Question 1

Characteristics associated with faithfully representative accounting information are

Accepted Answer

A)  verifiable and timely. 
B)  neutral and verifiable. 
C)  complete and neutral. 
D)  relevance and verifiable. 
A)  verifiable and timely. 
B)  neutral and verifiable. 
C)  complete and neutral. 
D)  relevance and verifiable.

Question 2

Prepare the required end-of-period adjusting entries for each independent case listed below.
Case 1
Sleater-Kinney Company began the year with a $3,000 balance in the Supplies account. During the year, $8,500 worth of additional supplies were purchased. A physical count of supplies on hand at the end of the year revealed that $7,400 worth of supplies had been used during the year. No adjusting entry has been made until year end.
Case 2
Western Company has a calendar year-end accounting period. On July 1, the company purchased equipment for $30,000. It is estimated that the equipment will depreciate $300 each month. No adjusting entry has been made until year end.
Case 3
Ranch Realty is in the business of renting several apartment buildings and prepares monthly financial statements. It has been determined that 3 tenants in $900 per month apartments and one tenant in the $1,200 per month apartment had not paid their August rent as of August 31st.

Accepted Answer

The answer of Prepare the required end-of-period adjusting entries for...

Question 3

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

Accepted Answer

A) True 
 B)False

Question 4

The adjusted trial balance of Old 97 Automotive Service Company on June 30, 2018 includes the following accounts: Supplies, $300; Accumulated Depreciation, $9,500; Salaries Payable, $1,550, Notes Payable $6,750; Service Revenue, $22,100; Salaries and Wages Expense, $8,750; Depreciation Expense, $3,250; Supplies Expense, $1,000; Rent Expense, $400; Utilities Expense, $350; and Interest Expense $250. Prepare an income statement for the month of June.

Accepted Answer

The answer of The adjusted trial balance of Old 97...

Question 5

Which of the following statements is not true?

Accepted Answer

A)  Comparability means using the same accounting principles from year to year within a company. 
B)  Faithful representation is the quality of information that gives assurance that it is free from error. 
C)  Relevant accounting information must be capable of making a difference in the decision. 
D)  The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decision. 
A)  Comparability means using the same accounting principles from year to year within a company. 
B)  Faithful representation is the quality of information that gives assurance that it is free from error. 
C)  Relevant accounting information must be capable of making a difference in the decision. 
D)  The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decision.

Question 6

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

Accepted Answer

A) True 
 B)False

Question 7

If the adjusting entry for depreciation is not made,

Accepted Answer

A)  assets will be understated. 
B)  stockholders' equity will be understated. 
C)  net income will be understated. 
D)  expenses will be understated. 
A)  assets will be understated. 
B)  stockholders' equity will be understated. 
C)  net income will be understated. 
D)  expenses will be understated.

Question 8

In developing an accounting information system, it is important to establish procedures whereby all transactions that affect the components of the accounting equation are recorded. Why then, is it often necessary to adjust the accounts before financial statements are prepared even in a properly designed accounting system? Identify the major types of adjustments that are frequently made and give a specific example of each.

Accepted Answer

Account balances must be adjusted before

Question 9

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Accepted Answer

A) True 
 B)False

Question 10

Asset prepayments become expenses when they expire.

Accepted Answer

A) True 
 B)False

Question 11

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

Accepted Answer

A) True 
 B)False

Question 12

Expenses paid and recorded in an asset account before they are used or consumed are called ______________. Revenue received and recorded as a liability before it is recognized is referred to as ______________.

Accepted Answer

prepaid ex

Question 13

Ryan Adams, an employee of Heartbreaker Corp., will not receive his paycheck until April 2. Based on services performed from March 15 to March 31, his salary was $1,000. The adjusting entry for Heartbreaker Corp. on March 31 is

Accepted Answer

The answer of Ryan Adams, an employee of Heartbreaker Corp.,...

Question 14

Every adjusting entry affects one balance sheet account and one income statement account.

Accepted Answer

A) True 
 B)False

Question 15

The Shins, a minor league baseball team, prepare financial statements on a monthly basis. Their season begins in April, but in March the team engaged in the following transactions:
(a) Paid $210,000 to Kansas City as advance rent for use of Kansas City Stadium for the six month period April 1 through September 30.
(b) Collected $450,000 cash from sales of season tickets for the team's 20 home games. This amount was credited to Unearned Ticket Revenue.
During the month of April, the Shins played four home games and five road games.
Instructions
Prepare the adjusting entries required at April 30 for the transactions above.

Accepted Answer

The answer of The Shins, a minor league baseball team,...

Question 16

On January 1, 2017, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2018, the balance in Accumulated Depreciation is

Accepted Answer

A)  $750. 
B)  $9,000. 
C)  $9,750. 
D)  $35,250. 
A)  $750. 
B)  $9,000. 
C)  $9,750. 
D)  $35,250.

Question 17

If an adjusting entry is not made for an accrued expense,

Accepted Answer

A)  expenses will be overstated. 
B)  liabilities will be understated. 
C)  net income will be understated. 
D)  stockholders' equity will be understated. 
A)  expenses will be overstated. 
B)  liabilities will be understated. 
C)  net income will be understated. 
D)  stockholders' equity will be understated.

Question 18

Yankee Hotel Foxtrot initiated operations on July 1, 2018. To manage the company officers and managers have requested monthly financial statements starting July 31, 2018. The adjusted trial balance amounts at July 31 are shown below.   (a) Determine the net income for the month of July.
(b) Determine the total assets and total liabilities at July 31, 2018 for Yankee Hotel Foxtrot.
(c) Determine the amount that appears for Retained Earnings at July 31, 2018.

Accepted Answer

The answer of Yankee Hotel Foxtrot initiated operations on July...

Question 19

Revenue recognition under IFRS is

Accepted Answer

A)  substantially different from revenue recognition under GAAP. 
B)  generally the same as revenue recognition under GAAP, but with more detailed guidance. 
C)  generally the same as revenue recognition under GAAP, but with less detailed guidance. 
D)  exactly the same as revenue recognition under GAAP.
IFRS, 
A)  substantially different from revenue recognition under GAAP. 
B)  generally the same as revenue recognition under GAAP, but with more detailed guidance. 
C)  generally the same as revenue recognition under GAAP, but with less detailed guidance. 
D)  exactly the same as revenue recognition under GAAP.
IFRS,

Question 20

The two fundamental qualities of useful information are

Accepted Answer

A)  verifiability and timeliness. 
B)  relevance and faithful representation. 
C)  comparability and flexibility. 
D)  understandability and consistency. 
A)  verifiability and timeliness. 
B)  relevance and faithful representation. 
C)  comparability and flexibility. 
D)  understandability and consistency.

Characteristics associated with faithfully representative accounting information are

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

Which of the following statements is not true?

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

If the adjusting entry for depreciation is not made,

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Asset prepayments become expenses when they expire.

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

Expenses paid and recorded in an asset account before they are used or consumed are called . Revenue received and recorded as a liability before it is recognized is referred to as .

Ryan Adams, an employee of Heartbreaker Corp., will not receive his paycheck until April 2. Based on services performed from March 15 to March 31, his salary was $1,000. The adjusting entry for Heartbreaker Corp. on March 31 is

Every adjusting entry affects one balance sheet account and one income statement account.

On January 1, 2017, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2018, the balance in Accumulated Depreciation is

If an adjusting entry is not made for an accrued expense,

Revenue recognition under IFRS is

The two fundamental qualities of useful information are

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 3: Adjusting the Accounts

Characteristics associated with faithfully representative accounting information are

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

Which of the following statements is not true?

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

If the adjusting entry for depreciation is not made,

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Asset prepayments become expenses when they expire.

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

Expenses paid and recorded in an asset account before they are used or consumed are called ______________. Revenue received and recorded as a liability before it is recognized is referred to as ______________.

Ryan Adams, an employee of Heartbreaker Corp., will not receive his paycheck until April 2. Based on services performed from March 15 to March 31, his salary was $1,000. The adjusting entry for Heartbreaker Corp. on March 31 is

Every adjusting entry affects one balance sheet account and one income statement account.

On January 1, 2017, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2018, the balance in Accumulated Depreciation is

If an adjusting entry is not made for an accrued expense,

Revenue recognition under IFRS is

The two fundamental qualities of useful information are

Accounting in Action

The Recording Process

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Expenses paid and recorded in an asset account before they are used or consumed are called . Revenue received and recorded as a liability before it is recognized is referred to as .