Question 1

A deferral adjusting entry that adjusts assets (such as prepaids and supplies):

Accepted Answer

A) decreases total assets because cash is paid at the time of the adjustment. 
B) expenses the amount used during the period. 
C) increases total assets because costs are incurred. 
D) increases total assets because cash will be received in the future. 
A) decreases total assets because cash is paid at the time of the adjustment. 
B) expenses the amount used during the period. 
C) increases total assets because costs are incurred. 
D) increases total assets because cash will be received in the future.

Question 2

What is the purpose of the closing process?

Accepted Answer

A) To record transactions for the period. 
B) To set all account balances to zero. 
C) To prepare the accounting records so they are ready to track results for the following year. 
D) To adjust for accrual and deferral transactions. 
A) To record transactions for the period. 
B) To set all account balances to zero. 
C) To prepare the accounting records so they are ready to track results for the following year. 
D) To adjust for accrual and deferral transactions.

Question 3

Which of the following statements about an adjusted trial balance is correct?

Accepted Answer

A) It is used to prepare financial statements. 
B) It is prepared to ensure assets equal liabilities. 
C) It is prepared at the beginning of the year. 
D) It is prepared before the adjusting journal entries have been made. 
A) It is used to prepare financial statements. 
B) It is prepared to ensure assets equal liabilities. 
C) It is prepared at the beginning of the year. 
D) It is prepared before the adjusting journal entries have been made.

Question 4

Which financial statement reports the dividends during the current accounting period?

Accepted Answer

A) Dividends are reported on the Income Statement. 
B) Dividends are reported on the Statement of Retained Earnings. 
C) Dividends are reported on the Balance Sheet. 
D) Dividends are not reported on any of the financial statements. 
A) Dividends are reported on the Income Statement. 
B) Dividends are reported on the Statement of Retained Earnings. 
C) Dividends are reported on the Balance Sheet. 
D) Dividends are not reported on any of the financial statements.

Question 5

If a company forgot to record depreciation on equipment for a period,Total Assets would be overstated and Total Stockholders' Equity would be overstated on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

What are the effects on the accounting equation from the adjustment for depreciation?

Accepted Answer

A) Total assets will increase and total stockholders' equity will increase. 
B) Total assets will increase and total stockholders' equity will decrease. 
C) Total assets will decrease and total stockholders' equity will decrease. 
D) Total assets will decrease and total stockholders' equity will increase. 
A) Total assets will increase and total stockholders' equity will increase. 
B) Total assets will increase and total stockholders' equity will decrease. 
C) Total assets will decrease and total stockholders' equity will decrease. 
D) Total assets will decrease and total stockholders' equity will increase.

Question 7

If the Prepaid Rent account is not adjusted at the end of the period,what effect will this have on the financial statements?

Accepted Answer

A) Liabilities will be overstated and net income will be understated. 
B) Assets will be understated and net income will be understated. 
C) Assets will be overstated and net income will be overstated. 
D) Cash will be overstated and net income will be overstated. 
A) Liabilities will be overstated and net income will be understated. 
B) Assets will be understated and net income will be understated. 
C) Assets will be overstated and net income will be overstated. 
D) Cash will be overstated and net income will be overstated.

Question 8

Match the term and its definition.There are more definitions than terms.
-Temporary Account

Accepted Answer

A) Also known as balance sheet accounts. 
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits. 
C) Lists the balances of all accounts to check that revenues equal expenses. 
D) The level of profit prior to considering income tax. 
E) An account that is paired with another account and acts to reduce its book value.
F)Converts some of an asset's or a liability's book value into an expense or a revenue.
G)An account that must have a zero balance after closing entries have been made.
H)Adds new values into the balance sheet and income statement accounts.
I)The amount at which an asset or liability is reported in the financial statements.
J)Lists the balances of all permanent accounts to check that debits equal credits.
K)A journal entry that transfers net income or loss to the Retained Earnings account.
L)When revenue minus expenses is a negative number.
M)Entries made to update existing accounts and record new events. 
A) Also known as balance sheet accounts. 
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits. 
C) Lists the balances of all accounts to check that revenues equal expenses. 
D) The level of profit prior to considering income tax. 
E) An account that is paired with another account and acts to reduce its book value.
F)Converts some of an asset's or a liability's book value into an expense or a revenue.
G)An account that must have a zero balance after closing entries have been made.
H)Adds new values into the balance sheet and income statement accounts.
I)The amount at which an asset or liability is reported in the financial statements.
J)Lists the balances of all permanent accounts to check that debits equal credits.
K)A journal entry that transfers net income or loss to the Retained Earnings account.
L)When revenue minus expenses is a negative number.
M)Entries made to update existing accounts and record new events.

Question 9

One of the purposes of the closing entries is to bring the balances in all asset,liability,revenue,and expense accounts down to zero to start the next accounting period.

