Question 1

Match between columns
                        Premises: Prepaid insurance was used during the month.
Recorded salaries earned by employees at end of month, payment to be made early next month.
Performed services on account, payment to be received next month.
Recorded service revenue received in advance from clients.
Estimated current month's utilities bill and recorded the amount. The bill is to be received and paid next month.
Supplies were used during the month.

Accepted Answer

The Answer of deferral and accrual is...

Question 2

When a prepaid expense is initially recorded as an expense, the adjusting entry would include a:

Accepted Answer

A) debit to a contra account. 
B) debit to a prepaid expense account. 
C) debit to an unearned expense account. 
D) debit to an unearned revenue account. 
A) debit to a contra account. 
B) debit to a prepaid expense account. 
C) debit to an unearned expense account. 
D) debit to an unearned revenue account.

Question 3

Accrual accounting records the effect of every business transaction as it occurs.

Accepted Answer

A) True 
 B)False

Question 4

When a prepaid expense is recorded initially as an asset, the adjusting entry transfers the used portion of the asset to the expense account.

Accepted Answer

A) True 
 B)False

Question 5

Given the following adjustment data, state whether the resulting adjustment will be a deferral or an accrual
-Performed services on account, payment to be received next month.

Accepted Answer

A) accrual 
B) deferral 
A) accrual 
B) deferral

Question 6

An important fact related to accrual accounting is that:

Accepted Answer

A) adjusting entries are not required. 
B) revenue is recorded when cash is received. 
C) expenses are recorded when incurred. 
D) revenue is recorded when cash is received and expenses are recorded when incurred. 
A) adjusting entries are not required. 
B) revenue is recorded when cash is received. 
C) expenses are recorded when incurred. 
D) revenue is recorded when cash is received and expenses are recorded when incurred.

Question 7

All accounts in the general ledger appear on a company's:

Accepted Answer

A) income statement. 
B) balance sheet. 
C) adjusted trial balance. 
D) statement of owner's equity. 
A) income statement. 
B) balance sheet. 
C) adjusted trial balance. 
D) statement of owner's equity.

Question 8

The supplies account shows a beginning balance of $3,000. Assume the supplies account shows an entry as a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year end is $1,700. The adjusting entry involves a:

Accepted Answer

A) debit to supplies expense for $6,800. 
B) debit to supplies for $6,800. 
C) debit to supplies expense for $1,700. 
D) debit to supplies for $1,700. 
A) debit to supplies expense for $6,800. 
B) debit to supplies for $6,800. 
C) debit to supplies expense for $1,700. 
D) debit to supplies for $1,700.

Question 9

The accounting guidelines for all countries recommend:

Accepted Answer

A) the adoption of IFRS. 
B) the use of cash-basis accounting. 
C) the adoption of ASPE. 
D) the use of accrual accounting. 
A) the adoption of IFRS. 
B) the use of cash-basis accounting. 
C) the adoption of ASPE. 
D) the use of accrual accounting.

Question 10

Net income is reported on the income statement at $63,000. Adjusting entries for accrued salaries of $600 and amortization on equipment of $1,500 were accidentally omitted. The correct net income is:

Accepted Answer

A) $65,100. 
B) $62,400. 
C) $61,500. 
D) $60,900. 
A) $65,100. 
B) $62,400. 
C) $61,500. 
D) $60,900.

Question 11

Which of the following accounts is not used in cash-basis accounting?

Accepted Answer

A) payables 
B) revenue 
C) equity 
D) expenses 
A) payables 
B) revenue 
C) equity 
D) expenses

Question 12

The balance in the Office Supplies account had a debit balance on January 1, 2019, that equalled the $240 of supplies on hand. During the year, the company purchased $4,200 of supplies that were debited to the Office Supplies Expense account. The proprietor estimates that the cost of supplies remaining on hand on December 31 is $960. What is the required adjusting journal entry on December 31?

