscription Expense $387. 
E) Debit Subscription Expense $387 and credit Prepaid Subscriptions $387.

Question 6

Explain the difference between temporary and permanent accounts.

Accepted Answer

Temporary, or nominal, accounts accumula

Question 7

On October 1, Goodwell Company rented warehouse space to a tenant for $2,500 per month and received $12,500 for five months' rent in advance on that date. The collection was credited to the Unearned Rent account. The company's annual accounting period ends on December 31. The Unearned Rent account balance at the end of December, after adjustment, should be:

Accepted Answer

A) $5,000. 
B) $7,500. 
C) $12,500. 
D) $2,500. 
E) $10,000. 
A) $5,000. 
B) $7,500. 
C) $12,500. 
D) $2,500. 
E) $10,000.

Question 8

Profit margin = ___________________ divided by net sales.

Accepted Answer

The answer of Profit margin = ___________________ divided by net...

Question 9

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

Accepted Answer

A) Assets overstated and equity understated. 
B) Assets and equity both understated. 
C) Assets overstated, net income understated, and equity overstated. 
D) Assets, net income, and equity understated. 
E) Assets, net income, and equity overstated. 
A) Assets overstated and equity understated. 
B) Assets and equity both understated. 
C) Assets overstated, net income understated, and equity overstated. 
D) Assets, net income, and equity understated. 
E) Assets, net income, and equity overstated.

Question 10

The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

Accepted Answer

A) True 
 B)False

Question 11

Victor Company received $3,200 from a customer in March of the current year as an advance payment on services. At the end of the year, $1,400 worth of services have been provided. The year-end adjusting entry that Victor should make to account for the revenue earned is:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

A post-closing trial balance reports:

Explain the difference between temporary and permanent accounts.

Profit margin = ___________________ divided by net sales.

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

Victor Company received $3,200 from a customer in March of the current year as an advance payment on services. At the end of the year, $1,400 worth of services have been provided. The year-end adjusting entry that Victor should make to account for the revenue earned is:

Introducing Financial Accounting

Accounting System and Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 3: Adjusting Accounts for Financial Statements

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

A post-closing trial balance reports:

Explain the difference between temporary and permanent accounts.

Profit margin = ___________________ divided by net sales.

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

Victor Company received $3,200 from a customer in March of the current year as an advance payment on services. At the end of the year, $1,400 worth of services have been provided. The year-end adjusting entry that Victor should make to account for the revenue earned is:

Introducing Financial Accounting

Accounting System and Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters