Question 1

If a debit adjustment is combined with a credit amount, the result is always a debit.

Accepted Answer

A) True 
 B)False  False

Question 2

The adjustment for depreciation was credited to Equipment and debited to Depreciation Expense. This would

Accepted Answer

A)  overstate the assets. 
B)  understate the assets. 
C)  overstate net income. 
D)  None of these are correct. 
A)  overstate the assets. 
B)  understate the assets. 
C)  overstate net income. 
D)  None of these are correct. D

Question 3

Historical cost is the same as

Accepted Answer

A)  residual value. 
B)  original cost. 
C)  accumulated depreciation. 
D)  book value. 
A)  residual value. 
B)  original cost. 
C)  accumulated depreciation. 
D)  book value. B

Question 4

Each adjustment affects

Accepted Answer

A)  the income statement. 
B)  the balance sheet. 
C)  the cash account. 
D)  both A and B are correct. 
A)  the income statement. 
B)  the balance sheet. 
C)  the cash account. 
D)  both A and B are correct.

Question 5

Adjusting journal entries

Accepted Answer

A)  close the ledger. 
B)  bring accounts up to date. 
C)  are recorded in the ledger. 
D)  are recorded before finishing the worksheet. 
A)  close the ledger. 
B)  bring accounts up to date. 
C)  are recorded in the ledger. 
D)  are recorded before finishing the worksheet.

Question 6

After the adjustment for depreciation has been made, the original cost of the equipment

Accepted Answer

A)  increases with a credit. 
B)  decreases with a debit. 
C)  remains the same. 
D)  None of these answers are correct. 
A)  increases with a credit. 
B)  decreases with a debit. 
C)  remains the same. 
D)  None of these answers are correct.

Question 7

Adjustments are necessary to update account balances for internal transactions.

Accepted Answer

A) True 
 B)False

Question 8

Using the following data, make the adjustments, and complete the worksheet for the month.
(a) Equipment costing $750 with a residual value of $150 has an expected life of 12 months.
(b) Accrued salaries of $100.
(c) Supplies ledger balance $900, supplies used $400.
Account Trial Balance Adjustments Adj. Trial Bal Inc. St'ment Balance Sheet
                    DR       CR       DR      CR      DR         CR       DR      CR        DR        CR               cash       1,000                                                                              accts. rec.       400                                                                              supplies       900                                                                              equipment       750                                                                              Accts. payable              700                                                                       capital              1,950                                                                       withdrawals       200                                                                              fees earned              900                                                                       sal. expense       300                                                                              totals       3,550

Accepted Answer

Account Trial Balanc

Question 9

The accrual of an expense was not recorded. This would

Accepted Answer

A)  overstate expenses and overstate liabilities. 
B)  overstate expenses and understate liabilities. 
C)  understate expenses and overstate liabilities. 
D)  understate expenses and understate liabilities. 
A)  overstate expenses and overstate liabilities. 
B)  overstate expenses and understate liabilities. 
C)  understate expenses and overstate liabilities. 
D)  understate expenses and understate liabilities.

Question 10

On March 1, Rosetti Company paid in advance $7,000 for seven months' rent. The March 31 adjusting entry for rent expense should include

Accepted Answer

A)  debit Rent Expense, $2,500. 
B)  credit Prepaid Rent, $3,500. 
C)  debit Rent Expense, $2,000. 
D)  debit Rent Expense, $1,000. 
A)  debit Rent Expense, $2,500. 
B)  credit Prepaid Rent, $3,500. 
C)  debit Rent Expense, $2,000. 
D)  debit Rent Expense, $1,000.

Question 11

Revenue is recorded when earned, and expenses are recorded only when paid.

Accepted Answer

A) True 
 B)False

Question 12

On the worksheet, the Income Statement debit column totaled $800 and the credit column totaled $1,200. What is the amount of Net Income?

Accepted Answer

The answer of On the worksheet, the Income Statement debit...

Question 13

Supplies and prepaid rent are assumed to have a longer life than equipment.

Accepted Answer

A) True 
 B)False

Question 14

Rent paid by your organization two months in advance is considered to be a(n)

Accepted Answer

A)  liability. 
B)  asset. 
C)  contra asset. 
D)  revenue. 
A)  liability. 
B)  asset. 
C)  contra asset. 
D)  revenue.

Question 15

When historical cost is used to record equipment, it would appear as the

Accepted Answer

A)  original cost on the balance sheet. 
B)  market value on the balance sheet. 
C)  residual value on the balance sheet. 
D)  original cost on the income statement. 
A)  original cost on the balance sheet. 
B)  market value on the balance sheet. 
C)  residual value on the balance sheet. 
D)  original cost on the income statement.

Question 16

Linda's Flowers purchased a two-year insurance policy for $2,400. The adjusting journal entry for one month is

Accepted Answer

A)  Insurance Expense 100 Prepaid Insurance 100 
B)  Prepaid Insurance 100 Insurance Expense 100 
C)  Insurance Expense 200 Prepaid Insurance 200 
D)  Prepaid Insurance 200 Insurance Expense 200 
A)  Insurance Expense 100 Prepaid Insurance 100 
B)  Prepaid Insurance 100 Insurance Expense 100 
C)  Insurance Expense 200 Prepaid Insurance 200 
D)  Prepaid Insurance 200 Insurance Expense 200

Question 17

Matt's Engineering purchased a truck for $60,000 with a residual value of $17,000 and a life expectancy of 8 years. Using straight-line depreciation, the amount of the depreciation adjustment for the first year would be

Accepted Answer

A)  $5,375. 
B)  $7,500. 
C)  $2,687. 
D)  $2,125. 
A)  $5,375. 
B)  $7,500. 
C)  $2,687. 
D)  $2,125.

Question 18

Depreciation Expense is debited when recording the depreciation for the period.

Accepted Answer

A) True 
 B)False

Question 19

Every amount needed for the balance sheet can be found on the worksheet.

Accepted Answer

A) True 
 B)False

Question 20

If Prepaid Rent for the period is not adjusted,

Accepted Answer

A)  assets will be overstated and expenses will be overstated. 
B)  assets will be overstated and expenses will be understated. 
C)  assets will be understated and expenses will be overstated. 
D)  assets will be understated and expenses will be understated. 
A)  assets will be overstated and expenses will be overstated. 
B)  assets will be overstated and expenses will be understated. 
C)  assets will be understated and expenses will be overstated. 
D)  assets will be understated and expenses will be understated.

If a debit adjustment is combined with a credit amount, the result is always a debit.

The adjustment for depreciation was credited to Equipment and debited to Depreciation Expense. This would

Historical cost is the same as

Each adjustment affects

Adjusting journal entries

After the adjustment for depreciation has been made, the original cost of the equipment

Adjustments are necessary to update account balances for internal transactions.

The accrual of an expense was not recorded. This would

On March 1, Rosetti Company paid in advance $7,000 for seven months' rent. The March 31 adjusting entry for rent expense should include

Revenue is recorded when earned, and expenses are recorded only when paid.

On the worksheet, the Income Statement debit column totaled $800 and the credit column totaled $1,200. What is the amount of Net Income?

Supplies and prepaid rent are assumed to have a longer life than equipment.

Rent paid by your organization two months in advance is considered to be a(n)

When historical cost is used to record equipment, it would appear as the

Linda's Flowers purchased a two-year insurance policy for $2,400. The adjusting journal entry for one month is

Matt's Engineering purchased a truck for $60,000 with a residual value of $17,000 and a life expectancy of 8 years. Using straight-line depreciation, the amount of the depreciation adjustment for the first year would be

Depreciation Expense is debited when recording the depreciation for the period.

Every amount needed for the balance sheet can be found on the worksheet.

If Prepaid Rent for the period is not adjusted,

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters

	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR
cash	1,000
accts. rec.	400
supplies	900
equipment	750
Accts. payable		700
capital		1,950
withdrawals	200
fees earned		900
sal. expense	300
totals	3,550

Exam 4: The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

If a debit adjustment is combined with a credit amount, the result is always a debit.

The adjustment for depreciation was credited to Equipment and debited to Depreciation Expense. This would

Historical cost is the same as

Each adjustment affects

Adjusting journal entries

After the adjustment for depreciation has been made, the original cost of the equipment

Adjustments are necessary to update account balances for internal transactions.

The accrual of an expense was not recorded. This would

On March 1, Rosetti Company paid in advance $7,000 for seven months' rent. The March 31 adjusting entry for rent expense should include

Revenue is recorded when earned, and expenses are recorded only when paid.

On the worksheet, the Income Statement debit column totaled $800 and the credit column totaled $1,200. What is the amount of Net Income?

Supplies and prepaid rent are assumed to have a longer life than equipment.

Rent paid by your organization two months in advance is considered to be a(n)

When historical cost is used to record equipment, it would appear as the

Linda's Flowers purchased a two-year insurance policy for $2,400. The adjusting journal entry for one month is

Matt's Engineering purchased a truck for $60,000 with a residual value of $17,000 and a life expectancy of 8 years. Using straight-line depreciation, the amount of the depreciation adjustment for the first year would be

Depreciation Expense is debited when recording the depreciation for the period.

Every amount needed for the balance sheet can be found on the worksheet.

If Prepaid Rent for the period is not adjusted,

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters