Question 1

Based on the following information,what would be the balance in the Retained Earnings Account,assuming all accounts have a normal balance?

Accepted Answer

A) $0 
B) $13,718 
C) $13,155 
D) $13,284 
E) $2,563

Question 2

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Accepted Answer

The answer of ______________________ are required at the end of...

Question 3

July 31,2013,the end of the quarter is on a Wednesday.Employees get paid each Friday for the week worked.Abel Co.has five employees who earn $100 per day each.Assuming the proper adjusting journal entry was made on June 30,prepare the journal entry to record the payment of wages on August 2.

Accepted Answer

The answer of July 31,2013,the end of the quarter is...

Question 4

Prepare a statement of retained earnings from the adjusted trial balance of Hanson Storage.

Accepted Answer

The answer of Prepare a statement of retained earnings from...

Question 5

Intangible assets are long-term resources used to produce or sell products and services; they generally lack ______________ and their benefits are highly ____________.

Accepted Answer

The answer of Intangible assets are long-term resources used to...

Question 6

On June 30,2014,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2014,for Apricot would include:

Accepted Answer

A) A debit to Management Services Expense for $1,250. 
B) A debit to Prepaid Management Services Expense for $1,250. 
C) A credit to Management Services Expense for $3,750. 
D) A debit to Prepaid Management Services Expense for $3,750. 
E) A credit to Management Services Payable for $1,250.

Question 7

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

Accepted Answer

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

Question 8

Ben and Jerry's had total assets of $149,501,000,net income of $6,242,000,and net sales of $209,203,000.Profit margin was 2.98%.

Accepted Answer

A) True 
 B)False

Question 9

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day-to-day operations of the business is:

Accepted Answer

A) Referred to as depreciation expense. 
B) Referred to as accumulated depreciation. 
C) Shown on the income statement of the final period. 
D) Only recorded when the asset is disposed of. 
E) Referred to as an accrued asset.

Question 10

A trial balance prepared after adjustments have been recorded is called a(n):

Accepted Answer

A) Balance sheet 
B) Adjusted trial balance 
C) Unadjusted trial balance 
D) Classified balance sheet 
E) Unclassified balance sheet

Question 11

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

Accepted Answer

The answer of How is the current ratio calculated? How...

Question 12

A company purchased a new truck at a cost of $42,000 on July 1,2014.The truck is estimated to have a useful life of 6 years and a salvage value of $3,000.Using the straight- line method,how much depreciation expense will be recorded for the truck for the year ended December 31,2014?

Accepted Answer

A) $3,250 
B) $3,500 
C) $4,000 
D) $6,500 
E) $7,000

Question 13

A classified balance sheet:

Accepted Answer

A) Measures a company's ability to pay its bills on time. 
B) Organizes assets and liabilities into important subgroups. 
C) Presents revenues,expenses,and net income. 
D) Reports operating,investing,and financing activities. 
E) Reports the effect of profit and dividends on retained earnings.

Question 14

Since the revenue recognition principle requires that revenues be earned,there are no unearned revenues in accrual accounting.

Accepted Answer

A) True 
 B)False

Question 15

Interim statements report a company's business activities for a one-year period.

Accepted Answer

A) True 
 B)False

Question 16

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the:

Accepted Answer

A) Income Summary account 
B) Closing account 
C) Balance column account 
D) Contra account 
E) Nominal account

Question 17

Day Co.leases an office to a tenant at the rate of $5,000 per month.The tenant contacted Day and arranged to pay the rent for December 2014 on January 8,2015.Day agrees to this arrangement.
a.Prepare the journal entry that Day must make at December 31,2014,to record the accrued rental revenue.
b.Prepare the journal entry to record the receipt of the rent on January 8,2015.

Accepted Answer

The answer of Day Co.leases an office to a tenant...

Question 18

If a prepaid expense account were not adjusted for the amount used,on the balance sheet assets would be _______________ and equity would be __________.

Accepted Answer

The answer of If a prepaid expense account were not...

Question 19

It is acceptable to record prepayment of expenses as debits to expense accounts.

Accepted Answer

A) True 
 B)False

Question 20

An asset that cost $50,000 was purchased on January 1.The asset has an estimated useful life of three years and an estimated salvage value of $3,200.Using the straight-line method,prepare the necessary adjusting journal entry for the end of the year.

Accepted Answer

The answer of An asset that cost $50,000 was purchased...

Exam 3: Adjusting Accounts for Financial Statements

Based on the following information,what would be the balance in the Retained Earnings Account,assuming all accounts have a normal balance?

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

July 31,2013,the end of the quarter is on a Wednesday.Employees get paid each Friday for the week worked.Abel Co.has five employees who earn $100 per day each.Assuming the proper adjusting journal entry was made on June 30,prepare the journal entry to record the payment of wages on August 2.

Prepare a statement of retained earnings from the adjusted trial balance of Hanson Storage.

Intangible assets are long-term resources used to produce or sell products and services; they generally lack __ and their benefits are highly .

On June 30,2014,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2014,for Apricot would include:

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

Ben and Jerry's had total assets of $149,501,000,net income of $6,242,000,and net sales of $209,203,000.Profit margin was 2.98%.

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day-to-day operations of the business is:

A trial balance prepared after adjustments have been recorded is called a(n) :

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

A company purchased a new truck at a cost of $42,000 on July 1,2014.The truck is estimated to have a useful life of 6 years and a salvage value of $3,000.Using the straight- line method,how much depreciation expense will be recorded for the truck for the year ended December 31,2014?

A classified balance sheet:

Since the revenue recognition principle requires that revenues be earned,there are no unearned revenues in accrual accounting.

Interim statements report a company's business activities for a one-year period.

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the:

If a prepaid expense account were not adjusted for the amount used,on the balance sheet assets would be _____ and equity would be .

It is acceptable to record prepayment of expenses as debits to expense accounts.

An asset that cost $50,000 was purchased on January 1.The asset has an estimated useful life of three years and an estimated salvage value of $3,200.Using the straight-line method,prepare the necessary adjusting journal entry for the end of the year.