Question 1

The entry to close the Dividends account is debit

Accepted Answer

A)  Income Summary and credit Dividends. 
B)  Retained Earnings and credit Dividends. 
C)  Dividends and credit Income Summary. 
D)  Dividends and credit Retained Earnings. 
A)  Income Summary and credit Dividends. 
B)  Retained Earnings and credit Dividends. 
C)  Dividends and credit Income Summary. 
D)  Dividends and credit Retained Earnings.

Question 2

As the usefulness of a plant asset expires,

Accepted Answer

A)  an amount is transferred from one asset account to another. 
B)  a related expense account is reduced. 
C)  a liability is created. 
D)  the cost of the asset is allocated to an expense account. 
A)  an amount is transferred from one asset account to another. 
B)  a related expense account is reduced. 
C)  a liability is created. 
D)  the cost of the asset is allocated to an expense account.

Question 3

Which of the following actions can distort company records and result in fraudulent financial reporting?

Accepted Answer

A)  Prepaying an expense and recording it as an asset 
B)  Collecting revenue in advance of earning it 
C)  Recording income that has not yet been earned 
D)  Recording an expense that has been incurred but has not yet been paid 
A)  Prepaying an expense and recording it as an asset 
B)  Collecting revenue in advance of earning it 
C)  Recording income that has not yet been earned 
D)  Recording an expense that has been incurred but has not yet been paid

Question 4

Accumulated depreciation is another term for depreciation expense.

Accepted Answer

A) True 
 B)False

Question 5

Failure to adjust for accrued wages at year end will result in an

Accepted Answer

A)  overstatement of expenses. 
B)  understatement of assets. 
C)  overstatement of common stock. 
D)  overstatement of net income. 
A)  overstatement of expenses. 
B)  understatement of assets. 
C)  overstatement of common stock. 
D)  overstatement of net income.

Question 6

In July,a company pays three years' insurance in advance.The December 31 adjusting entry is

Accepted Answer

A)  Insurance Expense - Debit; Prepaid Insurance - Credit 
B)  Prepaid Insurance - Debit; Insurance Expense - Credit 
C)  Insurance Expense - Debit; Cash - Credit 
D)  Prepaid Insurance - Debit; Cash - Credit 
A)  Insurance Expense - Debit; Prepaid Insurance - Credit 
B)  Prepaid Insurance - Debit; Insurance Expense - Credit 
C)  Insurance Expense - Debit; Cash - Credit 
D)  Prepaid Insurance - Debit; Cash - Credit

Question 7

Adjusting entries are useful in apportioning costs among two or more accounting periods.

Accepted Answer

A) True 
 B)False

Question 8

Failure to prepare formal closing entries will produce a misstated

Accepted Answer

A)  Income Summary account balance. 
B)  Retained Earnings account balance. 
C)  Accounts Receivable account balance. 
D)  Accounts Payable account balance. 
A)  Income Summary account balance. 
B)  Retained Earnings account balance. 
C)  Accounts Receivable account balance. 
D)  Accounts Payable account balance.

Question 9

Expenses are incurred

Accepted Answer

A)  as a result of selling goods or rendering a service. 
B)  in order to produce liabilities. 
C)  only during the adjustment process. 
D)  in order to produce assets. 
A)  as a result of selling goods or rendering a service. 
B)  in order to produce liabilities. 
C)  only during the adjustment process. 
D)  in order to produce assets.

Question 10

Distinguish between adjusting and closing entries.

Accepted Answer

Adjusting entries update the a

Question 11

Revenue should be recognized,only when collectability is reasonably assured.

Accepted Answer

A) True 
 B)False

Question 12

Norfolk Company has the following liabilities at year end:
 $\begin{array}{lr}
\text { Notes Payable } & \$ 40,000 \
\text { Accounts Payable } & 30,000 \
\text { Unearned Contract Revenue } & 18,000 \
\text { Wages Payable } & 5,800 \
\text { Interest Payable } & 1,400 \
\text { Income Taxes Payable } & 3,000
\end{array}$ 
a.Which of these accounts probably was created at the end of the fiscal year as a result of an accrual? Which probably was adjusted at year end? Explain your answer.
b.Which adjustments probably reduced net income? Which probably increased net income? Explain your answers.

Accepted Answer

a.Wages,interest,and income taxes are ex

Question 13

Which of the following could not possibly be a closing entry?

Accepted Answer

A)  Debit Income Summary and credit Dividends. 
B)  Debit Income Summary and credit Retained Earnings. 
C)  Debit Retained Earnings and credit Dividends. 
D)  Debit Retained Earnings and credit Income Summary. 
A)  Debit Income Summary and credit Dividends. 
B)  Debit Income Summary and credit Retained Earnings. 
C)  Debit Retained Earnings and credit Dividends. 
D)  Debit Retained Earnings and credit Income Summary.

Question 14

What is the adjustment entry for that portion of revenue received in advance which has now been earned?

