Question 1

As equipment is depreciated, its book value increases and its accumulated depreciation increases.

Accepted Answer

A) True 
 B)False

Question 2

San Antonio Company's accountant just completed the work sheet; however, the Balance Sheet columns are not equal. What step(s) should the accountant perform?

Accepted Answer

A) Check to see if the amount of net income or loss is recorded in the correct column. 
B) Verify the addition of all columns. 
C) Look to see if the appropriate amounts have been recorded in the columns. 
D) Verify that the amounts have been correctly carried over from the Trial Balance columns. 
E) All of the answers listed are correct.

Question 3

Miller Co. has a net loss for the year, the net loss would be recorded

Accepted Answer

A) on the credit side of the balance sheet columns of the work sheet. 
B) on the debit side of the balance sheet columns of the work sheet. 
C) on the debit side of the income statement columns of the work sheet. 
D) none of the answers listed.

Question 4

Match the terms below with the correct definitions.
 
-Twelve consecutive months used by a business as its annual accounting period

Accepted Answer

The answer of Match the terms below with the correct...

Question 5

Which of the following would be considered a fiscal year?

Accepted Answer

A) April 1, 20-- to March 31, 20-- 
B) January 1, 20-- to March 31, 20-- 
C) October 1, 20-- to May 31, 20-- 
D) None of the answers listed

Question 6

Accounts that are partly income statement amounts and partly balance sheet amounts are called mixed accounts.

Accepted Answer

A) True 
 B)False

Question 7

The trial balance of B. C. Towe, Quick Cleaners, for the year ended December 31 is presented below.
  Data for the adjustments are as follows: 
a.Depreciation of equipment, $3,010.
b.Depreciation of van, $2,200.
c.Accrued wages, $660.
d.Insurance expired, $450.
e.Supplies remaining, $170.Instructions:

Accepted Answer

The answer of The trial balance of B. C. Towe,...

Question 8

Which of the following accounts is not adjusted?

Accepted Answer

A) Accumulated Depreciation 
B) Wages Payable 
C) Depreciation Expense 
D) Owner's Capital 
E) Prepaid Insurance

Question 9

Sweet Stuff Co. purchases equipment with a cost of $36,400 and a trade-in value of $4,000. Sweet Stuff Co. estimates that the equipment will have a useful life of 9 years. Assuming Sweet Stuff Co. records depreciation for one month using the straight-line method, the adjustment would be recorded in the work sheet as a:

Accepted Answer

A) credit to depreciation expense, $3,600. 
B) debit to depreciation expense, $300. 
C) credit to equipment, $300. 
D) credit to accumulated depreciation, $3,600.

Question 10

In which columns of a work sheet would the adjusted balance of Accumulated Depreciation appear?

Accepted Answer

A) Adjusted Trial Balance Credit, Balance Sheet Debit 
B) Adjusted Trial Balance Credit, Balance Sheet Credit 
C) Adjusted Trial Balance Credit, Income Statement Credit 
D) Adjusted Trial Balance Debit, Balance Sheet Debit 
E) Trial Balance Debit, Adjusted Trial Balance Debit

Question 11

Financial statements are prepared by taking the figures directly from the work sheet.

Accepted Answer

A) True 
 B)False

Question 12

Failure to record the entry for accrued wages results in

Accepted Answer

A) wages payable being overstated. 
B) net income being understated. 
C) wages expense being understated. 
D) total assets being understated. 
E) total assets being overstated.

Question 13

The term, accrued wages, means that

Accepted Answer

A) expenses have not been incurred and not paid. 
B) expenses have been incurred but not yet been recorded. 
C) expenses have been incurred and paid. 
D) none of the answers listed.

Question 14

The difference between the balance of the Equipment account and its related Accumulated Depreciation account is called

Accepted Answer

A) trade-in value. 
B) a contra asset. 
C) an accrued liability. 
D) an accrued asset. 
E) book value.

Question 15

Which of the following statements is true?

Accepted Answer

A) Adjusting entries contain only balance sheet accounts. 
B) Adjusting entries contain only income statement accounts. 
C) Adjusting entries contains an income statement account and a balance sheet account. 
D) none of the answers listed.

Question 16

Coffee Co. has a $3,600 balance in Prepaid Insurance that represents the premium paid in advance for a six-month liability insurance policy. Assuming that 4 months of premium is still remaining, the adjustment would be recorded in the work sheet as a:

Accepted Answer

A) credit to Insurance Expense, $2,400 
B) debit to Insurance Expense, $2,400 
C) credit to Prepaid Insurance, $1,200 
D) debit to Prepaid Insurance, $1,200

Question 17

Newkirk Company began operations on January 1. The trial balance as of December 31 is presented below.
  Data for the adjustments are as follows: 
a.The office equipment has a life of five years with an estimated trade-in value of $600 at the end of five years.
b.Weekly wages amount to $180 for a five-day week.As of December 31, three days' wages have accrued.
c.Prepaid Insurance represents a twelve-month policy beginning March 1 of the year.
d.Supplies used during December, $215.Instructions:
Record the adjusting entries for Newkirk Company in general journal form.

Accepted Answer

The answer of Newkirk Company began operations on January 1....

Question 18

Match the terms below with the correct definitions.
 
-Amount of unpaid wages owed to employees for wages earned between the last pay period end and the end of the fiscal period

Accepted Answer

The answer of Match the terms below with the correct...

Question 19

Why are adjusting entries necessary to portray a more accurate picture of a company's financial position?

Accepted Answer

The answer of Why are adjusting entries necessary to portray...

Question 20

In recording the adjusting entries for depreciation, both accounts involved are increased.

Accepted Answer

A) True 
 B)False

Exam 4: Adjusting Entries and the Work Sheet

As equipment is depreciated, its book value increases and its accumulated depreciation increases.

San Antonio Company's accountant just completed the work sheet; however, the Balance Sheet columns are not equal. What step(s) should the accountant perform?

Miller Co. has a net loss for the year, the net loss would be recorded

Match the terms below with the correct definitions. -Twelve consecutive months used by a business as its annual accounting period

Which of the following would be considered a fiscal year?

Accounts that are partly income statement amounts and partly balance sheet amounts are called mixed accounts.

The trial balance of B. C. Towe, Quick Cleaners, for the year ended December 31 is presented below. Data for the adjustments are as follows: a.Depreciation of equipment, $3,010. b.Depreciation of van, $2,200. c.Accrued wages, $660. d.Insurance expired, $450. e.Supplies remaining, $170.Instructions:

Which of the following accounts is not adjusted?

In which columns of a work sheet would the adjusted balance of Accumulated Depreciation appear?

Financial statements are prepared by taking the figures directly from the work sheet.

Failure to record the entry for accrued wages results in

The term, accrued wages, means that

The difference between the balance of the Equipment account and its related Accumulated Depreciation account is called

Which of the following statements is true?

Coffee Co. has a $3,600 balance in Prepaid Insurance that represents the premium paid in advance for a six-month liability insurance policy. Assuming that 4 months of premium is still remaining, the adjustment would be recorded in the work sheet as a:

Match the terms below with the correct definitions. -Amount of unpaid wages owed to employees for wages earned between the last pay period end and the end of the fiscal period

Why are adjusting entries necessary to portray a more accurate picture of a company's financial position?

In recording the adjusting entries for depreciation, both accounts involved are increased.