Question 1

Accrual accounting is an application of continuity.

Accepted Answer

A) True 
 B)False  False

Question 2

The heading of an adjusted trial balance might contain the line "May 31,2013"

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following transactions will not result in the recognition of an expense?

Accepted Answer

A)  Interest accrued on a bank loan 
B)  Declaration and payment of a dividend 
C)  Use of machinery during the period 
D)  Expiration of prepaid insurance 
A)  Interest accrued on a bank loan 
B)  Declaration and payment of a dividend 
C)  Use of machinery during the period 
D)  Expiration of prepaid insurance B

Question 4

An adjusted trial balance will probably list fewer accounts than are listed in the trial balance.

Accepted Answer

A) True 
 B)False

Question 5

The post-closing trial balance differs from the adjusted trial balance in that it does not

Accepted Answer

A)  include balance sheet accounts. 
B)  include income statement accounts. 
C)  take into account adjusting entries. 
D)  take into account closing entries. 
A)  include balance sheet accounts. 
B)  include income statement accounts. 
C)  take into account adjusting entries. 
D)  take into account closing entries.

Question 6

Expenses that have been paid for and recorded are called accrued expenses.

Accepted Answer

A) True 
 B)False

Question 7

What is the purpose of adjusting entries?

Accepted Answer

Adjusting entries result in financial st

Question 8

An adjusted trial balance is prepared after the adjusting entries are recorded.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following pairs of accounts could not possibly appear in the same adjusting entry?

Accepted Answer

A)  Interest Income and Interest Payable 
B)  Revenue from Services and Accounts Receivable 
C)  Revenue from Services and Unearned Revenue 
D)  Rent Expense and Rent Payable 
A)  Interest Income and Interest Payable 
B)  Revenue from Services and Accounts Receivable 
C)  Revenue from Services and Unearned Revenue 
D)  Rent Expense and Rent Payable

Question 10

When revenues exceed expenses,a net income occurs.

Accepted Answer

A) True 
 B)False

Question 11

Which account bypasses the Income Summary account in the closing process?

Accepted Answer

A)  Revenue from Services 
B)  Depreciation Expense-Building 
C)  Dividends 
D)  Wages Expense 
A)  Revenue from Services 
B)  Depreciation Expense-Building 
C)  Dividends 
D)  Wages Expense

Question 12

In the accounting cycle,adjusting entries are prepared before closing entries.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following accounts could increase as a result of adjusting entries?

Accepted Answer

A)  Prepaid Rent 
B)  Accounts Receivable 
C)  Unearned Revenues 
D)  Machinery 
A)  Prepaid Rent 
B)  Accounts Receivable 
C)  Unearned Revenues 
D)  Machinery

Question 14

Which of the following accounts would appear on an adjusted trial balance but probably would not appear on a trial balance?

Accepted Answer

A)  Depreciation 
B)  Accounts Receivable 
C)  Service Revenue 
D)  Prepaid Rent 
A)  Depreciation 
B)  Accounts Receivable 
C)  Service Revenue 
D)  Prepaid Rent

Question 15

Use this adjusted trial balance to answer the following question.   The entry to close the Dividends account includes a

Accepted Answer

A)  debit to Dividends for $8,000. 
B)  debit to Retained Earnings for $8,000. 
C)  credit to Retained Earnings for $8,000. 
D)  credit to Income Summary for $8,000. 
A)  debit to Dividends for $8,000. 
B)  debit to Retained Earnings for $8,000. 
C)  credit to Retained Earnings for $8,000. 
D)  credit to Income Summary for $8,000.

Question 16

Depreciation Expense-Equipment is an example of a contra account.

Accepted Answer

A) True 
 B)False

Question 17

During the performance of the steps in the accounting cycle,trial balances are prepared at three key points.Using specific names where applicable,discuss the time of preparation and the purpose served by each of these trial balances.

Accepted Answer

The first time a trial balance would be

Question 18

Answer the following questions.(Show your work.)
a.Revenue of $60,000 was earned,but only $45,000 was collected.Expenses of $36,000 were incurred,but only $30,000 was paid.What is reported net income?
b.Wages of $4,000 are paid every Friday for a five-day workweek.If year end falls on a Tuesday,the adjusting entry for wages would be recorded at what amount?
c.A company vehicle is purchased for $24,000.Assuming an eight-year useful life and zero value at that time,what is the balance of accumulated depreciation after five years?
d.Supplies Expense of $3,600 was recorded for a given year.Assuming that $2,400 in supplies were purchased during the year and that $640 in supplies remained at year end,what was the cost of supplies at the beginning of the year?

Accepted Answer

a.$24,000 ($60,000 - $36,000)

Question 19

Match each definition with the correct term below.
-Deferred expense

Accepted Answer

A) Used to determine that all temporary accounts have zero balances. 
B) The postponement of the recognition of an expense already paid. 
C) Accounts that begin each accounting period with a zero balance. 
D) Increases in stockholders' equity resulting from selling goods. 
E) Revenue that is received in advance of goods delivery or service performance.
F)Accounts that carry their end-of-period balances into the next accounting period.
G)The recognition of a revenue or an expense that has arisen but not been recorded during the accounting period.
H)Decreases in stockholders' equity resulting from the cost of selling goods.
I)Used after making adjusting journal entries to ensure that debits equal credits.
J)Revenues that a company has earned by performing a service or delivering goods but for which no entry 
A) Used to determine that all temporary accounts have zero balances. 
B) The postponement of the recognition of an expense already paid. 
C) Accounts that begin each accounting period with a zero balance. 
D) Increases in stockholders' equity resulting from selling goods. 
E) Revenue that is received in advance of goods delivery or service performance.
F)Accounts that carry their end-of-period balances into the next accounting period.
G)The recognition of a revenue or an expense that has arisen but not been recorded during the accounting period.
H)Decreases in stockholders' equity resulting from the cost of selling goods.
I)Used after making adjusting journal entries to ensure that debits equal credits.
J)Revenues that a company has earned by performing a service or delivering goods but for which no entry

Question 20

Which of the following accounts is not closed?

Accepted Answer

A)  Dividends 
B)  Common Stock 
C)  Interest Income 
D)  Income Summary 
A)  Dividends 
B)  Common Stock 
C)  Interest Income 
D)  Income Summary

Accrual accounting is an application of continuity.

The heading of an adjusted trial balance might contain the line "May 31,2013"

Which of the following transactions will not result in the recognition of an expense?

An adjusted trial balance will probably list fewer accounts than are listed in the trial balance.

The post-closing trial balance differs from the adjusted trial balance in that it does not

Expenses that have been paid for and recorded are called accrued expenses.

What is the purpose of adjusting entries?

An adjusted trial balance is prepared after the adjusting entries are recorded.

Which of the following pairs of accounts could not possibly appear in the same adjusting entry?

When revenues exceed expenses,a net income occurs.

Which account bypasses the Income Summary account in the closing process?

In the accounting cycle,adjusting entries are prepared before closing entries.

Which of the following accounts could increase as a result of adjusting entries?

Which of the following accounts would appear on an adjusted trial balance but probably would not appear on a trial balance?

Use this adjusted trial balance to answer the following question. The entry to close the Dividends account includes a

Depreciation Expense-Equipment is an example of a contra account.

During the performance of the steps in the accounting cycle,trial balances are prepared at three key points.Using specific names where applicable,discuss the time of preparation and the purpose served by each of these trial balances.

Match each definition with the correct term below. -Deferred expense

Which of the following accounts is not closed?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 3: Measuring Business Income

Accrual accounting is an application of continuity.

The heading of an adjusted trial balance might contain the line "May 31,2013"

Which of the following transactions will not result in the recognition of an expense?

An adjusted trial balance will probably list fewer accounts than are listed in the trial balance.

The post-closing trial balance differs from the adjusted trial balance in that it does not

Expenses that have been paid for and recorded are called accrued expenses.

What is the purpose of adjusting entries?

An adjusted trial balance is prepared after the adjusting entries are recorded.

Which of the following pairs of accounts could not possibly appear in the same adjusting entry?

When revenues exceed expenses,a net income occurs.

Which account bypasses the Income Summary account in the closing process?

In the accounting cycle,adjusting entries are prepared before closing entries.

Which of the following accounts could increase as a result of adjusting entries?

Which of the following accounts would appear on an adjusted trial balance but probably would not appear on a trial balance?

Use this adjusted trial balance to answer the following question. The entry to close the Dividends account includes a

Depreciation Expense-Equipment is an example of a contra account.

During the performance of the steps in the accounting cycle,trial balances are prepared at three key points.Using specific names where applicable,discuss the time of preparation and the purpose served by each of these trial balances.

Match each definition with the correct term below. -Deferred expense

Which of the following accounts is not closed?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters