Question 1

Interim financial reports are financial reports

Accepted Answer

A)  Covering less than one year, usually based on one- or three-month periods 
B)  That are prepared before any adjustments have been recorded 
C)  That show the assets above the liabilities and the liabilities above the equity 
D)  In which revenues are reported in the income statement when cash is received and expenses are reported when cash is paid 
E)  In which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues 
A)  Covering less than one year, usually based on one- or three-month periods 
B)  That are prepared before any adjustments have been recorded 
C)  That show the assets above the liabilities and the liabilities above the equity 
D)  In which revenues are reported in the income statement when cash is received and expenses are reported when cash is paid 
E)  In which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues

Question 2

Describe the types of entries required in later periods that result from accruals.

Accepted Answer

Accrued revenues in one period result in

Question 3

The equipment has a useful life of 8 years. Compute the book value of the equipment after the proper June adjustment has been made.

Accepted Answer

24,000/8 years/12 months = 250

Question 4

On October 15, Gallery Corp. received $12,500 as a down payment on a consulting contract. The amount was credited to Unearned Consulting Revenue. By October 31, 10% of the contract was completed. Gallery Corp. needs to prepare an adjusting entry for $1,250.

Accepted Answer

A) True 
 B)False

Question 5

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

Accepted Answer

A)  Operating expense 
B)  Prepaid expenses 
C)  Unearned expense 
D)  Accounts payable 
E)  Accrued expenses 
A)  Operating expense 
B)  Prepaid expenses 
C)  Unearned expense 
D)  Accounts payable 
E)  Accrued expenses

Question 6

The accrual basis of accounting is a system of accounting in which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues.

Accepted Answer

A) True 
 B)False

Question 7

An adjusting entry could be made for all the following except

Accepted Answer

A)  Prepaid expenses 
B)  Depreciation expense 
C)  Owner withdrawals 
D)  Unearned revenues 
E)  Accrued revenues 
A)  Prepaid expenses 
B)  Depreciation expense 
C)  Owner withdrawals 
D)  Unearned revenues 
E)  Accrued revenues

Question 8

If an accountant forgot to record depreciation on office equipment at the end of an accounting period, what is the effect on the statements prepared at that time?

Accepted Answer

A)  Assets are overstated and equity is understated. 
B)  Assets and equity are both understated. 
C)  Assets are overstated, profit is understated, and equity is overstated. 
D)  Assets, profit, and equity are understated. 
E)  Assets, profit, and equity are overstated. 
A)  Assets are overstated and equity is understated. 
B)  Assets and equity are both understated. 
C)  Assets are overstated, profit is understated, and equity is overstated. 
D)  Assets, profit, and equity are understated. 
E)  Assets, profit, and equity are overstated.

Question 9

The chief accountant was reviewing the financial statements that you had prepared for the current year with comparative results from last year. She asked you the following questions. Why is Trucking Expense so high? Why is Supplies Expense so low? Why is Unearned Revenue so high? You then investigated the records, and as a result, determined the following: The $20,000 cost of a truck was posted to Trucking Expense. Office supplies costing $1,500 were used, and the entry to record the use debited Depreciation Expense. The company had received a large payment for an order to be delivered next year. Required: Prepare the necessary journal entries to correct any errors discovered as part of the investigation.

Accepted Answer

"1. To correct the error in debiting a t

Question 10

Prepare the December 31 adjusting entry to record $450 of earned but unpaid salaries.

Accepted Answer

To record

Question 11

Computerized accounting systems should include controls to show when and where corrections are made.

Accepted Answer

A) True 
 B)False

Question 12

Salaries earned by employees, but unrecorded, are an example of an accrued expense.

Accepted Answer

A) True 
 B)False

Question 13

IFRS requires the preparation of interim financial statements.

Accepted Answer

A) True 
 B)False

Question 14

Adjusting entries are designed primarily to correct errors made by bookkeepers.

Accepted Answer

A) True 
 B)False

Question 15

Explain how accounting adjustments affect financial statements.

Accepted Answer

Without adjustments, accounts would have

Question 16

Explain the purpose of preparing adjusting entries at the end of a period.

Accepted Answer

Although all external transactions may b

Question 17

Laurey's Pet Emporium purchased equipment on January 1 for $35,000. The equipment will be used for five years, after which the estimated residual value will be $2,000. Using straight-line depreciation, what is the depreciation expense for the first year of the asset's life?

Accepted Answer

A)  $4,000 
B)  $5,600 
C)  $6,600 
D)  $7,000 
E)  $7,400 
A)  $4,000 
B)  $5,600 
C)  $6,600 
D)  $7,000 
E)  $7,400

Question 18

Attendance records showed that $2,600 of Unearned Admissions Revenue has been earned in June. Compute the balance left in the following accounts: Unearned admission revenue Admissions Revenue

Accepted Answer

Unearned admission revenue = $

Question 19

If on January 1 of this year, a company paid $12,000 rent for one year and adjusting entries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1,000.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is false?

Accepted Answer

A)  Adjusting entries are made at the end of an accounting period. 
B)  Adjusting entries are not necessary under the cash basis of accounting. 
C)  The cash account will usually be affected by adjusting entries. 
D)  Adjusting entries always affect at least one revenue or one expense account and at least one asset or liability account. 
E)  Adjusting entries are used to record the effects of internal economic events. 
A)  Adjusting entries are made at the end of an accounting period. 
B)  Adjusting entries are not necessary under the cash basis of accounting. 
C)  The cash account will usually be affected by adjusting entries. 
D)  Adjusting entries always affect at least one revenue or one expense account and at least one asset or liability account. 
E)  Adjusting entries are used to record the effects of internal economic events.

Interim financial reports are financial reports

Describe the types of entries required in later periods that result from accruals.

The equipment has a useful life of 8 years. Compute the book value of the equipment after the proper June adjustment has been made.

On October 15, Gallery Corp. received $12,500 as a down payment on a consulting contract. The amount was credited to Unearned Consulting Revenue. By October 31, 10% of the contract was completed. Gallery Corp. needs to prepare an adjusting entry for $1,250.

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

The accrual basis of accounting is a system of accounting in which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues.

An adjusting entry could be made for all the following except

If an accountant forgot to record depreciation on office equipment at the end of an accounting period, what is the effect on the statements prepared at that time?

Prepare the December 31 adjusting entry to record $450 of earned but unpaid salaries.

Computerized accounting systems should include controls to show when and where corrections are made.

Salaries earned by employees, but unrecorded, are an example of an accrued expense.

IFRS requires the preparation of interim financial statements.

Adjusting entries are designed primarily to correct errors made by bookkeepers.

Explain how accounting adjustments affect financial statements.

Explain the purpose of preparing adjusting entries at the end of a period.

Laurey's Pet Emporium purchased equipment on January 1 for $35,000. The equipment will be used for five years, after which the estimated residual value will be $2,000. Using straight-line depreciation, what is the depreciation expense for the first year of the asset's life?

Attendance records showed that $2,600 of Unearned Admissions Revenue has been earned in June. Compute the balance left in the following accounts: Unearned admission revenue Admissions Revenue

If on January 1 of this year, a company paid $12,000 rent for one year and adjusting entries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1,000.

Which of the following is false?

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

Interim financial reports are financial reports

Describe the types of entries required in later periods that result from accruals.

The equipment has a useful life of 8 years. Compute the book value of the equipment after the proper June adjustment has been made.

On October 15, Gallery Corp. received $12,500 as a down payment on a consulting contract. The amount was credited to Unearned Consulting Revenue. By October 31, 10% of the contract was completed. Gallery Corp. needs to prepare an adjusting entry for $1,250.

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

The accrual basis of accounting is a system of accounting in which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues.

An adjusting entry could be made for all the following except

If an accountant forgot to record depreciation on office equipment at the end of an accounting period, what is the effect on the statements prepared at that time?

Prepare the December 31 adjusting entry to record $450 of earned but unpaid salaries.

Computerized accounting systems should include controls to show when and where corrections are made.

Salaries earned by employees, but unrecorded, are an example of an accrued expense.

IFRS requires the preparation of interim financial statements.

Adjusting entries are designed primarily to correct errors made by bookkeepers.

Explain how accounting adjustments affect financial statements.

Explain the purpose of preparing adjusting entries at the end of a period.

Laurey's Pet Emporium purchased equipment on January 1 for $35,000. The equipment will be used for five years, after which the estimated residual value will be $2,000. Using straight-line depreciation, what is the depreciation expense for the first year of the asset's life?

Attendance records showed that $2,600 of Unearned Admissions Revenue has been earned in June. Compute the balance left in the following accounts: Unearned admission revenue Admissions Revenue

If on January 1 of this year, a company paid $12,000 rent for one year and adjusting entries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1,000.

Which of the following is false?

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