Question 1

What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

Accepted Answer

A) assets increase and liabilities increase 
B) liabilities decrease and stockholders' equity increases 
C) assets decrease and liabilities decrease 
D) stockholders' equity increases and decreases by the same amount 
A) assets increase and liabilities increase 
B) liabilities decrease and stockholders' equity increases 
C) assets decrease and liabilities decrease 
D) stockholders' equity increases and decreases by the same amount B

Question 2

-Refer to Cabana Club. What impact will an adjustment to the Income Tax Expense account on December 31, 2020 have on the accounting equation?

Accepted Answer

The adjustment would cause a decrease in Stockholders' equity (from increasing income tax expense) and an increase in liabilities (from increasing taxes payable).

Question 3

Carithers Cleaning Service received advance payments from customers during 2019 of $24,000. At December 31, 2019, $5,000 of the advance payments still had not been earned. After the adjustments are recorded and posted at December 31, 2019, the balances in the Unearned Service Revenue and Service Revenue accounts will be: ​
Unearned Service Revenue Service Revenue

Accepted Answer

A) $0 $24,000 
B) $5,000 $19,000 
C) $5,000 $24,000 
D) $24,000 $5,000 
A) $0 $24,000 
B) $5,000 $19,000 
C) $5,000 $24,000 
D) $24,000 $5,000 B

Question 4

Failure to record accrued interest expense would result in which of the following?

Accepted Answer

A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated 
A) Assets being overstated 
B) Assets being understated 
C) Liabilities being overstated 
D) Liabilities being understated

Question 5

Chastain Park Entertainment paid salaries expense of $350,000 during 2019. However, additional salaries of $20,000 had been earned by employees, but not paid or recorded at December 31, 2019.
A)What adjusting entry is necessary at December 31, 2019?
B)Under which basis, cash, accrual, or both, would the adjustment in part A be prepared? Explain.
C)Under the accrual basis of accounting, what is the total amount of salaries expense for the year ended December 31, 2019?
D)Under the accrual basis of accounting, what is the total amount of salaries payable to be reported at December 31, 2019?
E)Under the cash basis of accounting, what is the total amount of salaries expense for the year ending December 31, 2019?
F)Under the cash basis of accounting, what is the total amount of salaries payable at December 31, 2019?

Accepted Answer

The answer of Chastain Park Entertainment paid salaries expense of...

Question 6

____________________ is the allocation of the cost of a tangible, long-term asset over its useful life to expense.

Accepted Answer

The answer of ____________________ is the allocation of the cost...

Question 7

California Condos
California Condos uses the accrual basis of accounting, and had the following account balances on its financial statements at December 31, 2019.  
-Refer to California Condos. The company reported interest receivable of $2,500 at December 31, 2019, and $0 at the beginning of 2019. How much cash did the company collect for interest during the year?

Accepted Answer

$7,500
$10,000 (Inte

Question 8

An insurance company received advance payments from clients during 2019 of $12,000. At December 31, 2019, $10,000 of the advance payments still had not been earned. After the adjustments are recorded and posted at December 31, 2019, what will the balances be in the Unearned Insurance Revenue and Insurance Revenue accounts? ​
Unearned Insurance Revenue Insurance Revenue

Accepted Answer

A) $10,000 $10,000 
B) $0 $12,000 
C) $2,000 $10,000 
D) $10,000 $2,000 
A) $10,000 $10,000 
B) $0 $12,000 
C) $2,000 $10,000 
D) $10,000 $2,000

Question 9

The balance in the account, Rent Collected in Advance, is reported as a liability on the balance sheet of the landlord.

Accepted Answer

A) True 
 B)False

Question 10

The Cash account is never part of an adjusting entry.

Accepted Answer

A) True 
 B)False

Question 11

Expenses should be matched against revenue

Accepted Answer

A) before the earnings process is complete. 
B) only after cash is collected from the customer. 
C) in the same period as the revenue that they helped generate. 
D) after payment has been made for any costs related to the revenue. 
A) before the earnings process is complete. 
B) only after cash is collected from the customer. 
C) in the same period as the revenue that they helped generate. 
D) after payment has been made for any costs related to the revenue.

Question 12

When are revenues and expenses recognized in the same accounting period that cash receipts and payments occur?

