Question 1

Discuss the importance of periodic reporting and the timeliness principle.

Accepted Answer

For information to be valuable to decisi

Question 2

Even if no errors have been detected in the processing of accounting data, adjusting entries may be needed at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Question 3

If you fail to record accrued salaries at the end of the month, profit for the month will be overstated.

Accepted Answer

A) True 
 B)False

Question 4

Generally, accrual basis accounting results in a more accurate measurement of profit the period than does cash basis accounting.

Accepted Answer

A) True 
 B)False

Question 5

Zang Company had no office supplies on hand at the beginning of the year. During the year, the company purchased $250 worth of office supplies. At the end of the year, $50 worth of office supplies were on hand. How much should Zang Company report as office supplies expense for the year?

Accepted Answer

A)  $75 
B)  $125 
C)  $175 
D)  $200 
E)  $325 
A)  $75 
B)  $125 
C)  $175 
D)  $200 
E)  $325

Question 6

If the accountant failed to make an adjusting entry at the end of the period to record depreciation for the period, the omission will cause

Accepted Answer

A)  an overstatement of expenses 
B)  an overstatement of revenues 
C)  an understatement of assets 
D)  an overstatement of liabilities 
E)  an overstatement of assets 
A)  an overstatement of expenses 
B)  an overstatement of revenues 
C)  an understatement of assets 
D)  an overstatement of liabilities 
E)  an overstatement of assets

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)  Timeliness principle 
D)  Cost principle 
E)  Going concern principle 
A)  Matching principle 
B)  Revenue recognition principle 
C)  Timeliness principle 
D)  Cost principle 
E)  Going concern principle

Question 8

Adjusting entries are required to match revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 9

Lightning Advisory Service's unadjusted and adjusted trial balances on December 31, 2020 are as follows:

Accepted Answer

@#IMG-DLM& In general journal form, prep

Question 10

The economic effect of an expense is incurred when the benefit expires or is used up, not when cash is paid.

Accepted Answer

A) True 
 B)False

Question 11

Under the alternative method for recording prepaid expenses, the purchase of insurance for cash would be recorded as a debit to Cash and a credit to Prepaid Insurance.

Accepted Answer

A) True 
 B)False

Question 12

Discuss the two alternate methods used to account for prepaid expenses.

Accepted Answer

The answer of Discuss the two alternate methods used to...

Question 13

The total amount of depreciation recorded for an asset during the entire time the asset has been owned

Accepted Answer

A)  Is not shown on the balance sheet 
B)  Is referred to as accumulated depreciation 
C)  Is shown on the income statement 
D)  Is shown on the statement of changes in equity 
E)  Is recorded in a liability account 
A)  Is not shown on the balance sheet 
B)  Is referred to as accumulated depreciation 
C)  Is shown on the income statement 
D)  Is shown on the statement of changes in equity 
E)  Is recorded in a liability account

Question 14

Explain the difference between the book value and the market value of an asset.

Accepted Answer

The book value of an asset is its cost m

Question 15

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 a statement of changes in equity for the year ended December 31, 2020. Mr. Clausen's capital account balance of $10,000 consists of a $5,000 balance on January 1, 2020, plus an additional $5,000 investment during 2020.

Accepted Answer

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

Question 16

The natural business year can only be used when the seasonal variation in sales does not match the calendar year.

Accepted Answer

A) True 
 B)False

Question 17

A receipt of $15,700 cash from a customer as a payment on account was incorrectly credit to service revenue. Which is the effect of this error on the company's financial statements?

Accepted Answer

A)  Assets are overstated by $31,400 and owners' equity is overstated by $31,400. 
B)  Assets are understated by $15,700 and owners' equity is understated by $15,700. 
C)  Assets are understated by $15,700 and liabilities are understated by $15,700. 
D)  Assets are overstated by $15,700 and owners' equity is overstated by $15,700. 
E)  Assets are understated by $31,400 and liabilities are understated by $31,400. 
A)  Assets are overstated by $31,400 and owners' equity is overstated by $31,400. 
B)  Assets are understated by $15,700 and owners' equity is understated by $15,700. 
C)  Assets are understated by $15,700 and liabilities are understated by $15,700. 
D)  Assets are overstated by $15,700 and owners' equity is overstated by $15,700. 
E)  Assets are understated by $31,400 and liabilities are understated by $31,400.

Question 18

Discuss the types of adjusting entries used for accrued expenses and accrued revenues.

Accepted Answer

Accrued expenses are expenses that have

Question 19

The accrual basis of accounting reflects the understanding that the economic effect of revenue generally occurs when it is earned, not when cash is received.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is incorrect?

Accepted Answer

A)  An adjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments. 
B)  Interim financial reports can be based on one-month or three-month accounting periods. 
C)  The fiscal year is any 12 consecutive months used by a business as its annual accounting period. 
D)  Property, plant, and equipment are long term assets. 
E)  The cash basis of accounting is consistent with GAAP. 
A)  An adjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments. 
B)  Interim financial reports can be based on one-month or three-month accounting periods. 
C)  The fiscal year is any 12 consecutive months used by a business as its annual accounting period. 
D)  Property, plant, and equipment are long term assets. 
E)  The cash basis of accounting is consistent with GAAP.

Discuss the importance of periodic reporting and the timeliness principle.

Even if no errors have been detected in the processing of accounting data, adjusting entries may be needed at the end of an accounting period.

If you fail to record accrued salaries at the end of the month, profit for the month will be overstated.

Generally, accrual basis accounting results in a more accurate measurement of profit the period than does cash basis accounting.

Zang Company had no office supplies on hand at the beginning of the year. During the year, the company purchased $250 worth of office supplies. At the end of the year, $50 worth of office supplies were on hand. How much should Zang Company report as office supplies expense for the year?

If the accountant failed to make an adjusting entry at the end of the period to record depreciation for the period, the omission will cause

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

Adjusting entries are required to match revenues and expenses.

Lightning Advisory Service's unadjusted and adjusted trial balances on December 31, 2020 are as follows:

The economic effect of an expense is incurred when the benefit expires or is used up, not when cash is paid.

Under the alternative method for recording prepaid expenses, the purchase of insurance for cash would be recorded as a debit to Cash and a credit to Prepaid Insurance.

Discuss the two alternate methods used to account for prepaid expenses.

The total amount of depreciation recorded for an asset during the entire time the asset has been owned

Explain the difference between the book value and the market value of an asset.

The natural business year can only be used when the seasonal variation in sales does not match the calendar year.

A receipt of $15,700 cash from a customer as a payment on account was incorrectly credit to service revenue. Which is the effect of this error on the company's financial statements?

Discuss the types of adjusting entries used for accrued expenses and accrued revenues.

The accrual basis of accounting reflects the understanding that the economic effect of revenue generally occurs when it is earned, not when cash is received.

Which of the following statements is incorrect?

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

Discuss the importance of periodic reporting and the timeliness principle.

Even if no errors have been detected in the processing of accounting data, adjusting entries may be needed at the end of an accounting period.

If you fail to record accrued salaries at the end of the month, profit for the month will be overstated.

Generally, accrual basis accounting results in a more accurate measurement of profit the period than does cash basis accounting.

Zang Company had no office supplies on hand at the beginning of the year. During the year, the company purchased $250 worth of office supplies. At the end of the year, $50 worth of office supplies were on hand. How much should Zang Company report as office supplies expense for the year?

If the accountant failed to make an adjusting entry at the end of the period to record depreciation for the period, the omission will cause

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

Adjusting entries are required to match revenues and expenses.

Lightning Advisory Service's unadjusted and adjusted trial balances on December 31, 2020 are as follows:

The economic effect of an expense is incurred when the benefit expires or is used up, not when cash is paid.

Under the alternative method for recording prepaid expenses, the purchase of insurance for cash would be recorded as a debit to Cash and a credit to Prepaid Insurance.

Discuss the two alternate methods used to account for prepaid expenses.

The total amount of depreciation recorded for an asset during the entire time the asset has been owned

Explain the difference between the book value and the market value of an asset.

The natural business year can only be used when the seasonal variation in sales does not match the calendar year.

A receipt of $15,700 cash from a customer as a payment on account was incorrectly credit to service revenue. Which is the effect of this error on the company's financial statements?

Discuss the types of adjusting entries used for accrued expenses and accrued revenues.

The accrual basis of accounting reflects the understanding that the economic effect of revenue generally occurs when it is earned, not when cash is received.

Which of the following statements is incorrect?

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