Accepted Answer

A)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies Expense } & 3,480 \
\hline \text { Cr. Office Supplies } & 3,480 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies Expense } & 960 \
\hline \text { Cr. Office Supplies } & 960 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies } & 3,480 \
\hline \text { Cr. Office Supplies } & \
\text { Expense } & 3,480 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies } & 720 \
\hline \text { Cr. Office Supplies } & 720 \
 \text { Expense } & \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies Expense } & 3,480 \
\hline \text { Cr. Office Supplies } & 3,480 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies Expense } & 960 \
\hline \text { Cr. Office Supplies } & 960 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies } & 3,480 \
\hline \text { Cr. Office Supplies } & \
\text { Expense } & 3,480 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | c | } 
\hline \text { Dr. Office Supplies } & 720 \
\hline \text { Cr. Office Supplies } & 720 \
 \text { Expense } & \
\hline
\end{array}$$

Question 13

Adjusting entries assign revenues to the period in which they are earned and expenses to the period in which they are incurred.

Accepted Answer

A) True 
 B)False

Question 14

On September 1, 2019, Two Sisters Company pays $36,000 cash for six months rent. The balance in prepaid rent on December 31, 2019, after adjustment, would be:

Accepted Answer

A) $6,000. 
B) $24,000. 
C) $12,000. 
D) $0. 
A) $6,000. 
B) $24,000. 
C) $12,000. 
D) $0.

Question 15

The financial statement that lists the revenue and expense accounts is referred to as the:

Accepted Answer

A) statement of owner's equity. 
B) balance sheet. 
C) cash flow statement. 
D) income statement. 
A) statement of owner's equity. 
B) balance sheet. 
C) cash flow statement. 
D) income statement.

Question 16

Prepare adjusting entries for the following items on December 31, the end of the fiscal year for Eddison Don Repairs. The company initially records cash received in advance of performing the service as a liability, and prepaid expenses as current assets.
a)Amortization on truck, $500
b)Services performed but unbilled, $3,000
c)Salaries owed to employees at year end, $2,500
d)Unearned service revenue earned, $5,500
e)Supplies used during the year, $200
f)Prepaid rent expired during the year, $4,500
g)Prepaid insurance now expired $400

Accepted Answer

The answer of Prepare adjusting entries for the following items...

Question 17

Sandhill Construction initially records all prepaid expenses as expenses and all unearned revenues as revenues. Given the following information, prepare the necessary adjusting entries at year end, December 31, 2019.
a)On January 3, 2019, $2,500 of supplies were purchased. A count revealed $300 still on hand at December 31, 2019.
b)On January 4, 2019, a $21,000 payment was made to an insurance agency for two and a half years of insurance.
c)On June 30, 2019, received nine months payment in advance from a customer, $16,200.
d)On August 1, 2019, received six months payment in advance from a customer, $9,600.

Accepted Answer

The answer of Sandhill Construction initially records all prepaid expenses...

Question 18

Table 3-6
  
-Refer to Table 3-6.
1. Record each transaction in the general journal.

Accepted Answer

The answer of Table 3-6
  
-Refer to Table 3-6.
1....

Question 19

Employees of Ajax Renovations work Monday through Friday and are paid every Friday for work done that week. The daily payroll is $1,200 and the last payday was Friday December 28. What is the required adjusting journal entry, if any, on December 31?

Accepted Answer

A)  $$\begin{array} { | c | l | } 
\hline \text { Dr. Wages Expense } & 1,200 \
\hline \text { Cr. Wages Payable } & 1,200 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | l | } 
\hline \text { Dr. Wages Expense } & 2,400 \
\hline \text { Cr. Wages Payable } & 2,400 \
\hline
\end{array}$$ 
C) No entry is required 
D)  $$\begin{array} { | c | l | } 
\hline \text { Dr. Wages Expense } & 3,600 \
\hline \text { Cr. Wages Payable } & 3,600 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | l | } 
\hline \text { Dr. Wages Expense } & 1,200 \
\hline \text { Cr. Wages Payable } & 1,200 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | l | } 
\hline \text { Dr. Wages Expense } & 2,400 \
\hline \text { Cr. Wages Payable } & 2,400 \
\hline
\end{array}$$ 
C) No entry is required 
D)  $$\begin{array} { | c | l | } 
\hline \text { Dr. Wages Expense } & 3,600 \
\hline \text { Cr. Wages Payable } & 3,600 \
\hline
\end{array}$$