Accepted Answer

A) under the cash basis of accounting 
B) under the accrual basis of accounting 
C) under the adjusting method of accounting 
D) under the finance method 
A) under the cash basis of accounting 
B) under the accrual basis of accounting 
C) under the adjusting method of accounting 
D) under the finance method

Question 13

The following unadjusted amounts were taken from a company's accounting records at December 31, 2019:
Note Payable, 6%, 4-month, dated December 1, 2019, for $500,000
Note Receivable, 12%, 6-month, dated October 1, 2019, for $400,000
A)Prepare any adjusting entries necessary at December 31, 2019, for the notes.
B)Fill in the partial balance sheet below by showing the notes and the effects of any adjustments related to the notes.
​

Accepted Answer

The answer of The following unadjusted amounts were taken from...

Question 14

What are adjusting entries and what is their purpose?

Accepted Answer

Adjusting entries are journal entries ma

Question 15

Cambridge Cleaners started business on January 1, 2019, and immediately purchased $5,000 of supplies to use in the business. At the end of the month, 30 percent of the supplies remains unpaid and 20% are still on hand. What amounts should appear as an expense on the financial statements for January? ?
Income Statement Statement of Cash Flows

Accepted Answer

The answer of Cambridge Cleaners started business on January 1,...

Question 16

Camper City started business on January 1, 2019. Stanton performed services for customers totaling $250,000 of which 40% remain uncollected at the end of December. Under the accrual basis, what amounts would appear on the company's financial statements for 2019? ?
Income Statement Statement of Cash Flows

Accepted Answer

The answer of Camper City started business on January 1,...

Question 17

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Accepted Answer

A) True 
 B)False

Question 18

Failure to record depreciation expense for the period results in which of the following?

Accepted Answer

A) Net income being overstated. 
B) No effect on total assets. 
C) Stockholders' equity being overstated. 
D) Both a and 
A) Net income being overstated. 
B) No effect on total assets. 
C) Stockholders' equity being overstated. 
D) Both a and

Question 19

An informal schedule called a ________________ is helpful for organizing and preparing the information necessary to perform the end-of-period steps in the accounting cycle.

Accepted Answer

The answer of An informal schedule called a ________________ is...

Question 20

Adjusting entries must be made prior to the preparation of financial statements.

Accepted Answer

A) True 
 B)False

What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

-Refer to Cabana Club. What impact will an adjustment to the Income Tax Expense account on December 31, 2020 have on the accounting equation?

Failure to record accrued interest expense would result in which of the following?

____________________ is the allocation of the cost of a tangible, long-term asset over its useful life to expense.

The balance in the account, Rent Collected in Advance, is reported as a liability on the balance sheet of the landlord.

The Cash account is never part of an adjusting entry.

Expenses should be matched against revenue

When are revenues and expenses recognized in the same accounting period that cash receipts and payments occur?

What are adjusting entries and what is their purpose?

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Failure to record depreciation expense for the period results in which of the following?

An informal schedule called a ________________ is helpful for organizing and preparing the information necessary to perform the end-of-period steps in the accounting cycle.

Adjusting entries must be made prior to the preparation of financial statements.

Accounting and The Financial Statements

The Accounting Information System

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

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Exam 3: Accrual Accounting

What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

-Refer to Cabana Club. What impact will an adjustment to the Income Tax Expense account on December 31, 2020 have on the accounting equation?

Failure to record accrued interest expense would result in which of the following?

____________________ is the allocation of the cost of a tangible, long-term asset over its useful life to expense.

The balance in the account, Rent Collected in Advance, is reported as a liability on the balance sheet of the landlord.

The Cash account is never part of an adjusting entry.

Expenses should be matched against revenue

When are revenues and expenses recognized in the same accounting period that cash receipts and payments occur?

What are adjusting entries and what is their purpose?

Adjusting entries are recorded at the end of each accounting period so that net income is accurately reflected in the financial statements for the period.

Failure to record depreciation expense for the period results in which of the following?

An informal schedule called a ________________ is helpful for organizing and preparing the information necessary to perform the end-of-period steps in the accounting cycle.

Adjusting entries must be made prior to the preparation of financial statements.

Accounting and The Financial Statements

The Accounting Information System

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

Filters