Question 1

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Accepted Answer

A) Is referred to as depreciation expense. 
B) Is referred to as accumulated depreciation. 
C) Is shown on the income statement of the final period. 
D) Is only recorded when the asset is disposed of. 
E) Is referred to as an accrued asset. 
A) Is referred to as depreciation expense. 
B) Is referred to as accumulated depreciation. 
C) Is shown on the income statement of the final period. 
D) Is only recorded when the asset is disposed of. 
E) Is referred to as an accrued asset.

Question 2

Rogers Company's employees are paid a total of $1,600 per day for a 5-day workweek. The employees are paid each Friday. This year the accounting period ends on Tuesday. Prepare the December 31 year-end adjusting journal entry Rogers Company should make to accrue wages.

Accepted Answer

The answer of Rogers Company's employees are paid a total...

Question 3

Before an adjusting entry to accrue employee salaries is made, Salaries Expense and Salaries Payable are both understated.

Accepted Answer

A) True 
 B)False

Question 4

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. Assuming no previous adjustments have been made for the expired insurance, the correct adjusting entry on December 31 would be:

Accepted Answer

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

Question 5

Closing the temporary accounts at the end of each accounting period does all of the following except:

Accepted Answer

A) Serves to transfer the effects of these accounts to the retained earnings account on the balance sheet. 
B) Prepares the dividends account for use in the next period. 
C) Brings the revenue and expense accounts to zero balances. 
D) Has no effect on the retained earnings account. 
E) Causes retained earnings to reflect increases from revenues and decreases from expenses and dividends. 
A) Serves to transfer the effects of these accounts to the retained earnings account on the balance sheet. 
B) Prepares the dividends account for use in the next period. 
C) Brings the revenue and expense accounts to zero balances. 
D) Has no effect on the retained earnings account. 
E) Causes retained earnings to reflect increases from revenues and decreases from expenses and dividends.

Question 6

The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following: 1. Office supplies used during the period, $1,200.
2) Expiration of prepaid rent, $700.
3) Accrued salaries expense, $500.
4) Depreciation expense, $800.
5) Accrued service fees receivable, $400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A) $80,400. 
B) $84,000. 
C) $85,700. 
D) $85,900. 
E) $87,600. 
A) $80,400. 
B) $84,000. 
C) $85,700. 
D) $85,900. 
E) $87,600.

Question 7

The following information is available for the Higgins Travel Agency, Inc. After recording these closing entries, what will be the balance in the Retained Earnings account?

Accepted Answer

A) $75,500. 
B) $184,500. 
C) $99,500. 
D) $160,500. 
E) $130,000. 
A) $75,500. 
B) $184,500. 
C) $99,500. 
D) $160,500. 
E) $130,000.

Question 8

Prior to recording adjusting entries, the Office Supplies account had a $1,750 debit balance. A physical count of the supplies at the end of the period showed $925 of unused supplies on hand. The required adjusting entry is:

Accepted Answer

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

Question 9

Holman Company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciated at $15,000 per year using the straight-line depreciation method. The adjusting entry needed to record annual depreciation is:

Accepted Answer

A) Debit Depreciation Expense, $15,000; credit Equipment, $15,000. 
B) Debit Equipment, $15,000; credit Accumulated Depreciation, $15,000. 
C) Debit Depreciation Expense, $10,000; credit Accumulated Depreciation, $10,000. 
D) Debit Depreciation Expense, $10,000; credit Equipment, $10,000. 
E) Debit Depreciation Expense, $15,000; credit Accumulated Depreciation, $15,000. 
A) Debit Depreciation Expense, $15,000; credit Equipment, $15,000. 
B) Debit Equipment, $15,000; credit Accumulated Depreciation, $15,000. 
C) Debit Depreciation Expense, $10,000; credit Accumulated Depreciation, $10,000. 
D) Debit Depreciation Expense, $10,000; credit Equipment, $10,000. 
E) Debit Depreciation Expense, $15,000; credit Accumulated Depreciation, $15,000.

Question 10

_______________ are long-term resources used to produce or sell products and services; they generally lack physical form and their benefits are highly uncertain.

Accepted Answer

The answer of _______________ are long-term resources used to produce...

Question 11

Gracio Co., Inc. had the following transactions in the last two months of its year ended December 31. Prepare entries for these transactions under the method that records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year.

Accepted Answer

The answer of Gracio Co., Inc. had the following transactions...

Question 12

Interim financial statements refer to financial reports that:

Accepted Answer

A) Cover less than one year, usually spanning one, three, or six-month periods. 
B) Are prepared before any adjustments have been recorded. 
C) Show the assets above the liabilities and the liabilities above the equity. 
D) Report revenues on the income statement when cash is received and expenses when cash is paid. 
E) Use the adjustment process to assign revenues to the periods in which they are earned and to match expenses with revenues. 
A) Cover less than one year, usually spanning one, three, or six-month periods. 
B) Are prepared before any adjustments have been recorded. 
C) Show the assets above the liabilities and the liabilities above the equity. 
D) Report revenues on the income statement when cash is received and expenses when cash is paid. 
E) Use the adjustment process to assign revenues to the periods in which they are earned and to match expenses with revenues.

Question 13

Explain why temporary accounts are closed each period.

Accepted Answer

Temporary accounts accumulate data relat

Question 14

The following unadjusted and adjusted trial balances are from the current year's accounting system for Excelsior Inc.
Excelsior, Inc.
Trial Balances
For Year Ended December 31
Unadjusted
Trial Balance
Adjusted
Trial Balance
Debit
Credit
Debit
Credit
Cash
11,300
11,300
Accounts Receivable
16,340
17,140
Office supplies
1,145
645
Prepaid advertising
1,000
450
Building
26,700
26,700
Accumulated depreciation-Building
1,300
6,300
Accounts payable
3,320
3,500
Unearned services revenue
4,410
3,010
Common stock
1,000
1,000
Retained earnings
16,905
16,905
Services revenue
72,400
74,600
Salaries expense
34,500
34,500
Utilities expense
5,450
5,630
Advertising expense
2,900
3,450
Supplies expense
500
Depreciation expense-building
5,000
Total
99,335
99,335
105,315
105,315
Present the six adjusting entries in general journal form that explain the changes in the account balances from the unadjusted to the adjusted trial balance.

Accepted Answer

The answer of The following unadjusted and adjusted trial balances...

Question 15

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

Accepted Answer

A) True 
 B)False

Question 16

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Accepted Answer

A) True 
 B)False

Question 17

On January 1, Eastern College received $1,200,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. What amount of tuition revenue should the college recognize on January 31?

Accepted Answer

A) $300,000. 
B) $600,000. 
C) $800,000. 
D) $900,000. 
E) $1,200,000. 
A) $300,000. 
B) $600,000. 
C) $800,000. 
D) $900,000. 
E) $1,200,000.

Question 18

Reversing entries are optional.

Accepted Answer

A) True 
 B)False

Question 19

How is the current ratio calculated? How is it used to evaluate a company?

Accepted Answer

The current ratio is current assets divi

Question 20

A benefit of using a work sheet is that it aids in the preparation of the financial statements.

Accepted Answer

A) True 
 B)False

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Rogers Company's employees are paid a total of $1,600 per day for a 5-day workweek. The employees are paid each Friday. This year the accounting period ends on Tuesday. Prepare the December 31 year-end adjusting journal entry Rogers Company should make to accrue wages.

Before an adjusting entry to accrue employee salaries is made, Salaries Expense and Salaries Payable are both understated.

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. Assuming no previous adjustments have been made for the expired insurance, the correct adjusting entry on December 31 would be:

Closing the temporary accounts at the end of each accounting period does all of the following except:

The following information is available for the Higgins Travel Agency, Inc. After recording these closing entries, what will be the balance in the Retained Earnings account?

Prior to recording adjusting entries, the Office Supplies account had a $1,750 debit balance. A physical count of the supplies at the end of the period showed $925 of unused supplies on hand. The required adjusting entry is:

Holman Company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciated at $15,000 per year using the straight-line depreciation method. The adjusting entry needed to record annual depreciation is:

_______________ are long-term resources used to produce or sell products and services; they generally lack physical form and their benefits are highly uncertain.

Gracio Co., Inc. had the following transactions in the last two months of its year ended December 31. Prepare entries for these transactions under the method that records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year.

Interim financial statements refer to financial reports that:

Explain why temporary accounts are closed each period.

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Reversing entries are optional.

How is the current ratio calculated? How is it used to evaluate a company?

A benefit of using a work sheet is that it aids in the preparation of the financial statements.

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

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Rogers Company's employees are paid a total of $1,600 per day for a 5-day workweek. The employees are paid each Friday. This year the accounting period ends on Tuesday. Prepare the December 31 year-end adjusting journal entry Rogers Company should make to accrue wages.

Before an adjusting entry to accrue employee salaries is made, Salaries Expense and Salaries Payable are both understated.

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. Assuming no previous adjustments have been made for the expired insurance, the correct adjusting entry on December 31 would be:

Closing the temporary accounts at the end of each accounting period does all of the following except:

The following information is available for the Higgins Travel Agency, Inc. After recording these closing entries, what will be the balance in the Retained Earnings account?

Prior to recording adjusting entries, the Office Supplies account had a $1,750 debit balance. A physical count of the supplies at the end of the period showed $925 of unused supplies on hand. The required adjusting entry is:

Holman Company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciated at $15,000 per year using the straight-line depreciation method. The adjusting entry needed to record annual depreciation is:

_______________ are long-term resources used to produce or sell products and services; they generally lack physical form and their benefits are highly uncertain.

Gracio Co., Inc. had the following transactions in the last two months of its year ended December 31. Prepare entries for these transactions under the method that records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year.

Interim financial statements refer to financial reports that:

Explain why temporary accounts are closed each period.

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Reversing entries are optional.

How is the current ratio calculated? How is it used to evaluate a company?

A benefit of using a work sheet is that it aids in the preparation of the financial statements.

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