Question 1

When there is a net loss,the Income Summary account would have a credit balance.

Accepted Answer

A) True 
 B)False

Question 2

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

Accepted Answer

A) True 
 B)False

Question 3

On April 1,Griffith Publishing Company received $1,548 from Santa Fe,Inc.for 36-month subscriptions to several different magazines.The company credited Unearned Fees for the amount received and the subscriptions started immediately.Assuming adjustments are only made at year-end,What is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the first year?

Accepted Answer

A)  debit Unearned Fees, $1,548; credit Fees Earned, $1,548. 
B)  debit Unearned Fees, $516; credit Fees Earned, $516. 
C)  debit Unearned Fees, $1,161; credit Fees Earned, $1,161. 
D)  debit Unearned Fees, $129; credit Fees Earned, $129. 
E)  debit Unearned Fees, $387; credit Fees Earned, $387. 
A)  debit Unearned Fees, $1,548; credit Fees Earned, $1,548. 
B)  debit Unearned Fees, $516; credit Fees Earned, $516. 
C)  debit Unearned Fees, $1,161; credit Fees Earned, $1,161. 
D)  debit Unearned Fees, $129; credit Fees Earned, $129. 
E)  debit Unearned Fees, $387; credit Fees Earned, $387.

Question 4

Classified balance sheets commonly include the following categories:
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity.
Match the typical classification of each item below with its correct balance sheet category (A through G).
-Cash

Accepted Answer

A) G 
B) B 
C) A 
D) C 
E) F
F)D
G)E 
A) G 
B) B 
C) A 
D) C 
E) F
F)D
G)E

Question 5

A company paid Jen Rogers,its sole stockholder,a total of $35,000 in dividends during the current year.The entry needed to close the dividends account is:

Accepted Answer

A)  Debit Income Summary and credit Cash for $35,000. 
B)  Debit Dividends and credit Cash for $35,000. 
C)  Debit Income Summary and credit Dividends for $35,000. 
D)  Debit Retained earnings and credit Dividends for $35,000. 
E)  Debit Dividends and credit Retained earnings for $35,000. 
A)  Debit Income Summary and credit Cash for $35,000. 
B)  Debit Dividends and credit Cash for $35,000. 
C)  Debit Income Summary and credit Dividends for $35,000. 
D)  Debit Retained earnings and credit Dividends for $35,000. 
E)  Debit Dividends and credit Retained earnings for $35,000.

Question 6

Using the information presented below,prepare a statement of retained earnings and balance sheet from the adjusted trial balance of Dodson Containers.

Accepted Answer

The answer of Using the information presented below,prepare a statement...

Question 7

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

Accepted Answer

A) True 
 B)False

Question 8

On July 1,a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date.What will be the insurance expense on the annual income statement for the first year ended December 31?

Accepted Answer

A)  $1,200. 
B)  $2,400. 
C)  $1,000. 
D)  $400. 
E)  $1,400. 
A)  $1,200. 
B)  $2,400. 
C)  $1,000. 
D)  $400. 
E)  $1,400.

Question 9

Each adjusting entry will affect a balance sheet account.

Accepted Answer

A) True 
 B)False

Question 10

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Accepted Answer

A) True 
 B)False

Question 11

Match the following types of adjustments with the appropriate transactions.
-Prepaid expense

Accepted Answer

A) Used to record wages owed, but not yet paid. 
B) Used to record revenue earned for which cash was received in advance. 
C) Used to record revenue earned for which cash has not been received. 
D) Used to record expiration or use of prepaid insurance. 
A) Used to record wages owed, but not yet paid. 
B) Used to record revenue earned for which cash was received in advance. 
C) Used to record revenue earned for which cash has not been received. 
D) Used to record expiration or use of prepaid insurance.

Question 12

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

Accepted Answer

A)  $$\begin{array} { | l | l | } 
\hline{ \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Unearned Consulting Revenue } \
\hline \text { Unearned Consulting Revenue } & \text { Consulting Revenue } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline\text { Initial Entry }  & \text { Adjusting Entry }  \
\hline \text { Cash } & \text { Consulting Revenue } \
\hline \text { Consulting Revenue } & \text { Unearned Revenue } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Unearned Revenue } \
\hline \text { Unearned Revenue } & \text { Cash } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Consulting Revenue } & \text { Unearned Revenue } \
\hline \text { Cash } & \text { Consulting Revenue } \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } &{ \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Consulting Revenue } \
\hline \text { Unearned Revenue } & \text { Unearned Reverue } \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | l | } 
\hline{ \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Unearned Consulting Revenue } \
\hline \text { Unearned Consulting Revenue } & \text { Consulting Revenue } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline\text { Initial Entry }  & \text { Adjusting Entry }  \
\hline \text { Cash } & \text { Consulting Revenue } \
\hline \text { Consulting Revenue } & \text { Unearned Revenue } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Unearned Revenue } \
\hline \text { Unearned Revenue } & \text { Cash } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \
\hline \text { Consulting Revenue } & \text { Unearned Revenue } \
\hline \text { Cash } & \text { Consulting Revenue } \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | l | } 
\hline { \text { Initial Entry } } &{ \text { Adjusting Entry } } \
\hline \text { Cash } & \text { Consulting Revenue } \
\hline \text { Unearned Revenue } & \text { Unearned Reverue } \
\hline
\end{array}$$

Question 13

Classified balance sheets commonly include the following categories:
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity.
Match the typical classification of each item below with its correct balance sheet category (A through G).
-Equipment used in business operations

Accepted Answer

A) G 
B) B 
C) A 
D) C 
E) F
F)D
G)E 
A) G 
B) B 
C) A 
D) C 
E) F
F)D
G)E

Question 14

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their ________ year.

Accepted Answer

The answer of Companies experiencing seasonal variations in sales often...

Question 15

If a company has current assets of $15,000 and current liabilities of $9,500,its current ratio is 1.6

Accepted Answer

A) True 
 B)False

Question 16

Tiptoe Shoes had annual revenues of $185,000,expenses of $103,700,and dividends of $18,000 during the current year.The retained earnings account before closing had a balance of $297,000.The entry to close the Income Summary account at the end of the year,after revenue and expense accounts have been closed,is:

Accepted Answer

A)  Debit Retained earnings $297,000; credit Income Summary $297,000 
B)  Debit Retained earnings $63,300; credit Income Summary $63,300 
C)  Debit Income Summary $63,300; credit Retained earnings $63,300 
D)  Debit Income Summary $81,300, credit Retained earnings $81,300 
E)  Debit Retained earnings $81,300; credit Income Summary $81,300 
A)  Debit Retained earnings $297,000; credit Income Summary $297,000 
B)  Debit Retained earnings $63,300; credit Income Summary $63,300 
C)  Debit Income Summary $63,300; credit Retained earnings $63,300 
D)  Debit Income Summary $81,300, credit Retained earnings $81,300 
E)  Debit Retained earnings $81,300; credit Income Summary $81,300

Question 17

After posting the entries to close all revenue and expense accounts,the Income Summary account of Cleaver Auto Services has a $4,000 debit balance.This result implies that Cleaver earned a net income of $4,000.

Accepted Answer

A) True 
 B)False

Question 18

It is obvious that an error occurred in the preparation and/or posting of closing entries if:

Accepted Answer

A)  all revenue and expense accounts have zero balances. 
B)  the Retained earnings account is debited for the amount of the net loss for the period. 
C)  the income summary account is debited for the amount of net income for the period. 
D)  all balance sheet accounts have zero balances. 
E)  only permanent accounts appear on the post-closing trial balance. 
A)  all revenue and expense accounts have zero balances. 
B)  the Retained earnings account is debited for the amount of the net loss for the period. 
C)  the income summary account is debited for the amount of net income for the period. 
D)  all balance sheet accounts have zero balances. 
E)  only permanent accounts appear on the post-closing trial balance.

Question 19

The Income Summary account is a permanent account that will be carried forward period after period.

Accepted Answer

A) True 
 B)False

Question 20

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows:   
Present the four adjusting journal entries that were recorded by Trapper Company.

Accepted Answer

Dec.31 Insurance Expense ………………………..300

When there is a net loss,the Income Summary account would have a credit balance.

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

A company paid Jen Rogers,its sole stockholder,a total of $35,000 in dividends during the current year.The entry needed to close the dividends account is:

Using the information presented below,prepare a statement of retained earnings and balance sheet from the adjusted trial balance of Dodson Containers.

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

On July 1,a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date.What will be the insurance expense on the annual income statement for the first year ended December 31?

Each adjusting entry will affect a balance sheet account.

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Match the following types of adjustments with the appropriate transactions. -Prepaid expense

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their ________ year.

If a company has current assets of $15,000 and current liabilities of $9,500,its current ratio is 1.6

After posting the entries to close all revenue and expense accounts,the Income Summary account of Cleaver Auto Services has a $4,000 debit balance.This result implies that Cleaver earned a net income of $4,000.

It is obvious that an error occurred in the preparation and/or posting of closing entries if:

The Income Summary account is a permanent account that will be carried forward period after period.

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

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

When there is a net loss,the Income Summary account would have a credit balance.

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

A company paid Jen Rogers,its sole stockholder,a total of $35,000 in dividends during the current year.The entry needed to close the dividends account is:

Using the information presented below,prepare a statement of retained earnings and balance sheet from the adjusted trial balance of Dodson Containers.

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

On July 1,a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date.What will be the insurance expense on the annual income statement for the first year ended December 31?

Each adjusting entry will affect a balance sheet account.

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Match the following types of adjustments with the appropriate transactions. -Prepaid expense

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their ________ year.

If a company has current assets of $15,000 and current liabilities of $9,500,its current ratio is 1.6

After posting the entries to close all revenue and expense accounts,the Income Summary account of Cleaver Auto Services has a $4,000 debit balance.This result implies that Cleaver earned a net income of $4,000.

It is obvious that an error occurred in the preparation and/or posting of closing entries if:

The Income Summary account is a permanent account that will be carried forward period after period.

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

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