Question 1

Match the terms with the definitions.
-The third pair of amount columns on the work sheet.Used to prove the equality of the debits and credits in the general ledger accounts after making all end-of-period adjustments.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 2

An account used with a related account to bring about a decrease in the net amount of the two account balances is called a(n)

Accepted Answer

A)  contra-account. 
B)  expense account. 
C)  adjusting account. 
D)  revenue account.

Question 3

If the debits in the Income Statement columns of the work sheet total $50,000 and the credits total $60,000 before net income or net loss has been determined,the business has a net income of $10,000.

Accepted Answer

A) True 
 B)False

Question 4

Match the terms with the definitions.
-A form used to pull together all of the information needed to enter adjusting entries and prepare the financial statements.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 5

If the book value of an asset is $12,500 and the accumulated depreciation is $3,500,the original cost of the asset is

Accepted Answer

A)  $16,000. 
B)  $9,500. 
C)  $9,000. 
D)  $7,500.

Question 6

The balance sheet reports

Accepted Answer

A)  liabilities. 
B)  revenue. 
C)  expenses. 
D)  net income.

Question 7

Match the terms with the definitions.
-An account with a credit balance that is deducted from the related asset account on the balance sheet.

Accepted Answer

A) Adjusted Trial Balance columns 
B) Adjusting entries 
C) Balance Sheet columns 
D) book value 
E) contra-asset
F)depreciable cost
G)depreciation
H)fiscal year
I)historical cost principle
J)Income Statement columns
K)market value
L)matching principle
M)plant assets
N)salvage value
O)straight-line method
P)undepreciated cost
Q)useful life
R)work sheet

Question 8

When an account balance is not affected by an adjusting entry,the amount shown in the Trial Balance columns is extended directly to the Adjusted Trial Balance columns.

Accepted Answer

A) True 
 B)False

Question 9

Journalize the necessary year-end adjusting entries based on the following account balances before adjustments.
 $\begin{array}{c}

\text {Trial Balance (partial)}\
\text {December 31, 20--}\\
\begin{array}{lr}
\text { Cash } & 12,340 \
\text { Supplies } & 2,100 \
\text { Prepaid Insurance } & 1,800 \
\text { Equipment } & 34,000\
\text { Accumulated Depreciation-Equipment } & & 8,000 \
\text { Accounts Payable } & & 6,430 \
\text { Wages Expense } & 17,333& \
\text { Insur ance Expense } & 3,333 &
\end{array}
\end{array}$
 
a.
The inventory of supplies on hand at December 31,20--,was $230.
b.
The 4-month insurance premium of $1,800 was purchased on December 1,20--.
c.
The $34,000 of equipment was purchased on January 1,two years ago.It has a salvage value of $2,000.Straight-line depreciation was used to compute depreciation at the end of last year.
d.
Wages accrued at December 31,20--,were $3,700.

Accepted Answer

The answer of Journalize the necessary year-end adjusting entries based...

Question 10

A contra-asset appears on the income statement.

Accepted Answer

A) True 
 B)False

Question 11

The depreciation system used by many businesses for tax purposes is the

Accepted Answer

A)  Accelerated Cost Recovery System. 
B)  Modified Adjusted Cost Recovery System. 
C)  Modified Actual Cost Recovery System. 
D)  Modified Accelerated Cost Recovery System.

Question 12

Under the cash basis of accounting,a certain expense may be incurred in one period but not entered until the following period.

Accepted Answer

A) True 
 B)False

Question 13

If a business records revenue when it is received and records the purchase of a building as an asset and makes adjustments to allocate the cost of the building over many accounting periods,the business accounting system is a(n)

Accepted Answer

A)  accrual basis of accounting. 
B)  adjustment basis of accounting. 
C)  cash basis of accounting. 
D)  modified cash basis of accounting.

Question 14

When assets are recorded at original value,they are recorded under the

Accepted Answer

A)  historical cost principle. 
B)  original principle. 
C)  current principle. 
D)  value principle.

Question 15

The historical cost principle allows for assets to be recorded at actual cost.

Accepted Answer

A) True 
 B)False

Question 16

Recording adjustments on the work sheet has no effect on the ledger accounts.

Accepted Answer

A) True 
 B)False

Question 17

To record the purchase of assets on account under the modified cash basis of accounting method,

Accepted Answer

A)  debit the asset and credit Accounts Payable. 
B)  debit the asset and credit Cash. 
C)  debit Accounts Receivable and credit Accounts Payable. 
D)  debit Accounts Payable and credit the asset.

Question 18

The adjusting entry for the depreciation of office equipment for the period includes

Accepted Answer

A)  debiting Depreciation Expense-Office Equipment and crediting Office Equipment. 
B)  debiting Office Equipment and crediting Accumulated Depreciation-Office Equipment. 
C)  debiting Depreciation Expense-Office Equipment and crediting Accumulated Depreciation-Office Equipment. 
D)  debiting Office Equipment and crediting Depreciation Expense-Office Equipment.

Question 19

The trial balance and information for year-end adjustments for Vilardi Company are as follows:
 $\begin{array}{c}
\text {Vilardi Company}\
\text {Trial Balance}\
\text {December 31, 20--}\\
\begin{array}{lr}
 \underline{\text { Account Title }}& \underline{\text { Debit }}& \underline{ \text { Credit }}\
\text { Cash } & 15,700 \
\text { Accounts Receivable } & 9,400 \
\text { Supplies } & 6,000 \
\text { Prepaid Insurance } & 1,500 \
\text { Equipment } & 50,000\
\text { Accumulated Depreciation-Equipment } && 10,000 \
\text { Accounts Payable } && 5,400 \
\text { Wages Payable } & \
\text { Vilardi, Capital } & &29,460\
\text { Vilardi, Drawing } & 1,500 & \
\text { Service Fees } & & 63,000 \
\text { Wages Expense } & 15,100 & \
\text { Rent Expense } & 7,800 &\
\text { Supplies Expense}\
\text { Utilities Expense}&860\
\text { Insurance Expense}\
\text { Depreciation Expense-Equipment }&\underline{\quad\quad}&\underline{\quad\quad}\
&107,860&107,860
\end{array}\end{array}$ 
a.
Supplies on hand at year-end amounted to $420.
b.
The equipment costing $50,000 has an expected life of five years and no salvage value.Vilardi uses straight-line depreciation.
c.
A premium of $1,500 for a one-year insurance policy was paid on November 1.
d.
Wages earned by employees but not paid by year-end amounted to $900.
Prepare the necessary year-end adjustments on a 10-column work sheet (identify each adjustment by letter),and complete the work sheet.

Accepted Answer

The answer of The trial balance and information for year-end...

Question 20

The trial balance and information for year-end adjustments for Litton Company are as follows:
 $\begin{array}{c}
\text {Litton  Company}\
\text {Trial Balance}\
\text {December 31, 20--}\\
\begin{array}{lr}
 \underline{\text { Account Title }}& \underline{\text { Debit }}& \underline{ \text { Credit }}\
\text { Cash } & 19,780 \
\text { Accounts Receivable } & 5,500 \
\text { Supplies } & 1,500 \
\text { Prepaid Insurance } & 2,400 \
\text { Equipment } & 30,200\
\text {Accumulated Depreciation-Equipment}&&5,000\
\text {Accounts Payable}&&5,520\
\text {Wages Payable}\
\text {Litton, Capital}&&44,000\
\text {Litton, Drawing}&4,000\
\text { Service Fees }&&20,000\
 \text { Wages Expense } & 10,000 \
\text { Rent Expense } & 900 \
\text { Supplies Expense } & \
\text { Utilities Expense } & 240\
\text { Insurance Expense}\
\text { Depreciation Expense-Equipment}&\underline{\quad\quad}&\underline{\quad\quad}\
&74,520&74,520
\end{array}\end{array}$ 
a.
Ending inventory of supplies is $800 at December 31,20--.
b.
Unexpired insurance as of year-end is $600.
c.
Depreciation of equipment is $5,000.
d.
Wages earned but not paid as of year-end are $1,700.
Prepare the necessary year-end adjustments on a 10-column work sheet (identify each adjustment by letter),and complete the work sheet.

Accepted Answer

The answer of The trial balance and information for year-end...

Exam 5: Adjusting Entries and the Work Sheet

Match the terms with the definitions. -The third pair of amount columns on the work sheet.Used to prove the equality of the debits and credits in the general ledger accounts after making all end-of-period adjustments.

An account used with a related account to bring about a decrease in the net amount of the two account balances is called a(n)

If the debits in the Income Statement columns of the work sheet total $50,000 and the credits total $60,000 before net income or net loss has been determined,the business has a net income of $10,000.

Match the terms with the definitions. -A form used to pull together all of the information needed to enter adjusting entries and prepare the financial statements.

If the book value of an asset is $12,500 and the accumulated depreciation is $3,500,the original cost of the asset is

The balance sheet reports

Match the terms with the definitions. -An account with a credit balance that is deducted from the related asset account on the balance sheet.

When an account balance is not affected by an adjusting entry,the amount shown in the Trial Balance columns is extended directly to the Adjusted Trial Balance columns.

A contra-asset appears on the income statement.

The depreciation system used by many businesses for tax purposes is the

Under the cash basis of accounting,a certain expense may be incurred in one period but not entered until the following period.

If a business records revenue when it is received and records the purchase of a building as an asset and makes adjustments to allocate the cost of the building over many accounting periods,the business accounting system is a(n)

When assets are recorded at original value,they are recorded under the

The historical cost principle allows for assets to be recorded at actual cost.

Recording adjustments on the work sheet has no effect on the ledger accounts.

To record the purchase of assets on account under the modified cash basis of accounting method,

The adjusting entry for the depreciation of office equipment for the period includes