Question 1

If the Retained Earnings account is debited for $4,000 in the closing process,the company had a net income of $4,000.

Accepted Answer

A) True 
 B)False

Question 2

Unearned Revenue,which represents the company's obligation to honor gift cards previously issued to customers,totaled $5,500 at the beginning of the year and $7,500 at the end of the year.Customers purchased gift cards amounting to $42,000 during the year.What was the amount of gift cards redeemed by customers during the year?

Accepted Answer

A)  $40,000 
B)  $44,000 
C)  $55,000 
D)  $29,000 
A)  $40,000 
B)  $44,000 
C)  $55,000 
D)  $29,000

Question 3

Sonic Gateway purchased $1,000 of app software that is estimated to have four years of usefulness.The adjusting entry to record the amortization includes a debit to ______ and a credit to:

Accepted Answer

A)  Amortization Expense; Accumulated Amortization 
B)  Accumulated Amortization; Amortization Expense 
C)  Depreciation Expense; Accumulated Depreciation 
D)  Accumulated Depreciation; Depreciation Expense 
E)  Software; Amortization Expense 
A)  Amortization Expense; Accumulated Amortization 
B)  Accumulated Amortization; Amortization Expense 
C)  Depreciation Expense; Accumulated Depreciation 
D)  Accumulated Depreciation; Depreciation Expense 
E)  Software; Amortization Expense

Question 4

Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Accepted Answer

A)  Assets will be understated and revenues will be overstated. 
B)  Revenues will be understated and assets will be overstated. 
C)  Both revenues and assets will be overstated. 
D)  Both revenues and assets will be understated. 
A)  Assets will be understated and revenues will be overstated. 
B)  Revenues will be understated and assets will be overstated. 
C)  Both revenues and assets will be overstated. 
D)  Both revenues and assets will be understated.

Question 5

Hourly employees at Chandler Industries have worked 1,200 hours for the week at an average pay rate of $16.25 per hour.Which of the following is the required adjusting entry required?

Accepted Answer

A)  Debit Salaries and Wages Expense and credit Cash for $19,500 
B)  Debit Salaries and Wages Expense and credit Salaries and Wages Payable for $19,500 
C)  Debit Salaries and Wages Payable and credit Salaries and Wages Expense for $19,500 
D)  Debit Salaries and Wages Payable and credit Cash for $19,500 
A)  Debit Salaries and Wages Expense and credit Cash for $19,500 
B)  Debit Salaries and Wages Expense and credit Salaries and Wages Payable for $19,500 
C)  Debit Salaries and Wages Payable and credit Salaries and Wages Expense for $19,500 
D)  Debit Salaries and Wages Payable and credit Cash for $19,500

Question 6

Which of the following is the usual last step in the accounting cycle?

Accepted Answer

A)  Preparing the adjusted trial balance. 
B)  Preparing the financial statements. 
C)  Preparing a post-closing trial balance. 
D)  Preparing an unadjusted trial balance. 
A)  Preparing the adjusted trial balance. 
B)  Preparing the financial statements. 
C)  Preparing a post-closing trial balance. 
D)  Preparing an unadjusted trial balance.

Question 7

The balance of which of the following accounts appear in the credit column of an adjusted trial balance?

Accepted Answer

A)  Income Tax Payable 
B)  Depreciation Expense 
C)  Prepaid Insurance 
D)  Interest Receivable 
A)  Income Tax Payable 
B)  Depreciation Expense 
C)  Prepaid Insurance 
D)  Interest Receivable

Question 8

As a company uses supplies,an adjustment should be made to decrease an asset account and increase an expense account.

Accepted Answer

A) True 
 B)False

Question 9

To recognize the use of and benefit received from long-lived assets,such as equipment,during the accounting period,______ Expense should be recorded.

Accepted Answer

A)  Depreciation 
B)  Supplies 
C)  Accumulated Depreciation 
D)  Interest 
A)  Depreciation 
B)  Supplies 
C)  Accumulated Depreciation 
D)  Interest

Question 10

The following information was summarized from the adjusted trial balance of Reliance Yacht Repair,Inc.as of September 30,2015,the end of the company's fiscal year.
   
Required:
Part a.Prepare the closing entry for the company for the year ended September 30,2015.
Part b.Draw a T-account for the Retained Earnings account.Enter the beginning balance into the T-account,post the closing entry,and then determine the ending balance.
Part c.Prepare a post-closing trial balance at September 30,2015.

Accepted Answer

Part a
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Question 11

The adjusted trial balance should be prepared ______ the financial statements are prepared in order to prove the ______ of the debits and credits.

Accepted Answer

A)  before; equality 
B)  after; equality 
C)  after; accuracy 
D)  before; accuracy 
A)  before; equality 
B)  after; equality 
C)  after; accuracy 
D)  before; accuracy

Question 12

The temporary accounts will have zero balances in a post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 13

A company declared and paid a dividend of $8,000 this year.The entry to close the Dividend at the end of the year will include a debit to:

Accepted Answer

A)  Dividends and a credit to Cash for $8,000. 
B)  Retained Earnings and a credit to Dividends for $8,000. 
C)  Dividends and a credit to Retained Earnings for $8,000. 
D)  Dividends and a credit to Dividends Payable for $8,000. 
A)  Dividends and a credit to Cash for $8,000. 
B)  Retained Earnings and a credit to Dividends for $8,000. 
C)  Dividends and a credit to Retained Earnings for $8,000. 
D)  Dividends and a credit to Dividends Payable for $8,000.

Question 14

Permanent accounts:

Accepted Answer

A)  are not permitted under GAAP . 
B)  have their balances zeroed-out at the end of each accounting year. 
C)  do not have their year-end balance carried into the next year. 
D)  are Balance Sheet accounts. 
A)  are not permitted under GAAP . 
B)  have their balances zeroed-out at the end of each accounting year. 
C)  do not have their year-end balance carried into the next year. 
D)  are Balance Sheet accounts.

Question 15

The unadjusted trial balance of Sketch Star Makers Inc.,prepared as of December 31,2015,includes the following account balances.All of the accounts listed have normal balances.
   
The following information is also available: 
A) A count of supplies revealed $400 worth on hand at December 31, 2015.
B) An insurance policy, purchased on January 1, 2014, covers four years.
C) The equipment depreciates at a rate of $1,000 per year; no depreciation has been recorded for 2015.
D) Three-fifths (or 60%) of the amount recorded as Unearned Revenue remains unearned as of December 31, 2015
E) The accrued amount of salaries and wages at December 31, 2015 are $2,000.
Required:
Prepare the required adjustments for the company as of December 31, 2015.

Accepted Answer

The answer of The unadjusted trial balance of Sketch Star...

Question 16

Assume that the accountant neglected to analyze the company's accounts and did not prepare any adjusting entries at the end of the year.The adjusting entries that should have been made are described in the table below.
Required:
For each overlooked adjusting entry,indicate how each error impacted the amounts of total assets,total liabilities,and total stockholders' equity that were reported on the balance sheet and the amount of net income reported on the income statement.

Accepted Answer

The answer of Assume that the accountant neglected to analyze...

Question 17

Which of the following statements about an adjusted trial balance is not correct?

Accepted Answer

A)  It is prepared at the beginning of the year. 
B)  It is used to prepare financial statements. 
C)  It is prepared to ensure that total debits equals total credits 
D)  It is prepared after the adjusting journal entries have been made. 
A)  It is prepared at the beginning of the year. 
B)  It is used to prepare financial statements. 
C)  It is prepared to ensure that total debits equals total credits 
D)  It is prepared after the adjusting journal entries have been made.

Question 18

Adjusting entries are typically prepared:

Accepted Answer

A)  at the beginning of the accounting period. 
B)  at the end of the accounting period. 
C)  on a daily basis. 
D)  on a weekly basis. 
A)  at the beginning of the accounting period. 
B)  at the end of the accounting period. 
C)  on a daily basis. 
D)  on a weekly basis.

Question 19

The balance of which of the following accounts would appear in the debit column of an adjusted trial balance?

Accepted Answer

A)  Service Revenue 
B)  Dividends 
C)  Accumulated Depreciation 
D)  Unearned Revenue 
A)  Service Revenue 
B)  Dividends 
C)  Accumulated Depreciation 
D)  Unearned Revenue

Question 20

Which of the following account balances will typically be increased as a result of adjusting entries?

Accepted Answer

A)  Interest Payable 
B)  Cash 
C)  Supplies 
D)  Prepaid Rent 
A)  Interest Payable 
B)  Cash 
C)  Supplies 
D)  Prepaid Rent

If the Retained Earnings account is debited for $4,000 in the closing process,the company had a net income of $4,000.

Sonic Gateway purchased $1,000 of app software that is estimated to have four years of usefulness.The adjusting entry to record the amortization includes a debit to ______ and a credit to:

Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Hourly employees at Chandler Industries have worked 1,200 hours for the week at an average pay rate of $16.25 per hour.Which of the following is the required adjusting entry required?

Which of the following is the usual last step in the accounting cycle?

The balance of which of the following accounts appear in the credit column of an adjusted trial balance?

As a company uses supplies,an adjustment should be made to decrease an asset account and increase an expense account.

To recognize the use of and benefit received from long-lived assets,such as equipment,during the accounting period,______ Expense should be recorded.

The adjusted trial balance should be prepared the financial statements are prepared in order to prove the of the debits and credits.

The temporary accounts will have zero balances in a post-closing trial balance.

A company declared and paid a dividend of $8,000 this year.The entry to close the Dividend at the end of the year will include a debit to:

Permanent accounts:

Which of the following statements about an adjusted trial balance is not correct?

Adjusting entries are typically prepared:

The balance of which of the following accounts would appear in the debit column of an adjusted trial balance?

Which of the following account balances will typically be increased as a result of adjusting entries?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 4: Adjustments,financial Statements,and Financial Results

If the Retained Earnings account is debited for $4,000 in the closing process,the company had a net income of $4,000.

Sonic Gateway purchased $1,000 of app software that is estimated to have four years of usefulness.The adjusting entry to record the amortization includes a debit to ______ and a credit to:

Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Hourly employees at Chandler Industries have worked 1,200 hours for the week at an average pay rate of $16.25 per hour.Which of the following is the required adjusting entry required?

Which of the following is the usual last step in the accounting cycle?

The balance of which of the following accounts appear in the credit column of an adjusted trial balance?

As a company uses supplies,an adjustment should be made to decrease an asset account and increase an expense account.

To recognize the use of and benefit received from long-lived assets,such as equipment,during the accounting period,______ Expense should be recorded.

The adjusted trial balance should be prepared ______ the financial statements are prepared in order to prove the ______ of the debits and credits.

The temporary accounts will have zero balances in a post-closing trial balance.

A company declared and paid a dividend of $8,000 this year.The entry to close the Dividend at the end of the year will include a debit to:

Permanent accounts:

Which of the following statements about an adjusted trial balance is not correct?

Adjusting entries are typically prepared:

The balance of which of the following accounts would appear in the debit column of an adjusted trial balance?

Which of the following account balances will typically be increased as a result of adjusting entries?

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

The adjusted trial balance should be prepared the financial statements are prepared in order to prove the of the debits and credits.