Question 1

As Prepaid Rent Expense is used, the asset becomes a(n):

Accepted Answer

A)  liability. 
B)  expense. 
C)  contra-asset. 
D)  contra-revenue. 
A)  liability. 
B)  expense. 
C)  contra-asset. 
D)  contra-revenue. B

Question 2

An adjustment for Prepaid Rent Expense would indicate:

Accepted Answer

A)  the amount originally paid. 
B)  the amount expired. 
C)  the amount of the ending balance. 
D)  the amount of the beginning balance. 
A)  the amount originally paid. 
B)  the amount expired. 
C)  the amount of the ending balance. 
D)  the amount of the beginning balance. B

Question 3

The capital balance amount shown in the balance sheet column of the worksheet represents:

Accepted Answer

A)  the beginning capital plus net income interest. 
B)  the beginning capital plus net income less withdrawal. 
C)  the beginning capital less withdrawals plus any investments to capital during the period. 
D)  the beginning capital plus any investments to capital that occurred during the period. 
A)  the beginning capital plus net income interest. 
B)  the beginning capital plus net income less withdrawal. 
C)  the beginning capital less withdrawals plus any investments to capital during the period. 
D)  the beginning capital plus any investments to capital that occurred during the period. D

Question 4

If an adjustment to Supplies is not made, the balance in the Supplies account will be understated.

Accepted Answer

A) True 
 B)False

Question 5

Equipment with a cost of $590,000 has an accumulated depreciation of $350,000. What is the book value of the equipment?

Accepted Answer

A)  $306,250 
B)  $43,750 
C)  $240,000 
D)  $120,000 
A)  $306,250 
B)  $43,750 
C)  $240,000 
D)  $120,000

Question 6

When original cost is used in the accounting records, the book value of the asset is:

Accepted Answer

A)  the original cost. 
B)  the market value. 
C)  original cost less accumulated depreciation. 
D)  closed out. 
A)  the original cost. 
B)  the market value. 
C)  original cost less accumulated depreciation. 
D)  closed out.

Question 7

When historical cost is used to record equipment, it would appear as the:

Accepted Answer

A)  original cost in an asset account on the balance sheet. 
B)  residual value in the Stockholders Equity account. 
C)  residual value in an asset account on the balance sheet. 
D)  original cost on the income statement. 
A)  original cost in an asset account on the balance sheet. 
B)  residual value in the Stockholders Equity account. 
C)  residual value in an asset account on the balance sheet. 
D)  original cost on the income statement.

Question 8

It's the end of the accounting period and no electric bill has been received (but the expense has been incurred); you should record an entry that:

Accepted Answer

A)  increases the total revenue and increases the total expenses. 
B)  decreases the total assets and increases the total expenses. 
C)  increases the total liabilities and increases the total expenses. 
D)  decreases the total liabilities and increases the total expenses. 
A)  increases the total revenue and increases the total expenses. 
B)  decreases the total assets and increases the total expenses. 
C)  increases the total liabilities and increases the total expenses. 
D)  decreases the total liabilities and increases the total expenses.

Question 9

Withdrawals would most likely be found in which column of the worksheet?

Accepted Answer

A)  Income Statement 
B)  Balance Sheet 
C)  Trial Balance 
D)  Owner's Equity Statement. 
A)  Income Statement 
B)  Balance Sheet 
C)  Trial Balance 
D)  Owner's Equity Statement.

Question 10

Adjusting entries affect:

Accepted Answer

A)  the balance sheet. 
B)  the income statement. 
C)  the cash account. 
D)  Both A and B are correct. 
A)  the balance sheet. 
B)  the income statement. 
C)  the cash account. 
D)  Both A and B are correct.

Question 11

Adjustments are necessary to update account balances for internal transactions.

Accepted Answer

A) True 
 B)False

Question 12

The adjusted trial balance columns:

Accepted Answer

A)  help to ensure the ledger is still in balance. 
B)  help to identify any errors that may have been made during adjustment. 
C)  show updated account balances to aid in preparation of the financial statements. 
D)  All of the above are correct. 
A)  help to ensure the ledger is still in balance. 
B)  help to identify any errors that may have been made during adjustment. 
C)  show updated account balances to aid in preparation of the financial statements. 
D)  All of the above are correct.

Question 13

Which of the following accounts would most likely NOT need to be adjusted at the end of the year?

Accepted Answer

A)  Office Supplies 
B)  Salaries Payable 
C)  Accumulated Depreciation 
D)  Cash 
A)  Office Supplies 
B)  Salaries Payable 
C)  Accumulated Depreciation 
D)  Cash

Question 14

Which of the following would be an example of a contra-asset?

Accepted Answer

A)  Depreciation Expense 
B)  Unearned Revenue 
C)  Accumulated Depreciation 
D)  Discount on Bonds 
A)  Depreciation Expense 
B)  Unearned Revenue 
C)  Accumulated Depreciation 
D)  Discount on Bonds

Question 15

Given the income statement columns and the balance sheet columns of the worksheet, prepare a balance sheet dated December 31, 200X, for Bear Company.

Accepted Answer

The answer of Given the income statement columns and the...

Question 16

If the Supplies account is NOT adjusted:

Accepted Answer

A)  assets will be overstated and expenses will be understated. 
B)  assets will be overstated and expenses will be overstated. 
C)  assets will be understated and expenses will be overstated. 
D)  assets will be understated and expenses will be understated. 
A)  assets will be overstated and expenses will be understated. 
B)  assets will be overstated and expenses will be overstated. 
C)  assets will be understated and expenses will be overstated. 
D)  assets will be understated and expenses will be understated.

Question 17

The depreciation of equipment will require an adjustment that results in:

Accepted Answer

A)  total assets and total expenses increasing. 
B)  total assets increasing and total expenses decreasing. 
C)  total assets and revenue decreasing. 
D)  total assets decreasing and total expenses increasing. 
A)  total assets and total expenses increasing. 
B)  total assets increasing and total expenses decreasing. 
C)  total assets and revenue decreasing. 
D)  total assets decreasing and total expenses increasing.

Question 18

Residual value is the:

Accepted Answer

A)  estimated value of the asset when it is purchased. 
B)  estimated value of the asset at the end of its useful life. 
C)  cost of the asset. 
D)  same as book value. 
A)  estimated value of the asset when it is purchased. 
B)  estimated value of the asset at the end of its useful life. 
C)  cost of the asset. 
D)  same as book value.

Question 19

If the adjustment for Supplies used during the period was NOT made:

Accepted Answer

A)  expenses would be too low. 
B)  assets would be too low. 
C)  expenses would be too high. 
D)  revenue would be too low. 
A)  expenses would be too low. 
B)  assets would be too low. 
C)  expenses would be too high. 
D)  revenue would be too low.

Question 20

Which of the following is most likely to result in an adjusting entry at the end of the period?

Accepted Answer

A)  Payment of two months' insurance in advance 
B)  Payment of one month's rent 
C)  Owner's withdrawals 
D)  Owner's investment 
A)  Payment of two months' insurance in advance 
B)  Payment of one month's rent 
C)  Owner's withdrawals 
D)  Owner's investment

Exam 4: The Accounting Cycle Continued

As Prepaid Rent Expense is used, the asset becomes a(n):

An adjustment for Prepaid Rent Expense would indicate:

The capital balance amount shown in the balance sheet column of the worksheet represents:

If an adjustment to Supplies is not made, the balance in the Supplies account will be understated.

Equipment with a cost of $590,000 has an accumulated depreciation of $350,000. What is the book value of the equipment?

When original cost is used in the accounting records, the book value of the asset is:

When historical cost is used to record equipment, it would appear as the:

It's the end of the accounting period and no electric bill has been received (but the expense has been incurred); you should record an entry that:

Withdrawals would most likely be found in which column of the worksheet?

Adjusting entries affect:

Adjustments are necessary to update account balances for internal transactions.

The adjusted trial balance columns:

Which of the following accounts would most likely NOT need to be adjusted at the end of the year?

Which of the following would be an example of a contra-asset?

Given the income statement columns and the balance sheet columns of the worksheet, prepare a balance sheet dated December 31, 200X, for Bear Company.

If the Supplies account is NOT adjusted:

The depreciation of equipment will require an adjustment that results in:

Residual value is the:

If the adjustment for Supplies used during the period was NOT made:

Which of the following is most likely to result in an adjusting entry at the end of the period?

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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