Accepted Answer

A) True 
 B)False

Question 10

Interest earned and receivable on a note receivable equals $75 for the month of March.What adjusting entry,if any,should be recorded as of March 31?

Accepted Answer

A) Debit Cash $75 and credit Interest Revenue $75. 
B) Debit Interest Receivable $75 and credit Interest Revenue $75. 
C) Debit Interest Revenue $75 and credit Interest Receivable $75. 
D) No journal entry is needed at this time. 
A) Debit Cash $75 and credit Interest Revenue $75. 
B) Debit Interest Receivable $75 and credit Interest Revenue $75. 
C) Debit Interest Revenue $75 and credit Interest Receivable $75. 
D) No journal entry is needed at this time.

Question 11

The adjustment for corporate income taxes is generally the first adjustment prepared.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the accounts balance?

Accepted Answer

A) Unadjusted trial balance 
B) Adjusted trial balance 
C) Closing entries 
D) Post-closing trial balance 
A) Unadjusted trial balance 
B) Adjusted trial balance 
C) Closing entries 
D) Post-closing trial balance

Question 13

After the adjustments have been completed,the adjusted balance in the Accumulated Depreciation account represents the:

Accepted Answer

A) depreciation for the current period. 
B) total depreciation that has been recorded on the long-lived assets since their purchase. 
C) carrying value of the long-lived assets. 
D) decline in the market value of the long-lived assets. 
A) depreciation for the current period. 
B) total depreciation that has been recorded on the long-lived assets since their purchase. 
C) carrying value of the long-lived assets. 
D) decline in the market value of the long-lived assets.

Question 14

If an expense has been incurred but will be paid later,then:

Accepted Answer

A) nothing is recorded on the financial statements. 
B) a liability account is created or increased and an expense is recorded. 
C) an asset account is decreased or eliminated and an expense is recorded. 
D) a revenue and an expense are accrued. 
A) nothing is recorded on the financial statements. 
B) a liability account is created or increased and an expense is recorded. 
C) an asset account is decreased or eliminated and an expense is recorded. 
D) a revenue and an expense are accrued.

Question 15

The purpose of adjusting entries for income taxes is to record income taxes ________ the accounting period.

Accepted Answer

A) earned,but not yet collected,at the end of 
B) accrued,but not yet paid,at the end of 
C) paid during 
D) deducted from employee's pay 
A) earned,but not yet collected,at the end of 
B) accrued,but not yet paid,at the end of 
C) paid during 
D) deducted from employee's pay

Question 16

Which of the following statements about adjustments is correct?

Accepted Answer

A) An accrual adjustment that increases an asset will include an increase in an expense. 
B) A deferral adjustment that decreases an asset will include an increase in an expense. 
C) An accrual adjustment that increases an expense will include an increase in assets. 
D) A deferral adjustment that increases a contra-account will include an increase in an asset. 
A) An accrual adjustment that increases an asset will include an increase in an expense. 
B) A deferral adjustment that decreases an asset will include an increase in an expense. 
C) An accrual adjustment that increases an expense will include an increase in assets. 
D) A deferral adjustment that increases a contra-account will include an increase in an asset.

Question 17

Match the term and its definition.There are more definitions than terms.
-Net Loss

Accepted Answer

A) Also known as balance sheet accounts. 
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits. 
C) Lists the balances of all accounts to check that revenues equal expenses. 
D) The level of profit prior to considering income tax. 
E) An account that is paired with another account and acts to reduce its book value.
F)Converts some of an asset's or a liability's book value into an expense or a revenue.
G)An account that must have a zero balance after closing entries have been made.
H)Adds new values into the balance sheet and income statement accounts.
I)The amount at which an asset or liability is reported in the financial statements.
J)Lists the balances of all permanent accounts to check that debits equal credits.
K)A journal entry that transfers net income or loss to the Retained Earnings account.
L)When revenue minus expenses is a negative number.
M)Entries made to update existing accounts and record new events. 
A) Also known as balance sheet accounts. 
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits. 
C) Lists the balances of all accounts to check that revenues equal expenses. 
D) The level of profit prior to considering income tax. 
E) An account that is paired with another account and acts to reduce its book value.
F)Converts some of an asset's or a liability's book value into an expense or a revenue.
G)An account that must have a zero balance after closing entries have been made.
H)Adds new values into the balance sheet and income statement accounts.
I)The amount at which an asset or liability is reported in the financial statements.
J)Lists the balances of all permanent accounts to check that debits equal credits.
K)A journal entry that transfers net income or loss to the Retained Earnings account.
L)When revenue minus expenses is a negative number.
M)Entries made to update existing accounts and record new events.

Question 18

Match the term and its definition.There are more definitions than terms.
-Accrual Adjustment

Accepted Answer

A) Also known as balance sheet accounts. 
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits. 
C) Lists the balances of all accounts to check that revenues equal expenses. 
D) The level of profit prior to considering income tax. 
E) An account that is paired with another account and acts to reduce its book value.
F)Converts some of an asset's or a liability's book value into an expense or a revenue.
G)An account that must have a zero balance after closing entries have been made.
H)Adds new values into the balance sheet and income statement accounts.
I)The amount at which an asset or liability is reported in the financial statements.
J)Lists the balances of all permanent accounts to check that debits equal credits.
K)A journal entry that transfers net income or loss to the Retained Earnings account.
L)When revenue minus expenses is a negative number.
M)Entries made to update existing accounts and record new events. 
A) Also known as balance sheet accounts. 
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits. 
C) Lists the balances of all accounts to check that revenues equal expenses. 
D) The level of profit prior to considering income tax. 
E) An account that is paired with another account and acts to reduce its book value.
F)Converts some of an asset's or a liability's book value into an expense or a revenue.
G)An account that must have a zero balance after closing entries have been made.
H)Adds new values into the balance sheet and income statement accounts.
I)The amount at which an asset or liability is reported in the financial statements.
J)Lists the balances of all permanent accounts to check that debits equal credits.
K)A journal entry that transfers net income or loss to the Retained Earnings account.
L)When revenue minus expenses is a negative number.
M)Entries made to update existing accounts and record new events.

Question 19

If the Retained Earnings account is credited for $3,600 in the closing process,the company had a net income of $3,600.

Accepted Answer

A) True 
 B)False

Question 20

All of the accounts of the Grass is Greener Company have been adjusted as of December 31,2018,with the exception of income taxes incurred but not yet recorded.Those account balances appear below.All have normal balances.The estimated income tax rate for the company is 40%.
   Required:
a.Calculate the income before income tax.
b.Calculate the income tax expense.
c.Calculate the net income.

Accepted Answer

The answer of All of the accounts of the Grass...

A deferral adjusting entry that adjusts assets (such as prepaids and supplies):

What is the purpose of the closing process?

Which of the following statements about an adjusted trial balance is correct?

Which financial statement reports the dividends during the current accounting period?

If a company forgot to record depreciation on equipment for a period,Total Assets would be overstated and Total Stockholders' Equity would be overstated on the balance sheet.

What are the effects on the accounting equation from the adjustment for depreciation?

If the Prepaid Rent account is not adjusted at the end of the period,what effect will this have on the financial statements?

Match the term and its definition.There are more definitions than terms. -Temporary Account

One of the purposes of the closing entries is to bring the balances in all asset,liability,revenue,and expense accounts down to zero to start the next accounting period.

Interest earned and receivable on a note receivable equals $75 for the month of March.What adjusting entry,if any,should be recorded as of March 31?

The adjustment for corporate income taxes is generally the first adjustment prepared.

Which of the following is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the accounts balance?

After the adjustments have been completed,the adjusted balance in the Accumulated Depreciation account represents the:

If an expense has been incurred but will be paid later,then:

The purpose of adjusting entries for income taxes is to record income taxes ________ the accounting period.

Which of the following statements about adjustments is correct?

Match the term and its definition.There are more definitions than terms. -Net Loss

Match the term and its definition.There are more definitions than terms. -Accrual Adjustment

If the Retained Earnings account is credited for $3,600 in the closing process,the company had a net income of $3,600.

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 4: Adjustments,Financial Statements,and Financial Results

A deferral adjusting entry that adjusts assets (such as prepaids and supplies):

What is the purpose of the closing process?

Which of the following statements about an adjusted trial balance is correct?

Which financial statement reports the dividends during the current accounting period?

If a company forgot to record depreciation on equipment for a period,Total Assets would be overstated and Total Stockholders' Equity would be overstated on the balance sheet.

What are the effects on the accounting equation from the adjustment for depreciation?

If the Prepaid Rent account is not adjusted at the end of the period,what effect will this have on the financial statements?

Match the term and its definition.There are more definitions than terms. -Temporary Account

One of the purposes of the closing entries is to bring the balances in all asset,liability,revenue,and expense accounts down to zero to start the next accounting period.

Interest earned and receivable on a note receivable equals $75 for the month of March.What adjusting entry,if any,should be recorded as of March 31?

The adjustment for corporate income taxes is generally the first adjustment prepared.

Which of the following is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the accounts balance?

After the adjustments have been completed,the adjusted balance in the Accumulated Depreciation account represents the:

If an expense has been incurred but will be paid later,then:

The purpose of adjusting entries for income taxes is to record income taxes ________ the accounting period.

Which of the following statements about adjustments is correct?

Match the term and its definition.There are more definitions than terms. -Net Loss

Match the term and its definition.There are more definitions than terms. -Accrual Adjustment

If the Retained Earnings account is credited for $3,600 in the closing process,the company had a net income of $3,600.

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters