Question 1

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

Accepted Answer

A) True 
 B)False

Question 2

Using the information given below, prepare a balance sheet for Rapid Car Services, Inc. from the adjusted trial balance. The stockholders did not make any additional investments in the company during the year.

Accepted Answer

The answer of Using the information given below, prepare a...

Question 3

Trapper Company Inc.'s unadjusted and adjusted trial balances on December 31 of the current year are as follows:   Present the four adjusting journal entries that were recorded by Trapper Company.

Accepted Answer

The answer of Trapper Company Inc.'s unadjusted and adjusted trial...

Question 4

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Accepted Answer

A) Understate net income by $28,000. 
B) Overstate net income by $28,000. 
C) Have no effect on net income. 
D) Overstate assets by $28,000. 
E) Understate assets by $28,000. 
A) Understate net income by $28,000. 
B) Overstate net income by $28,000. 
C) Have no effect on net income. 
D) Overstate assets by $28,000. 
E) Understate assets by $28,000.

Question 5

Unearned revenue is reported in the financial statements as:

Accepted Answer

A) A revenue on the balance sheet. 
B) A liability on the balance sheet. 
C) An unearned revenue on the income statement. 
D) An asset on the balance sheet. 
E) A financing activity on the statement of cash flows. 
A) A revenue on the balance sheet. 
B) A liability on the balance sheet. 
C) An unearned revenue on the income statement. 
D) An asset on the balance sheet. 
E) A financing activity on the statement of cash flows.

Question 6

Andrew Inc.'s net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.

Accepted Answer

Profit Margin Ratio

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A _____________ account is an account linked with another account, having an opposite normal balance, and reported as a subtraction from that other account's balance.

Accepted Answer

The answer of A _____________ account is an account linked...

Question 9

The adjusted trial balance must be prepared before the adjusting entries are made.

Accepted Answer

A) True 
 B)False

Question 10

If the January 1 balance in the Supplies account for a company was $520, the company purchased an additional $380 of supplies during the month, and a physical count of the supplies indicates that $235 of supplies is on hand at the end of January, the adjusting entry on January 31 for supplies should be:

Accepted Answer

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

Question 11

Which of the following accounts would be included in a post-closing trial balance?

Accepted Answer

A) Accounts Receivable. 
B) Dividends. 
C) Consulting Fees Earned. 
D) Depreciation Expense-Equipment. 
E) Salaries Expense. 
A) Accounts Receivable. 
B) Dividends. 
C) Consulting Fees Earned. 
D) Depreciation Expense-Equipment. 
E) Salaries Expense.

Question 12

The cash basis of accounting commonly increases the comparability of financial statements from period to period.

Accepted Answer

A) True 
 B)False

Question 13

Permanent accounts include all of the following except:

Accepted Answer

A) Accumulated Depreciation-Equipment. 
B) Prepaid Insurance. 
C) Unearned Revenue. 
D) Accounts Receivable. 
E) Depreciation Expense-Equipment. 
A) Accumulated Depreciation-Equipment. 
B) Prepaid Insurance. 
C) Unearned Revenue. 
D) Accounts Receivable. 
E) Depreciation Expense-Equipment.

Question 14

The calendar year-end adjusted trial balance for Blessinger Co., Inc. follows:   Required:
(a) Prepare a classified year-end balance sheet. (Note: A $9,000 installment on the long-term note payable is due within one year.)

Accepted Answer

@#IMG-DLM& @#IMG-DLM& *NI = $430,800 - $90,000 - $

Question 15

If a company reporting on a calendar year basis, paid $18,000 cash on January 1 for one year of rent in advance and adjusting entries are made at the end of each month, the balance remaining in Prepaid Rent on December 1 of that year should be $1,500.
$18,000 * 1/12 = $1,500

Accepted Answer

A) True 
 B)False

Question 16

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 Rent Revenue 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 17

Which of the following is the usual final step in the accounting cycle?

Accepted Answer

A) Journalizing transactions. 
B) Preparing an adjusted trial balance. 
C) Preparing a post-closing trial balance. 
D) Preparing the financial statements. 
E) Preparing a work sheet. 
A) Journalizing transactions. 
B) Preparing an adjusted trial balance. 
C) Preparing a post-closing trial balance. 
D) Preparing the financial statements. 
E) Preparing a work sheet.

Question 18

Flagg, Inc. records adjusting entries at its December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, at which time $30,000 will be paid. Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.

Accepted Answer

A) Debit Salaries expense $12,000; credit Salaries payable $12,000. 
B) Debit Salaries expense $18,000; debit Salaries payable $12,000; credit Cash $30,000. 
C) Debit Salaries payable $18,000; credit Cash $18,000. 
D) Debit Salaries payable $12,000, credit Salaries expense $12,000. 
E) Debit Salaries expense $18,000; credit Salaries payable $18,000. 
A) Debit Salaries expense $12,000; credit Salaries payable $12,000. 
B) Debit Salaries expense $18,000; debit Salaries payable $12,000; credit Cash $30,000. 
C) Debit Salaries payable $18,000; credit Cash $18,000. 
D) Debit Salaries payable $12,000, credit Salaries expense $12,000. 
E) Debit Salaries expense $18,000; credit Salaries payable $18,000.

Question 19

A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the:

Accepted Answer

A) Operating cycle of a business. 
B) Time period assumption. 
C) Going-concern assumption. 
D) Matching principle. 
E) Accrual basis of accounting. 
A) Operating cycle of a business. 
B) Time period assumption. 
C) Going-concern assumption. 
D) Matching principle. 
E) Accrual basis of accounting.

Question 20

Identify the types of adjusting entries and explain the purpose of each type.

Accepted Answer

Adjusting entries can be grouped into tw

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

Using the information given below, prepare a balance sheet for Rapid Car Services, Inc. from the adjusted trial balance. The stockholders did not make any additional investments in the company during the year.

Trapper Company Inc.'s unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Unearned revenue is reported in the financial statements as:

Andrew Inc.'s net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.

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

A _____________ account is an account linked with another account, having an opposite normal balance, and reported as a subtraction from that other account's balance.

The adjusted trial balance must be prepared before the adjusting entries are made.

Which of the following accounts would be included in a post-closing trial balance?

The cash basis of accounting commonly increases the comparability of financial statements from period to period.

Permanent accounts include all of the following except:

The calendar year-end adjusted trial balance for Blessinger Co., Inc. follows: Required: (a) Prepare a classified year-end balance sheet. (Note: A $9,000 installment on the long-term note payable is due within one year.)

If a company reporting on a calendar year basis, paid $18,000 cash on January 1 for one year of rent in advance and adjusting entries are made at the end of each month, the balance remaining in Prepaid Rent on December 1 of that year should be $1,500. $18,000 * 1/12 = $1,500

Which of the following is the usual final step in the accounting cycle?

A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the:

Identify the types of adjusting entries and explain the purpose of each type.

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

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

Using the information given below, prepare a balance sheet for Rapid Car Services, Inc. from the adjusted trial balance. The stockholders did not make any additional investments in the company during the year.

Trapper Company Inc.'s unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Unearned revenue is reported in the financial statements as:

Andrew Inc.'s net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.

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

A _____________ account is an account linked with another account, having an opposite normal balance, and reported as a subtraction from that other account's balance.

The adjusted trial balance must be prepared before the adjusting entries are made.

Which of the following accounts would be included in a post-closing trial balance?

The cash basis of accounting commonly increases the comparability of financial statements from period to period.

Permanent accounts include all of the following except:

The calendar year-end adjusted trial balance for Blessinger Co., Inc. follows: Required: (a) Prepare a classified year-end balance sheet. (Note: A $9,000 installment on the long-term note payable is due within one year.)

If a company reporting on a calendar year basis, paid $18,000 cash on January 1 for one year of rent in advance and adjusting entries are made at the end of each month, the balance remaining in Prepaid Rent on December 1 of that year should be $1,500. $18,000 * 1/12 = $1,500

Which of the following is the usual final step in the accounting cycle?

A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the:

Identify the types of adjusting entries and explain the purpose of each type.

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