Question 1

An _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Accepted Answer

unadjusted

Question 2

___________________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Accepted Answer

The answer of ___________________ is the process of allocating the...

Question 3

Income Summary is a temporary account only used for the closing process.

Accepted Answer

A) True 
 B)False

Question 4

Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $185,000, expenses of $103,700. 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 entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

Accepted Answer

A) Debit Retained Earnings $297,000; credit Income Summary $297,000 
B) Debit Retained Earnings $63,300; credit Income Summary $63,300 
C) Debit Income Summary $63,300; credit Retained Earnings $63,300 
D) Debit Income Summary $81,300; credit Retained Earnings $81,300 
E) Debit Retained Earnings $81,300; credit Income Summary $81,300 
A) Debit Retained Earnings $297,000; credit Income Summary $297,000 
B) Debit Retained Earnings $63,300; credit Income Summary $63,300 
C) Debit Income Summary $63,300; credit Retained Earnings $63,300 
D) Debit Income Summary $81,300; credit Retained Earnings $81,300 
E) Debit Retained Earnings $81,300; credit Income Summary $81,300

Question 5

A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.

Accepted Answer

A) True 
 B)False

Question 6

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Accepted Answer

A) Intangible expenses. 
B) Prepaid expenses. 
C) Unearned expenses. 
D) Net expenses. 
E) Accrued expenses. 
A) Intangible expenses. 
B) Prepaid expenses. 
C) Unearned expenses. 
D) Net expenses. 
E) Accrued expenses.

Question 7

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

Accepted Answer

A) Debit Dividends $33,000; credit Income Summary $33,000. 
B) Debit Income Summary $33,000; credit Dividends $33,000. 
C) Debit Income Summary $33,000; credit Retained Earnings $33,000. 
D) Debit Retained Earnings $33,000; credit Income Summary $33,000. 
E) Credit Retained Earnings $33,000; debit Dividends $33,000. 
A) Debit Dividends $33,000; credit Income Summary $33,000. 
B) Debit Income Summary $33,000; credit Dividends $33,000. 
C) Debit Income Summary $33,000; credit Retained Earnings $33,000. 
D) Debit Retained Earnings $33,000; credit Income Summary $33,000. 
E) Credit Retained Earnings $33,000; debit Dividends $33,000.

Question 8

The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses, not when cash is paid.

Accepted Answer

A) True 
 B)False

Question 9

The accounting principle that requires revenue to be recorded when earned is the:

Accepted Answer

A) Matching principle. 
B) Revenue recognition principle. 
C) Time period assumption. 
D) Accrual reporting principle. 
E) Going-concern assumption. 
A) Matching principle. 
B) Revenue recognition principle. 
C) Time period assumption. 
D) Accrual reporting principle. 
E) Going-concern assumption.

Question 10

Identify the primary differences between accrual accounting and cash basis accounting.

Accepted Answer

Accrual accounting records revenues in t

Question 11

__________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. _____________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Accepted Answer

The answer of __________ basis accounting means that revenues are...

Question 12

A company's December 31 work sheet for the current period appears below. Based on the information provided, what is net income for the current period? Unadjusted
Trial Balance
Adjustments
Debit
Credit
Debit
Credit
Cash
975
Prepaid insurance
3,600
150
Supplies
180
70
Equipment
10,320
Accounts payable
1,140
Unearned fees
4,500
375
Common stock
9,180
Dividends
1,650
Fees earned
5,850
375
300
Rent expense
1,500
Salaries expense
2,100
315
Utilities expense
345
Insurance expense
150
Supplies expense
70
Depreciation expense-equipment
190
Accumulated depreciation-equipment
190
Salaries payable
315
Accounts receivable
300
Total
20,670
20,670
1,400
1,400

Accepted Answer

A) $1,400. 
B) $1,855. 
C) $1,905. 
D) $2,060. 
E) $4,670. 
A) $1,400. 
B) $1,855. 
C) $1,905. 
D) $2,060. 
E) $4,670.

Question 13

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show correct balances even though all business transactions were properly recorded.

Accepted Answer

A) True 
 B)False

Question 14

Adjusting entries result in a better matching of revenues and expenses for the period.

Accepted Answer

A) True 
 B)False

Question 15

The Income Statement columns of the work sheet prepared for Jolly Auto Service, Inc. at current year-end are shown below. In addition, Retained Earnings had a credit balance of $235,000 and Dividends had a debit balance of $40,000 at year end. Prepare closing journal entries for this company.

Accepted Answer

The answer of The Income Statement columns of the work...

Question 16

Which of the following statements is incorrect?

Accepted Answer

A) Working papers are useful aids in the accounting process. 
B) On the work sheet, the effects of the accounting adjustments are shown on the account balances. 
C) After the work sheet is completed, it can be used to help prepare the financial statements. 
D) On the work sheet, the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance. 
E) A worksheet is not a substitute for financial statements. 
A) Working papers are useful aids in the accounting process. 
B) On the work sheet, the effects of the accounting adjustments are shown on the account balances. 
C) After the work sheet is completed, it can be used to help prepare the financial statements. 
D) On the work sheet, the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance. 
E) A worksheet is not a substitute for financial statements.

Question 17

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Accepted Answer

A) Depreciation Expense. 
B) Unearned Depreciation. 
C) Prepaid Depreciation. 
D) Depreciation Value. 
E) Book Value. 
A) Depreciation Expense. 
B) Unearned Depreciation. 
C) Prepaid Depreciation. 
D) Depreciation Value. 
E) Book Value.

Question 18

Accrued revenues at the end of one accounting period often result in cash _______________________ in the next period.

Accepted Answer

receipts (

Question 19

What is an adjusted trial balance? Why is it prepared?

Accepted Answer

An adjusted trial balance is a list of a

Question 20

The adjusted trial balance contains information pertaining to:

Accepted Answer

A) Asset accounts only. 
B) Balance sheet accounts only. 
C) Income statement accounts only. 
D) All general ledger accounts. 
E) Revenue accounts only. 
A) Asset accounts only. 
B) Balance sheet accounts only. 
C) Income statement accounts only. 
D) All general ledger accounts. 
E) Revenue accounts only.

An _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

___________________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Income Summary is a temporary account only used for the closing process.

A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses, not when cash is paid.

The accounting principle that requires revenue to be recorded when earned is the:

Identify the primary differences between accrual accounting and cash basis accounting.

basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. ___ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show correct balances even though all business transactions were properly recorded.

Adjusting entries result in a better matching of revenues and expenses for the period.

The Income Statement columns of the work sheet prepared for Jolly Auto Service, Inc. at current year-end are shown below. In addition, Retained Earnings had a credit balance of $235,000 and Dividends had a debit balance of $40,000 at year end. Prepare closing journal entries for this company.

Which of the following statements is incorrect?

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Accrued revenues at the end of one accounting period often result in cash _______________________ in the next period.

What is an adjusted trial balance? Why is it prepared?

The adjusted trial balance contains information pertaining to:

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 _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

___________________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Income Summary is a temporary account only used for the closing process.

A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses, not when cash is paid.

The accounting principle that requires revenue to be recorded when earned is the:

Identify the primary differences between accrual accounting and cash basis accounting.

__________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. _____________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show correct balances even though all business transactions were properly recorded.

Adjusting entries result in a better matching of revenues and expenses for the period.

The Income Statement columns of the work sheet prepared for Jolly Auto Service, Inc. at current year-end are shown below. In addition, Retained Earnings had a credit balance of $235,000 and Dividends had a debit balance of $40,000 at year end. Prepare closing journal entries for this company.

Which of the following statements is incorrect?

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Accrued revenues at the end of one accounting period often result in cash _______________________ in the next period.

What is an adjusted trial balance? Why is it prepared?

The adjusted trial balance contains information pertaining to:

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

basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. ___ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.