Question 1

A year end adjusted balance on a prepaid insurance account is reported in the year end financial statements as:

Accepted Answer

A)  An additional expense in the profit and loss statement. 
B)  An asset in the balance sheet. 
C)  A reduction to an expense in the profit and loss statement. 
D)  A liability in the balance sheet. 
E)  None of the above. 
A)  An additional expense in the profit and loss statement. 
B)  An asset in the balance sheet. 
C)  A reduction to an expense in the profit and loss statement. 
D)  A liability in the balance sheet. 
E)  None of the above.

Question 2

The Snow Drift ski resort pays its salaried staff $40,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 4 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

Accepted Answer

A)  Debit Wages Pending $16,000; Credit Wages Accrued $16,000 
B)  Debit Wages Accrued $16,000; Credit Wage Expense $16,000 
C)  Debit Wage Expense $16,000; Credit Wages Accrued $16,000 
D)  Debit Wage Expense $16,000; Credit Wages Pending $16,000 
E)  None of the above 
A)  Debit Wages Pending $16,000; Credit Wages Accrued $16,000 
B)  Debit Wages Accrued $16,000; Credit Wage Expense $16,000 
C)  Debit Wage Expense $16,000; Credit Wages Accrued $16,000 
D)  Debit Wage Expense $16,000; Credit Wages Pending $16,000 
E)  None of the above

Question 3

With respect to company's car 'depreciation expense' account, which of the following statements is correct?

Accepted Answer

A)  The balance on the account is off-set against the cost of cars that the company owns to give the net book value of cars in the balance sheet. 
B)  It reflects that part of a company's cars that have been expensed since the cars were purchased. 
C)  It reflects the amount of depreciation charged on company cars in the current accounting period. 
D)  It appears as a liability in the balance sheet. 
E)  None of the above statements are correct. 
A)  The balance on the account is off-set against the cost of cars that the company owns to give the net book value of cars in the balance sheet. 
B)  It reflects that part of a company's cars that have been expensed since the cars were purchased. 
C)  It reflects the amount of depreciation charged on company cars in the current accounting period. 
D)  It appears as a liability in the balance sheet. 
E)  None of the above statements are correct.

Question 4

At the end of its financial year a company has an accounts receivable balance of $320,000 and an 'allowance for doubtful accounts' credit balance of $2,100. Following a review of the company's accounts receivable ledger, the auditor has determined that 1% of the accounts receivable balance should be provided for as doubtful accounts. The year end adjusting entry required is:

Accepted Answer

A)  Debit Sales account $1,100; Credit Accounts Receivable $1,100 
B)  Debit Allowance for Doubtful Accounts $1,100; Credit Bad Debts expense $1,100. 
C)  Debit Bad Debts expense $3,200; Credit Allowance for Doubtful Accounts $3,200. 
D)  Debit Bad Debts expense $1,100; Credit Allowance for Doubtful Accounts $1,100. 
E)  None of the above 
A)  Debit Sales account $1,100; Credit Accounts Receivable $1,100 
B)  Debit Allowance for Doubtful Accounts $1,100; Credit Bad Debts expense $1,100. 
C)  Debit Bad Debts expense $3,200; Credit Allowance for Doubtful Accounts $3,200. 
D)  Debit Bad Debts expense $1,100; Credit Allowance for Doubtful Accounts $1,100. 
E)  None of the above

Question 5

On 31st December 20X1, immediately prior to entering adjusting entries, the prepaid insurance account of the White Lion Hotel has a balance of $1,200. This concerns a payment made on 30th September 20X1 for 12 months of insurance cover. The adjusting entry that needs to be made on 31st December 20X1 is:

Accepted Answer

A)  Debit prepaid insurance $300, credit insurance expense $300. 
B)  Debit prepaid insurance $1,200, credit insurance expense $1,200. 
C)  Debit insurance expense $1,200, credit prepaid insurance $1,200. 
D)  Debit insurance expense $300, credit prepaid insurance $300. 
E)  None of the above. 
A)  Debit prepaid insurance $300, credit insurance expense $300. 
B)  Debit prepaid insurance $1,200, credit insurance expense $1,200. 
C)  Debit insurance expense $1,200, credit prepaid insurance $1,200. 
D)  Debit insurance expense $300, credit prepaid insurance $300. 
E)  None of the above.

Question 6

The following information relates to the next two questions. On 1S1U1P1stS1S1P0 December the Divine Hotel received a down payment of $30,000 for a 3 day conference that it will host 31S1U1P1stS1S1P0 December - 2S1U1P1ndS1S1P0 January.
-The Divine Hotel should make the following 31st December year end adjusting entry:

Accepted Answer

A)  Debit Unearned Revenue $10,000; Credit Contingent Revenue $10,000 
B)  Debit Revenue $10,000; Credit Unearned Revenue $10,000 
C)  Debit Contingent Revenue $10,000; Credit Revenue $10,000 
D)  Debit Unearned Revenue $10,000; Credit Revenue $10,000 
E)  None of the above 
A)  Debit Unearned Revenue $10,000; Credit Contingent Revenue $10,000 
B)  Debit Revenue $10,000; Credit Unearned Revenue $10,000 
C)  Debit Contingent Revenue $10,000; Credit Revenue $10,000 
D)  Debit Unearned Revenue $10,000; Credit Revenue $10,000 
E)  None of the above

Question 7

The Snow Drift ski resort pays its salaried staff $50,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 5 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

Accepted Answer

A)  Debit Wages Expense $25,000; Credit Accounts Payable $25,000 
B)  Debit Wages Accrued $25,000; Credit Wage Expense $25,000 
C)  Debit Wage Expense $25,000; Credit Wages Accrued $25,000 
D)  Debit Wage Expense $25,000; Credit Cash $25,000 
E)  Debit Wages Accrued $25,000; Credit Cash $25,000 
A)  Debit Wages Expense $25,000; Credit Accounts Payable $25,000 
B)  Debit Wages Accrued $25,000; Credit Wage Expense $25,000 
C)  Debit Wage Expense $25,000; Credit Wages Accrued $25,000 
D)  Debit Wage Expense $25,000; Credit Cash $25,000 
E)  Debit Wages Accrued $25,000; Credit Cash $25,000

Question 8

An inventory count conducted on 31st December 20X1 indicated that Sports World had $180 of office stationery at that time. Accounting records indicate that the business had $120 of stationery at the beginning of the year and purchased $1,040 of stationery during the year. What amount should be expensed for office stationery in the year ended 31st December 20X1?

Accepted Answer

A)  $760 
B)  $1,280 
C)  $1,020 
D)  $980 
E)  None of the above 
A)  $760 
B)  $1,280 
C)  $1,020 
D)  $980 
E)  None of the above

Question 9

The Sydney Jazz Festival company made an annual insurance premium payment of $1,200 on 1st March 2011. It recorded this payment by debiting its insurance prepaid account $1,200 and crediting its cash account $1,200. The insurance adjusting entry that will need to be made at its financial year end of 31 December 2011 is:

Accepted Answer

A)  Debit Insurance Expense $200; Credit Insurance Prepaid $200 
B)  Debit Insurance Prepaid $1,000; Credit Insurance Expense $200 
C)  Debit Insurance Expense $1,000; Credit Insurance Prepaid $1,000 
D)  Debit Insurance Prepaid $200; Credit Insurance Prepaid $200 
E)  None of the above 
A)  Debit Insurance Expense $200; Credit Insurance Prepaid $200 
B)  Debit Insurance Prepaid $1,000; Credit Insurance Expense $200 
C)  Debit Insurance Expense $1,000; Credit Insurance Prepaid $1,000 
D)  Debit Insurance Prepaid $200; Credit Insurance Prepaid $200 
E)  None of the above

A year end adjusted balance on a prepaid insurance account is reported in the year end financial statements as:

The Snow Drift ski resort pays its salaried staff $40,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 4 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

With respect to company's car 'depreciation expense' account, which of the following statements is correct?

The following information relates to the next two questions. On 1^st December the Divine Hotel received a down payment of $30,000 for a 3 day conference that it will host 31^st December - 2^nd January. -The Divine Hotel should make the following 31^st December year end adjusting entry:

The Snow Drift ski resort pays its salaried staff $50,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 5 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

Introduction: Hospitality Decision Makers Use of Accounting

Analysing Transactions and Preparing Year End Financial Statements

Double Entry Accounting

Financial Statement Analysis

Internal Control

Cost Management Issues

Cost-Volume-Profit Analysis

Budgeting and Responsibility Accounting

Flexible Budgeting and Variance Analysis

Performance Measurement

Cost Information and Pricing

Working Capital Management

Investment Decision Making

Other Managerial Finance Issues

Revenue Management

Filters

Exam 4: Adjusting and Closing Entries

A year end adjusted balance on a prepaid insurance account is reported in the year end financial statements as:

The Snow Drift ski resort pays its salaried staff $40,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 4 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

With respect to company's car 'depreciation expense' account, which of the following statements is correct?

The following information relates to the next two questions. On 1st December the Divine Hotel received a down payment of $30,000 for a 3 day conference that it will host 31st December - 2nd January. -The Divine Hotel should make the following 31st December year end adjusting entry:

The Snow Drift ski resort pays its salaried staff $50,000 for 10 days work (Monday - Friday) every two weeks. The resort's financial year end falls 5 working days into its fortnightly salary payment cycle. The adjusting entry that it needs to make in connection with wages is:

Introduction: Hospitality Decision Makers Use of Accounting

Analysing Transactions and Preparing Year End Financial Statements

Double Entry Accounting

Financial Statement Analysis

Internal Control

Cost Management Issues

Cost-Volume-Profit Analysis

Budgeting and Responsibility Accounting

Flexible Budgeting and Variance Analysis

Performance Measurement

Cost Information and Pricing

Working Capital Management

Investment Decision Making

Other Managerial Finance Issues

Revenue Management

Filters

The following information relates to the next two questions. On 1^st December the Divine Hotel received a down payment of $30,000 for a 3 day conference that it will host 31^st December - 2^nd January. -The Divine Hotel should make the following 31^st December year end adjusting entry: