Question 1

Which of the following journal entries was created as the result of a deferral?

Accepted Answer

A)  Unearned revenue
$ \quad $$ \quad $Revenue 
B)  Interest expense
$ \quad $$ \quad $Interest payable 
C)  Cash
$ \quad $Revenue 
D)  Salaries expense
$ \quad $Cash 
A)  Unearned revenue
$ \quad $$ \quad $Revenue 
B)  Interest expense
$ \quad $$ \quad $Interest payable 
C)  Cash
$ \quad $Revenue 
D)  Salaries expense
$ \quad $Cash

Question 2

The adjusting entry to record an accrued expense results in a decrease in both assets and stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 3

On July 1,2011,Bass Company paid a two-year insurance premium.On that date the following journal entry was made:
 $$\begin{array} { l l l } 
\text { Prepaid insurance } & 4,800 & \
\quad \text { Cash } & & 4,800
\end{array}$$ The annual accounting period ends on December 31,2011.
A.How much of the premium should be reported as expense on the 2011 income statement?
B.What is the amount of prepaid insurance which should be reported on the balance sheet at December 31,2011?
C.Prepare the adjusting entry that should be made on December 31,2011,assuming no adjusting entries have been made during the year.

Accepted Answer

A. To determine how much of the premium

Question 4

The CHS Company paid $30,000 cash to its landlord on November 1,2011 for rent covering the six-month period from November 1,2011 through April 30,2012.Which of the following doesn't correctly describe the effect of the December 31,2011 adjusting entry on CHS Company's financial statements? (Assume that no adjusting entries have been made during the year.)

Accepted Answer

A) Net income decreases $10,000. 
B) Prepaid rent decreases $10,000. 
C) Rent expense increases $10,000. 
D) Stockholders' equity increases $10,000. 
A) Net income decreases $10,000. 
B) Prepaid rent decreases $10,000. 
C) Rent expense increases $10,000. 
D) Stockholders' equity increases $10,000.

Question 5

The declaration and payment of a $5,000 dividend by JLH Company would be reported on which of JLH's financial statements?

Accepted Answer

A) The income statement only. 
B) The statement of stockholders' equity and statement of cash flows. 
C) The balance sheet only. 
D) The statement of stockholders' equity only. 
A) The income statement only. 
B) The statement of stockholders' equity and statement of cash flows. 
C) The balance sheet only. 
D) The statement of stockholders' equity only.

Question 6

The adjusting entry to record accrued revenues results in an increase in assets and stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 7

On September 1,2011,Fast Track,Inc.was started with $30,000 invested by the owners as contributed capital.On September 30,2011,the accounting records contained the following amounts:
 $\begin{array}{lrlr}
\text { Accounts payable } & \$ 2,200 & \text { Dividends declared and } & \$ 2,300 \
 &  & \text { paid } &  \
\text { Accounts receivable }&2,200 & \text { Office equipment } & 25,000 \
\text { Accumulated depreciation } & 500 & \text { Office supplies inventory  } & 1,750 \
\text { Cash } & 10,000 & \text { Office supplies expense } & 600 \
\text { Consulting fees revenue } & 19,200 & \text { Rent expense } & 2,400 \
\text { Contributed capital } & 30,000 & \text { Salary expense } & 6,900 \
\text { Depreciation expense } & 500 & \text { Telephone expense } & 250
\end{array}$ Prepare a statement of stockholders' equity for September,the first month of operation.Ignore income taxes.

Accepted Answer

Statement of Stockholders' Equity
For th

Question 8

Which of the following correctly describes the effects of recording prepaid insurance when cash is paid to purchase an insurance policy?

Accepted Answer

A) Total assets do not change. 
B) Net income decreases. 
C) Liabilities are decreased. 
D) Stockholders' equity decreases. 
A) Total assets do not change. 
B) Net income decreases. 
C) Liabilities are decreased. 
D) Stockholders' equity decreases.

Question 9

Determine the effect of the following errors on the financial statements.Code your answers as follows:
A: If the error results in an overstatement of the financial statement component.
B: If the error results in an understatement of the financial statement component.
C.If the error does not affect the financial statement component.

Accepted Answer

The answer of Determine the effect of the following errors...

Question 10

On December 1,2011,Fleet Company paid $30,000 for three months rent and debited prepaid rent for $30,000; the rent payment was for three was for three months beginning December 1,2011.Prepare Fleet's adjusting entry required on December 31,2011.

Accepted Answer

As of December 31, 2011, one month of t

Question 11

A trial balance prepared after the closing entries have been posted would show a zero balance in which one of the following accounts?

Accepted Answer

A) Inventory 
B) Accounts receivable 
C) Accumulated depreciation 
D) Income tax expense 
A) Inventory 
B) Accounts receivable 
C) Accumulated depreciation 
D) Income tax expense

Question 12

Which of the following doesn't correctly describe a journal entry which debits interest expense and credits interest payable?

Accepted Answer

A) It increases expenses and decreases retained earnings. 
B) It decreases net income and decreases stockholders' equity. 
C) It increases expenses and increases liabilities. 
D) It decreases assets and decreases stockholders' equity. 
A) It increases expenses and decreases retained earnings. 
B) It decreases net income and decreases stockholders' equity. 
C) It increases expenses and increases liabilities. 
D) It decreases assets and decreases stockholders' equity.

Question 13

Determine the effect of the following errors on the financial statements.Code your answers as follows:
A.If the error results in an overstatement of the financial statement component.
B.If the error results in an understatement of the financial statement component.
C.If the error does not affect the financial statement component.

Accepted Answer

If the error results in an overstatement

Question 14

Which of the following doesn't correctly describe a journal entry which debits depreciation expense and credits accumulated depreciation?

Accepted Answer

A) It increases expenses and does not affect assets. 
B) It decreases net income and decreases assets. 
C) It increases expenses and decreases retained earnings. 
D) It decreases assets and decreases net income. 
A) It increases expenses and does not affect assets. 
B) It decreases net income and decreases assets. 
C) It increases expenses and decreases retained earnings. 
D) It decreases assets and decreases net income.

Question 15

Which of the following journal entries was created as the result of a deferral?

Accepted Answer

A)  Interest expense
$ \quad $$ \quad $Interest payable 
B)  Accounts receivable
$ \quad $$ \quad $Service revenues 
C)  Salaries expense
$ \quad $$ \quad $Salaries payable 
D)  Cash
$ \quad $Unearned revenue 
A)  Interest expense
$ \quad $$ \quad $Interest payable 
B)  Accounts receivable
$ \quad $$ \quad $Service revenues 
C)  Salaries expense
$ \quad $$ \quad $Salaries payable 
D)  Cash
$ \quad $Unearned revenue

Which of the following journal entries was created as the result of a deferral?

The adjusting entry to record an accrued expense results in a decrease in both assets and stockholders' equity.

The declaration and payment of a $5,000 dividend by JLH Company would be reported on which of JLH's financial statements?

The adjusting entry to record accrued revenues results in an increase in assets and stockholders' equity.

Which of the following correctly describes the effects of recording prepaid insurance when cash is paid to purchase an insurance policy?

On December 1,2011,Fleet Company paid $30,000 for three months rent and debited prepaid rent for $30,000; the rent payment was for three was for three months beginning December 1,2011.Prepare Fleet's adjusting entry required on December 31,2011.

A trial balance prepared after the closing entries have been posted would show a zero balance in which one of the following accounts?

Which of the following doesn't correctly describe a journal entry which debits interest expense and credits interest payable?

Which of the following doesn't correctly describe a journal entry which debits depreciation expense and credits accumulated depreciation?

Which of the following journal entries was created as the result of a deferral?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Balance Sheet

Operating Decisions and the Income Statement

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Reporting and Interpreting Investments in Other Corporations

Statement of Cash Flows

Analyzing Financial Statements

Filters

Exam 4: Adjustments,Financial Statements,and the Quality of Earnings

Which of the following journal entries was created as the result of a deferral?

The adjusting entry to record an accrued expense results in a decrease in both assets and stockholders' equity.

The declaration and payment of a $5,000 dividend by JLH Company would be reported on which of JLH's financial statements?

The adjusting entry to record accrued revenues results in an increase in assets and stockholders' equity.

Which of the following correctly describes the effects of recording prepaid insurance when cash is paid to purchase an insurance policy?

On December 1,2011,Fleet Company paid $30,000 for three months rent and debited prepaid rent for $30,000; the rent payment was for three was for three months beginning December 1,2011.Prepare Fleet's adjusting entry required on December 31,2011.

A trial balance prepared after the closing entries have been posted would show a zero balance in which one of the following accounts?

Which of the following doesn't correctly describe a journal entry which debits interest expense and credits interest payable?

Which of the following doesn't correctly describe a journal entry which debits depreciation expense and credits accumulated depreciation?

Which of the following journal entries was created as the result of a deferral?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Balance Sheet

Operating Decisions and the Income Statement

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, Receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles

Reporting and Interpreting Liabilities

Reporting and Interpreting Bonds

Reporting and Interpreting Owners Equity

Reporting and Interpreting Investments in Other Corporations

Statement of Cash Flows

Analyzing Financial Statements

Filters