Question 1

A small company may be able to justify using a cash basis of accounting if they have

Accepted Answer

A)  sales under $1000000. 
B)  no accountants on staff. 
C)  few receivables and payables. 
D)  all sales and purchases on account. 
A)  sales under $1000000. 
B)  no accountants on staff. 
C)  few receivables and payables. 
D)  all sales and purchases on account.

Question 2

An adjusting entry always involves two balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not an accounting assumption?

Accepted Answer

A)  Integrity. 
B)  Going concern. 
C)  Periodicity. 
D)  Economic entity. 
A)  Integrity. 
B)  Going concern. 
C)  Periodicity. 
D)  Economic entity.

Question 4

Income will always be greater under the cash basis of accounting than under the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 5

Identify the impact on the balance sheet if the following information is not used to adjust the accounts.
1. Supplies consumed totaled $2750.
2. Interest accrues on notes payable at the rate of $180 per month.
3. Insurance of $470 expired during the month.
4. Plant and equipment are depreciated at the rate of $1450 per month.

Accepted Answer

1. Assets overstated and Owner's Equity

Question 6

A metal shop's employees work overtime to finish an order that is sold on March 28. The office sends a statement to the customer in early April and payment is received by mid-April. The overtime wages should be expensed in

Accepted Answer

A)  March. 
B)  April. 
C)  the period when the workers receive their checks. 
D)  either in March or April depending on when the pay period ends. 
A)  March. 
B)  April. 
C)  the period when the workers receive their checks. 
D)  either in March or April depending on when the pay period ends.

Question 7

Boneta City College sold season tickets for the 2016 football season for $250000. A total of 8 games will be played during September October and November. In September two games were played. In October three games were played. The balance in Unearned Ticket Revenue at October 31 is

Accepted Answer

A)  $0. 
B)  $50000. 
C)  $93750. 
D)  $156250. 
A)  $0. 
B)  $50000. 
C)  $93750. 
D)  $156250.

Question 8

Depreciation expense for a period is an ______________ rather than a factual measurement of cost that has expired.

Accepted Answer

The answer of Depreciation expense for a period is an...

Question 9

Match the items below by entering the appropriate code letter in the space provided.

Accepted Answer

1. B 6. H
2. D 7. C

Question 10

The time period assumption states that the business will remain in operation for the foreseeable future.

Accepted Answer

A) True 
 B)False

Question 11

Andrew is a barber who does his own accounting for his shop. When he buys supplies he routinely debits Supplies Expense. Andrew purchased $1700 of supplies in January and his inventory at the end of January shows $400 of supplies remaining. What adjusting entry should Andrew make on January 31? a.$\begin{array}{ll}
\text { Supplies Expense } &400\
 \text { Supplies } &&400\
\end{array}$

b.$\begin{array}{ll}
\text { Supplies Expense } &1,700\
 \text { Cash }&&1,700
\end{array}$

c.$\begin{array}{ll}
 \text { Supplies } &400\
\text { Supplies Expense } &&400\
\end{array}$

d.$\begin{array}{ll}
\text { Supplies Expense } &,1,300\
 \text { Supplies } &&1,300\
\end{array}$

Accepted Answer

The answer of Andrew is a barber who does his...

Question 12

In general adjusting entries are required each time financial statements are prepared.

Accepted Answer

A) True 
 B)False

Question 13

For accounting purposes business transactions should be kept separate from the personal transactions of the owners of the business.

Accepted Answer

A) True 
 B)False

Question 14

Adjusting entries are required

Accepted Answer

A)  because some costs expire with the passage of time and have not yet been journalized. 
B)  when the company's profits are below the budget. 
C)  when expenses are recorded in the period in which they are incurred. 
D)  when revenues are recorded in the period in which services are performed. 
A)  because some costs expire with the passage of time and have not yet been journalized. 
B)  when the company's profits are below the budget. 
C)  when expenses are recorded in the period in which they are incurred. 
D)  when revenues are recorded in the period in which services are performed.

Question 15

Which of the following is in accordance with generally accepted accounting principles?

Accepted Answer

A)  Accrual-basis accounting 
B)  Cash-basis accounting 
C)  Both accrual-basis and cash-basis accounting 
D)  Neither accrual-basis nor cash-basis accounting 
A)  Accrual-basis accounting 
B)  Cash-basis accounting 
C)  Both accrual-basis and cash-basis accounting 
D)  Neither accrual-basis nor cash-basis accounting

Question 16

Wallowa Company purchased supplies costing $6000 and debited Supplies for the full amount. At the end of the accounting period a physical count of supplies revealed $1800 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

Accepted Answer

A)  Debit Supplies Expense $1800; Credit Supplies $1800. 
B)  Debit Supplies $4200; Credit Supplies Expense $4200. 
C)  Debit Supplies Expense $4200; Credit Supplies $4200. 
D)  Debit Supplies $1800; Credit Supplies Expense $1800. 
A)  Debit Supplies Expense $1800; Credit Supplies $1800. 
B)  Debit Supplies $4200; Credit Supplies Expense $4200. 
C)  Debit Supplies Expense $4200; Credit Supplies $4200. 
D)  Debit Supplies $1800; Credit Supplies Expense $1800.

Question 17

On February 1 Results Income Tax Service received a $3000 cash retainer for tax preparation services to be rendered equally over the next 4 months. The full amount was credited to the liability account Unearned Service Revenue. Assuming that the revenue is recognized equally over the 4-month period what balance would be reported on the February 28 balance sheet for Unearned Service Revenue?

Accepted Answer

Revenue recognized monthly = $

Question 18

Prepare the necessary adjusting entry for each of the following:
1. Services provided but unrecorded totaled $700.
2. Accrued salaries at year-end are $1000.
3. Depreciation on equipment for the year is $600.

Accepted Answer

None

Question 19

Accrued revenues are revenues that have been recognized and received before financial statements have been prepared.

Accepted Answer

A) True 
 B)False

Question 20

Cash-basis accounting is in accordance with

Accepted Answer

A)  GAAP but not IFRS. 
B)  IFRS but not GAAP. 
C)  both IFRS and GAAP. 
D)  neither IFRS nor GAAP. 
A)  GAAP but not IFRS. 
B)  IFRS but not GAAP. 
C)  both IFRS and GAAP. 
D)  neither IFRS nor GAAP.

Exam 3: Adjusting the Accounts

A small company may be able to justify using a cash basis of accounting if they have

An adjusting entry always involves two balance sheet accounts.

Which of the following is not an accounting assumption?

Income will always be greater under the cash basis of accounting than under the accrual basis of accounting.

A metal shop's employees work overtime to finish an order that is sold on March 28. The office sends a statement to the customer in early April and payment is received by mid-April. The overtime wages should be expensed in

Boneta City College sold season tickets for the 2016 football season for $250000. A total of 8 games will be played during September October and November. In September two games were played. In October three games were played. The balance in Unearned Ticket Revenue at October 31 is

Depreciation expense for a period is an ______________ rather than a factual measurement of cost that has expired.

Match the items below by entering the appropriate code letter in the space provided.

The time period assumption states that the business will remain in operation for the foreseeable future.

In general adjusting entries are required each time financial statements are prepared.

For accounting purposes business transactions should be kept separate from the personal transactions of the owners of the business.

Adjusting entries are required

Which of the following is in accordance with generally accepted accounting principles?

Wallowa Company purchased supplies costing $6000 and debited Supplies for the full amount. At the end of the accounting period a physical count of supplies revealed $1800 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

Prepare the necessary adjusting entry for each of the following: 1. Services provided but unrecorded totaled $700. 2. Accrued salaries at year-end are $1000. 3. Depreciation on equipment for the year is $600.

Accrued revenues are revenues that have been recognized and received before financial statements have been prepared.

Cash-basis accounting is in accordance with

Accounting in Action

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Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

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