Accepted Answer

A)  Unearned Revenue - Debit; Cash - Credit. 
B)  Unearned Revenue - Debit; Revenue from Services - Credit. 
C)  Revenue from Services - Debit; Unearned Revenue - Credit. 
D)  Cash - Debit; Unearned Revenue - Credit. 
A)  Unearned Revenue - Debit; Cash - Credit. 
B)  Unearned Revenue - Debit; Revenue from Services - Credit. 
C)  Revenue from Services - Debit; Unearned Revenue - Credit. 
D)  Cash - Debit; Unearned Revenue - Credit.

Question 15

Which of the following is an example of a deferral?

Accepted Answer

A)  Income taxes recorded but not yet paid 
B)  The purchase of a company vehicle 
C)  Legal fees earned but not yet collected 
D)  The accumulation of interest in a bank account 
A)  Income taxes recorded but not yet paid 
B)  The purchase of a company vehicle 
C)  Legal fees earned but not yet collected 
D)  The accumulation of interest in a bank account

Question 16

Which of the following accounts is not closed during the closing procedure?

Accepted Answer

A)  Income Summary 
B)  Revenues Earned 
C)  Retained Earnings 
D)  Rent Expense 
A)  Income Summary 
B)  Revenues Earned 
C)  Retained Earnings 
D)  Rent Expense

Question 17

Dowling Company had supplies on hand costing $1,000 at the beginning of the year and $2,400 at the end of the year.During the year,supplies totaling $3,800 were consumed.How much was the total cost of supplies purchased during the year?

Accepted Answer

$3,800 + $

Question 18

When there is a net loss,the entry to close the Income Summary account is debit

Accepted Answer

A)  Retained Earnings and credit Income Summary. 
B)  Income Summary and credit Retained Earnings. 
C)  Net Loss and credit Income Summary. 
D)  Income Summary and credit Net Loss. 
A)  Retained Earnings and credit Income Summary. 
B)  Income Summary and credit Retained Earnings. 
C)  Net Loss and credit Income Summary. 
D)  Income Summary and credit Net Loss.

Question 19

An adjusting entry made to record accrued interest on a note payable due next year consists of

Accepted Answer

A)  Cash - Debit; Interest Expense - Credit. 
B)  Interest Receivable - Debit; Interest Income - Credit. 
C)  Interest Payable - Debit; Interest Expense - Credit. 
D)  Interest Expense - Debit; Interest Payable - Credit. 
A)  Cash - Debit; Interest Expense - Credit. 
B)  Interest Receivable - Debit; Interest Income - Credit. 
C)  Interest Payable - Debit; Interest Expense - Credit. 
D)  Interest Expense - Debit; Interest Payable - Credit.

Question 20

Match each definition with the correct term below.
-Accrual

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

The entry to close the Dividends account is debit

As the usefulness of a plant asset expires,

Which of the following actions can distort company records and result in fraudulent financial reporting?

Accumulated depreciation is another term for depreciation expense.

Failure to adjust for accrued wages at year end will result in an

In July,a company pays three years' insurance in advance.The December 31 adjusting entry is

Adjusting entries are useful in apportioning costs among two or more accounting periods.

Failure to prepare formal closing entries will produce a misstated

Expenses are incurred

Distinguish between adjusting and closing entries.

Revenue should be recognized,only when collectability is reasonably assured.

Which of the following could not possibly be a closing entry?

What is the adjustment entry for that portion of revenue received in advance which has now been earned?

Which of the following is an example of a deferral?

Which of the following accounts is not closed during the closing procedure?

Dowling Company had supplies on hand costing $1,000 at the beginning of the year and $2,400 at the end of the year.During the year,supplies totaling $3,800 were consumed.How much was the total cost of supplies purchased during the year?

When there is a net loss,the entry to close the Income Summary account is debit

An adjusting entry made to record accrued interest on a note payable due next year consists of

Match each definition with the correct term below. -Accrual

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

The entry to close the Dividends account is debit

As the usefulness of a plant asset expires,

Which of the following actions can distort company records and result in fraudulent financial reporting?

Accumulated depreciation is another term for depreciation expense.

Failure to adjust for accrued wages at year end will result in an

In July,a company pays three years' insurance in advance.The December 31 adjusting entry is

Adjusting entries are useful in apportioning costs among two or more accounting periods.

Failure to prepare formal closing entries will produce a misstated

Expenses are incurred

Distinguish between adjusting and closing entries.

Revenue should be recognized,only when collectability is reasonably assured.

Which of the following could not possibly be a closing entry?

What is the adjustment entry for that portion of revenue received in advance which has now been earned?

Which of the following is an example of a deferral?

Which of the following accounts is not closed during the closing procedure?

Dowling Company had supplies on hand costing $1,000 at the beginning of the year and $2,400 at the end of the year.During the year,supplies totaling $3,800 were consumed.How much was the total cost of supplies purchased during the year?

When there is a net loss,the entry to close the Income Summary account is debit

An adjusting entry made to record accrued interest on a note payable due next year consists of

Match each definition with the correct term below. -Accrual

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