Question 20

A business pays weekly salaries on Friday of $25,000 for a five-day week ending on Friday. Assuming the fiscal period ends on a Wednesday, the adjusting entry for accrued salaries would involve a:

Accepted Answer

A) debit to salary payable for $10,000. 
B) debit to salary expense for $15,000. 
C) credit to salary payable for $10,000. 
D) credit to salary expense for $15,000. 
A) debit to salary payable for $10,000. 
B) debit to salary expense for $15,000. 
C) credit to salary payable for $10,000. 
D) credit to salary expense for $15,000.

When a prepaid expense is initially recorded as an expense, the adjusting entry would include a:

Accrual accounting records the effect of every business transaction as it occurs.

When a prepaid expense is recorded initially as an asset, the adjusting entry transfers the used portion of the asset to the expense account.

Given the following adjustment data, state whether the resulting adjustment will be a deferral or an accrual -Performed services on account, payment to be received next month.

An important fact related to accrual accounting is that:

All accounts in the general ledger appear on a company's:

The supplies account shows a beginning balance of $3,000. Assume the supplies account shows an entry as a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year end is $1,700. The adjusting entry involves a:

The accounting guidelines for all countries recommend:

Net income is reported on the income statement at $63,000. Adjusting entries for accrued salaries of $600 and amortization on equipment of $1,500 were accidentally omitted. The correct net income is:

Which of the following accounts is not used in cash-basis accounting?

Adjusting entries assign revenues to the period in which they are earned and expenses to the period in which they are incurred.

On September 1, 2019, Two Sisters Company pays $36,000 cash for six months rent. The balance in prepaid rent on December 31, 2019, after adjustment, would be:

The financial statement that lists the revenue and expense accounts is referred to as the:

Table 3-6 -Refer to Table 3-6. 1. Record each transaction in the general journal.

Employees of Ajax Renovations work Monday through Friday and are paid every Friday for work done that week. The daily payroll is $1,200 and the last payday was Friday December 28. What is the required adjusting journal entry, if any, on December 31?

A business pays weekly salaries on Friday of $25,000 for a five-day week ending on Friday. Assuming the fiscal period ends on a Wednesday, the adjusting entry for accrued salaries would involve a:

Accounting and the Business Environment

Recording Business Transactions

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 3: Measuring Business Income: The Adjusting Process

When a prepaid expense is initially recorded as an expense, the adjusting entry would include a:

Accrual accounting records the effect of every business transaction as it occurs.

When a prepaid expense is recorded initially as an asset, the adjusting entry transfers the used portion of the asset to the expense account.

Given the following adjustment data, state whether the resulting adjustment will be a deferral or an accrual -Performed services on account, payment to be received next month.

An important fact related to accrual accounting is that:

All accounts in the general ledger appear on a company's:

The supplies account shows a beginning balance of $3,000. Assume the supplies account shows an entry as a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year end is $1,700. The adjusting entry involves a:

The accounting guidelines for all countries recommend:

Net income is reported on the income statement at $63,000. Adjusting entries for accrued salaries of $600 and amortization on equipment of $1,500 were accidentally omitted. The correct net income is:

Which of the following accounts is not used in cash-basis accounting?

Adjusting entries assign revenues to the period in which they are earned and expenses to the period in which they are incurred.

On September 1, 2019, Two Sisters Company pays $36,000 cash for six months rent. The balance in prepaid rent on December 31, 2019, after adjustment, would be:

The financial statement that lists the revenue and expense accounts is referred to as the:

Table 3-6 -Refer to Table 3-6. 1. Record each transaction in the general journal.

Employees of Ajax Renovations work Monday through Friday and are paid every Friday for work done that week. The daily payroll is $1,200 and the last payday was Friday December 28. What is the required adjusting journal entry, if any, on December 31?

A business pays weekly salaries on Friday of $25,000 for a five-day week ending on Friday. Assuming the fiscal period ends on a Wednesday, the adjusting entry for accrued salaries would involve a:

Accounting and the Business Environment

Recording Business Transactions

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters