Question 1

Prepaid expenses,depreciation,accrued expenses,unearned revenues,and accrued revenues are all examples of:

Accepted Answer

A)  Items that require contra accounts. 
B)  Items that require adjusting entries. 
C)  Asset and equity. 
D)  Asset accounts. 
E)  Income statement accounts. 
A)  Items that require contra accounts. 
B)  Items that require adjusting entries. 
C)  Asset and equity. 
D)  Asset accounts. 
E)  Income statement accounts.

Question 2

On November 1,Jovel Company loaned another company $100,000 at a 6.0% interest rate.The note receivable plus interest will not be collected until March 1 of the following year.The company's annual accounting period ends on December 31,and adjustments are only made at year-end.The adjusting entry needed on December 31 is:

Accepted Answer

A)  No entry required. 
B)  Debit Interest Expense, $5,000; credit Interest Payable, $5,000. 
C)  Debit Interest Expense, $1,000; credit Note Payable, $1,000. 
D)  Debit Interest Receivable, $500; credit Interest Revenue, $500. 
E)  Debit Interest Receivable, $1,000; credit Interest Revenue, $1,000. 
A)  No entry required. 
B)  Debit Interest Expense, $5,000; credit Interest Payable, $5,000. 
C)  Debit Interest Expense, $1,000; credit Note Payable, $1,000. 
D)  Debit Interest Receivable, $500; credit Interest Revenue, $500. 
E)  Debit Interest Receivable, $1,000; credit Interest Revenue, $1,000.

Question 3

The accrual basis of accounting requires adjustments to recognize revenues in the periods they are earned and to match expenses with revenues.

Accepted Answer

A) True 
 B)False

Question 4

A balance sheet that places the liabilities and equity to the right of the assets is a(n):

Accepted Answer

A)  Account form balance sheet. 
B)  Report form balance sheet. 
C)  Interim balance sheet. 
D)  Classified balance sheet. 
E)  Unclassified balance sheet. 
A)  Account form balance sheet. 
B)  Report form balance sheet. 
C)  Interim balance sheet. 
D)  Classified balance sheet. 
E)  Unclassified balance sheet.

Question 5

________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Accepted Answer

The answer of ________ are required at the end of...

Question 6

Adjusting entries made at the end of an accounting period accomplish all of the following except:

Accepted Answer

A)  Updating liability and asset accounts to their proper balances. 
B)  Assigning revenues to the periods in which they are earned. 
C)  Assigning expenses to the periods in which they are incurred. 
D)  Assuring that financial statements reflect the revenues earned and the expenses incurred. 
E)  Assuring that external transaction amounts remain unchanged. 
A)  Updating liability and asset accounts to their proper balances. 
B)  Assigning revenues to the periods in which they are earned. 
C)  Assigning expenses to the periods in which they are incurred. 
D)  Assuring that financial statements reflect the revenues earned and the expenses incurred. 
E)  Assuring that external transaction amounts remain unchanged.

Question 7

The accrual basis of accounting recognizes revenues when cash is received from customers.

Accepted Answer

A) True 
 B)False

Question 8

Closing the temporary accounts at the end of each accounting period does all of the following except:

Accepted Answer

A)  Serves to transfer the effects of these accounts to the retained earnings account on the balance sheet. 
B)  Prepares the dividends account for use in the next period. 
C)  Brings the revenue and expense accounts to zero balances. 
D)  Has no effect on the retained earnings account. 
E)  Causes retained earnings to reflect increases from revenues and decreases from expenses and dividends. 
A)  Serves to transfer the effects of these accounts to the retained earnings account on the balance sheet. 
B)  Prepares the dividends account for use in the next period. 
C)  Brings the revenue and expense accounts to zero balances. 
D)  Has no effect on the retained earnings account. 
E)  Causes retained earnings to reflect increases from revenues and decreases from expenses and dividends.

Question 9

Match the following terms with the appropriate definition.
-Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.

Accepted Answer

A) Accrued revenues 
B) Expense recognition (matching) principle 
C) Cash basis accounting 
D) Depreciation 
E) Accrual basis accounting
F)Interim financial statements
G)Straight-line depreciation
H)Time period assumption
I)Fiscal year 
A) Accrued revenues 
B) Expense recognition (matching) principle 
C) Cash basis accounting 
D) Depreciation 
E) Accrual basis accounting
F)Interim financial statements
G)Straight-line depreciation
H)Time period assumption
I)Fiscal year

Question 10

Juno Company had $500 of office supplies available at the beginning of the current year.During the year Juno Company purchased $2,750 worth of office supplies,which were debited to the office supplies account.On December 31 of this year,$375 worth of office supplies remained.
a.Calculate the amount of Juno Company's office supplies expense for the current year.(Show your calculations.)
b.Prepare the journal entry to adjust the supplies account.

Accepted Answer

None

Question 11

The time period assumption assumes that an organization's activities may be divided into specific reporting time periods including all of the following except:

Accepted Answer

A)  Months. 
B)  Quarters. 
C)  Fiscal years. 
D)  Calendar years. 
E)  Days. 
A)  Months. 
B)  Quarters. 
C)  Fiscal years. 
D)  Calendar years. 
E)  Days.

Question 12

Based on the unadjusted trial balance for Glow Styling and the adjusting information given below,prepare the adjusting journal entries for Glow Styling.After completing the adjusting entries,prepare the trial balance for Glow Styling.
Glow Styling unadjusted trial balance for the current year follows:   
Additional information:
a.An insurance policy examination showed $1,240 of expired insurance.
b.An inventory count showed $210 of unused shop supplies still available.
c.Depreciation expense on shop equipment,$350.
d.Depreciation expense on the building,$2,220.
e.A beautician is behind on space rental payments,and this $200 of accrued revenues was unrecorded at the time the trial balance was prepared.
f.$800 of the Unearned Rent account balance was earned by year-end.
g.The one employee,a receptionist,works a five-day workweek at $50 per day.The employee was paid last week but has worked four days this week for which she has not been paid.
h.Three months' property taxes,totaling $450,have accrued.This additional amount of property taxes expense has not been recorded.
i.One month's interest on the note payable,$600,has accrued but is unrecorded.
Use the above information to prepare the adjusted trial balance for Glow Styling.

Accepted Answer

The answer of Based on the unadjusted trial balance for...

Question 13

A company performs 20 days of work on a 30-day contract before the end of the year.The total contract is valued at $6,000,with payment received in advance.The $6,000 cash receipt was initially recorded as Unearned Revenue.The required adjusting entry includes a $4,000 debit to Unearned Revenue.

Accepted Answer

A) True 
 B)False

Question 14

Match the following terms with the appropriate definition.
-A useful measure of a company's operating results determined by dividing net income by net sales.

Accepted Answer

A) Adjusting entry 
B) Unadjusted trial balance 
C) Prepaid expenses 
D) Natural business year 
E) Accrued expenses
F)Adjusted trial balance
G)Report form balance sheet
H)Accounting period
I)Profit margin
J)Contra account 
A) Adjusting entry 
B) Unadjusted trial balance 
C) Prepaid expenses 
D) Natural business year 
E) Accrued expenses
F)Adjusted trial balance
G)Report form balance sheet
H)Accounting period
I)Profit margin
J)Contra account

Question 15

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Accepted Answer

A)  Accumulated depreciation. 
B)  A contra account. 
C)  The expense recognition (matching) principle. 
D)  Depreciation expense. 
E)  An accrued account. 
A)  Accumulated depreciation. 
B)  A contra account. 
C)  The expense recognition (matching) principle. 
D)  Depreciation expense. 
E)  An accrued account.

Question 16

Revenue and expense balances are transferred from the adjusted trial balance to the income statement.

Accepted Answer

A) True 
 B)False

Question 17

________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid.________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Accepted Answer

The answer of ________ basis accounting means that revenues are...

Question 18

Identify the primary differences between accrual accounting and cash basis accounting.

Accepted Answer

Accrual accounting records rev

Question 19

Reversing entries:

Accepted Answer

A)  Are necessary when journal entries have been incorrectly recorded. 
B)  Are a required step in the accounting cycle. 
C)  Will often result temporarily in abnormal account balances in some accounts. 
D)  Are required only if the company uses accounting software to record journal entries. 
E)  Must be made before preparing the post-closing trial balance. 
A)  Are necessary when journal entries have been incorrectly recorded. 
B)  Are a required step in the accounting cycle. 
C)  Will often result temporarily in abnormal account balances in some accounts. 
D)  Are required only if the company uses accounting software to record journal entries. 
E)  Must be made before preparing the post-closing trial balance.

Question 20

Temporary accounts include all of the following except:

Accepted Answer

A)  Consulting revenue. 
B)  Dividends. 
C)  Rent expense. 
D)  Prepaid rent. 
E)  Income Summary. 
A)  Consulting revenue. 
B)  Dividends. 
C)  Rent expense. 
D)  Prepaid rent. 
E)  Income Summary.

Prepaid expenses,depreciation,accrued expenses,unearned revenues,and accrued revenues are all examples of:

The accrual basis of accounting requires adjustments to recognize revenues in the periods they are earned and to match expenses with revenues.

A balance sheet that places the liabilities and equity to the right of the assets is a(n):

________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Adjusting entries made at the end of an accounting period accomplish all of the following except:

The accrual basis of accounting recognizes revenues when cash is received from customers.

Closing the temporary accounts at the end of each accounting period does all of the following except:

Match the following terms with the appropriate definition. -Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.

The time period assumption assumes that an organization's activities may be divided into specific reporting time periods including all of the following except:

A company performs 20 days of work on a 30-day contract before the end of the year.The total contract is valued at $6,000,with payment received in advance.The $6,000 cash receipt was initially recorded as Unearned Revenue.The required adjusting entry includes a $4,000 debit to Unearned Revenue.

Match the following terms with the appropriate definition. -A useful measure of a company's operating results determined by dividing net income by net sales.

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Revenue and expense balances are transferred from the adjusted trial balance to the income statement.

basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Identify the primary differences between accrual accounting and cash basis accounting.

Reversing entries:

Temporary accounts include all of the following except:

Accounting in Business

Analyzing for Business Transactions

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 3: Adjusting Accounts for Financial Statements

Prepaid expenses,depreciation,accrued expenses,unearned revenues,and accrued revenues are all examples of:

The accrual basis of accounting requires adjustments to recognize revenues in the periods they are earned and to match expenses with revenues.

A balance sheet that places the liabilities and equity to the right of the assets is a(n):

________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Adjusting entries made at the end of an accounting period accomplish all of the following except:

The accrual basis of accounting recognizes revenues when cash is received from customers.

Closing the temporary accounts at the end of each accounting period does all of the following except:

Match the following terms with the appropriate definition. -Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.

The time period assumption assumes that an organization's activities may be divided into specific reporting time periods including all of the following except:

A company performs 20 days of work on a 30-day contract before the end of the year.The total contract is valued at $6,000,with payment received in advance.The $6,000 cash receipt was initially recorded as Unearned Revenue.The required adjusting entry includes a $4,000 debit to Unearned Revenue.

Match the following terms with the appropriate definition. -A useful measure of a company's operating results determined by dividing net income by net sales.

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Revenue and expense balances are transferred from the adjusted trial balance to the income statement.

________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid.________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

Identify the primary differences between accrual accounting and cash basis accounting.

Reversing entries:

Temporary accounts include all of the following except:

Accounting in Business

Analyzing for Business Transactions

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.