Question 1

Identify the types of adjusting entries and explain the purpose of each type.

Accepted Answer

There are two major types of adjusting e

Question 2

All items of plant and equipment, including land, eventually wear out or lose their usefulness.

Accepted Answer

A) True 
 B)False

Question 3

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Accepted Answer

A) True 
 B)False

Question 4

Under the alternative method for recording unearned revenue, the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 5

The length of time covered by periodic financial statements and other reports is the

Accepted Answer

A)  Fiscal year 
B)  Natural business year 
C)  Accounting period 
D)  Business cycle 
E)  Operating cycle 
A)  Fiscal year 
B)  Natural business year 
C)  Accounting period 
D)  Business cycle 
E)  Operating cycle

Question 6

An adjusting entry may include an entry to Cash.

Accepted Answer

A) True 
 B)False

Question 7

An adjusting entry can only affect income statement accounts.

Accepted Answer

A) True 
 B)False

Question 8

Adjusting entries are used to record the effects of internal economic events.

Accepted Answer

A) True 
 B)False

Question 9

Below is the adjusted trial balance of Reuben's Cubic Storage at December 31, 2020:
   Use the adjusted trial balance to answer the following questions:
-Prepare an income statement for the year ended December 31, 2020.

Accepted Answer

The answer of Below is the adjusted trial balance of...

Question 10

Financial statements are prepared in the following order

Accepted Answer

A)  Balance sheet, statement of changes in equity, income statement 
B)  Statement of changes in equity, balance sheet, income statement 
C)  Income statement, balance sheet, statement of changes in equity 
D)  Income statement, statement of changes in equity, balance sheet 
E)  Balance sheet, income statement, statement of changes in equity 
A)  Balance sheet, statement of changes in equity, income statement 
B)  Statement of changes in equity, balance sheet, income statement 
C)  Income statement, balance sheet, statement of changes in equity 
D)  Income statement, statement of changes in equity, balance sheet 
E)  Balance sheet, income statement, statement of changes in equity

Question 11

On July 1, 2020, Nuby Trucking Company purchased a new truck for $52,000. The truck is estimated to have a useful life of six years and a residual value of $10,000. How much depreciation expense will be recorded for the truck during the year ended December 31, 2020?

Accepted Answer

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

Question 12

Sally Company's unadjusted and adjusted trial balances on December 31, 2020, are as follows: In general journal form, prepare the adjusting entries that were recorded by Sally Company.

Accepted Answer

The answer of Sally Company's unadjusted and adjusted trial balances...

Question 13

Which of the following statements is correct?

Accepted Answer

A)  Prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities. 
B)  Accrued expenses and accrued revenues involve assets and liabilities that have not yet been recorded. 
C)  Adjusting entries are used to record both accrued expenses and accrued revenues 
D)  Prepaid expenses, depreciation, and unearned revenues require adjusting entries to record the effects of the passage of time. 
E)  All of these 
A)  Prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities. 
B)  Accrued expenses and accrued revenues involve assets and liabilities that have not yet been recorded. 
C)  Adjusting entries are used to record both accrued expenses and accrued revenues 
D)  Prepaid expenses, depreciation, and unearned revenues require adjusting entries to record the effects of the passage of time. 
E)  All of these

Question 14

Using the schedule below, indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements, and a "0" for no effect.

Accepted Answer

The answer of Using the schedule below, indicate the impact...

Question 15

Premium revenue for 2023 is

Accepted Answer

A)  $540 
B)  $1,440 
C)  $900 
D)  $60 
E)  $360 
A)  $540 
B)  $1,440 
C)  $900 
D)  $60 
E)  $360

Question 16

A trial balance prepared before any adjustments have been recorded is

Accepted Answer

A)  An adjusted trial balance 
B)  Used to prepare the financial statements 
C)  An unadjusted trial balance 
D)  Correct with respect to proper balance sheet and income statement amounts 
E)  Will not have the debits equal to the credits 
A)  An adjusted trial balance 
B)  Used to prepare the financial statements 
C)  An unadjusted trial balance 
D)  Correct with respect to proper balance sheet and income statement amounts 
E)  Will not have the debits equal to the credits

Question 17

Sweet Massage Co. unadjusted trial balance is as follows:
   Use the following information to prepare any adjusting entries required:

Accepted Answer

The answer of Sweet Massage Co. unadjusted trial balance is...

Question 18

Discuss the purpose of an adjusted trial balance.

Accepted Answer

An adjusted trial balance is a

Question 19

Before an adjusting entry for expired insurance is made, the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

Accepted Answer

A) True 
 B)False

Question 20

A Company received a $10,000 deposit from a customer for goods to be delivered the following month. Under the accrual and cash basis of accounting respectively the deposit would be recorded as

Accepted Answer

A)  Accrual Basis: a liability | Cash Basis: a liability 
B)  Accrual Basis: a liability | Cash Basis: income 
C)  Accrual Basis: income | Cash Basis: a liability 
D)  Accrual Basis: income | Cash Basis: income 
E)  Accrual Basis: an asset | Cash Basis: an asset 
A)  Accrual Basis: a liability | Cash Basis: a liability 
B)  Accrual Basis: a liability | Cash Basis: income 
C)  Accrual Basis: income | Cash Basis: a liability 
D)  Accrual Basis: income | Cash Basis: income 
E)  Accrual Basis: an asset | Cash Basis: an asset

Identify the types of adjusting entries and explain the purpose of each type.

All items of plant and equipment, including land, eventually wear out or lose their usefulness.

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Under the alternative method for recording unearned revenue, the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

The length of time covered by periodic financial statements and other reports is the

An adjusting entry may include an entry to Cash.

An adjusting entry can only affect income statement accounts.

Adjusting entries are used to record the effects of internal economic events.

Below is the adjusted trial balance of Reuben's Cubic Storage at December 31, 2020: Use the adjusted trial balance to answer the following questions: -Prepare an income statement for the year ended December 31, 2020.

Financial statements are prepared in the following order

On July 1, 2020, Nuby Trucking Company purchased a new truck for $52,000. The truck is estimated to have a useful life of six years and a residual value of $10,000. How much depreciation expense will be recorded for the truck during the year ended December 31, 2020?

Sally Company's unadjusted and adjusted trial balances on December 31, 2020, are as follows: In general journal form, prepare the adjusting entries that were recorded by Sally Company.

Which of the following statements is correct?

Using the schedule below, indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements, and a "0" for no effect.

Premium revenue for 2023 is

A trial balance prepared before any adjustments have been recorded is

Sweet Massage Co. unadjusted trial balance is as follows: Use the following information to prepare any adjusting entries required:

Discuss the purpose of an adjusted trial balance.

Before an adjusting entry for expired insurance is made, the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

A Company received a $10,000 deposit from a customer for goods to be delivered the following month. Under the accrual and cash basis of accounting respectively the deposit would be recorded as

Accounting in Business

Analyzing and Recording Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 3: Adjusting Accounts for Financial Statements

Identify the types of adjusting entries and explain the purpose of each type.

All items of plant and equipment, including land, eventually wear out or lose their usefulness.

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Under the alternative method for recording unearned revenue, the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

The length of time covered by periodic financial statements and other reports is the

An adjusting entry may include an entry to Cash.

An adjusting entry can only affect income statement accounts.

Adjusting entries are used to record the effects of internal economic events.

Below is the adjusted trial balance of Reuben's Cubic Storage at December 31, 2020: Use the adjusted trial balance to answer the following questions: -Prepare an income statement for the year ended December 31, 2020.

Financial statements are prepared in the following order

On July 1, 2020, Nuby Trucking Company purchased a new truck for $52,000. The truck is estimated to have a useful life of six years and a residual value of $10,000. How much depreciation expense will be recorded for the truck during the year ended December 31, 2020?

Sally Company's unadjusted and adjusted trial balances on December 31, 2020, are as follows: In general journal form, prepare the adjusting entries that were recorded by Sally Company.

Which of the following statements is correct?

Using the schedule below, indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements, and a "0" for no effect.

Premium revenue for 2023 is

A trial balance prepared before any adjustments have been recorded is

Sweet Massage Co. unadjusted trial balance is as follows: Use the following information to prepare any adjusting entries required:

Discuss the purpose of an adjusted trial balance.

Before an adjusting entry for expired insurance is made, the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

A Company received a $10,000 deposit from a customer for goods to be delivered the following month. Under the accrual and cash basis of accounting respectively the deposit would be recorded as

Accounting in Business

Analyzing and Recording Transactions

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters