Question 1

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

Accepted Answer

A)  Fees Earned and Unearned Fees 
B)  Interest Income and Interest Expense 
C)  Rent Expense and Prepaid Rent 
D)  Salaries Payable and Salaries Expense 
A)  Fees Earned and Unearned Fees 
B)  Interest Income and Interest Expense 
C)  Rent Expense and Prepaid Rent 
D)  Salaries Payable and Salaries Expense

Question 2

The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having

Accepted Answer

A)  expenses understated and therefore net income overstated 
B)  revenues understated and therefore net income understated 
C)  expenses understated and therefore net income understated 
D)  expenses overstated and therefore net income understated 
A)  expenses understated and therefore net income overstated 
B)  revenues understated and therefore net income understated 
C)  expenses understated and therefore net income understated 
D)  expenses overstated and therefore net income understated

Question 3

At January 31, the end of the first month of the year, the usual adjusting entry transferring expired insurance to an expense account is omitted. Which items will be incorrectly stated, because of the error, on (a) the income statement for January and (b) the balance sheet as of January 31? Also indicate whether the items in error will be overstated or understated.

Accepted Answer

The answer of At January 31, the end of the...

Question 4

On December 15, Great Designs Company hired an independent contractor for a project. The contractor completed the project on December 29 and submitted an invoice for $2,425 which was due on January 15. The amount was duly paid on January 15.
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(a) Prepare the journal entry or entries necessary to record these transactions.
(b) Explain why you prepared this/these journal entries.

Accepted Answer

The answer of On December 15, Great Designs Company hired...

Question 5

(a) Explain the differences between accrued revenues and unearned revenues.
(b) Explain the differences between accrued expenses and prepaid expenses.
(c) Give an example of each.

Accepted Answer

The answer of (a) Explain the differences between accrued revenues...

Question 6

Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000, for the fiscal year ending on April 30?

Accepted Answer

A)  debit Insurance Expense, $3,000; credit Prepaid Insurance, $3,000 
B)  debit Insurance Expense, $14,000; credit Prepaid Insurance, $14,000 
C)  debit Prepaid Insurance, $11,000; credit Insurance Expense, $11,000 
D)  debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,000 
A)  debit Insurance Expense, $3,000; credit Prepaid Insurance, $3,000 
B)  debit Insurance Expense, $14,000; credit Prepaid Insurance, $14,000 
C)  debit Prepaid Insurance, $11,000; credit Insurance Expense, $11,000 
D)  debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,000

Question 7

Accrued salaries of $600 owed to employees for December 29, 30, and 31 are not taken into consideration in preparing the financial statements for the year ended December 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of December 31. Also indicate whether the items in error will be overstated or understated.

Accepted Answer

The answer of Accrued salaries of $600 owed to employees...

Question 8

Adjusting entries affect balance sheet accounts to the exclusion of income statement accounts.

Accepted Answer

A) True 
 B)False

Question 9

Which account would normally not require an adjusting entry?

Accepted Answer

A)  Wages Expense 
B)  Accounts Receivable 
C)  Accumulated Depreciation 
D)  Cash 
A)  Wages Expense 
B)  Accounts Receivable 
C)  Accumulated Depreciation 
D)  Cash

Question 10

Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n)

Accepted Answer

A)  asset 
B)  liability 
C)  stockholders' equity account 
D)  contra liability 
A)  asset 
B)  liability 
C)  stockholders' equity account 
D)  contra liability

Question 11

Which of the following is an example of a prepaid expense?

Accepted Answer

A)  Supplies 
B)  Accounts Receivable 
C)  Unearned Subscriptions 
D)  Unearned Fees 
A)  Supplies 
B)  Accounts Receivable 
C)  Unearned Subscriptions 
D)  Unearned Fees

Question 12

A company pays an employee $3,000 for a five-day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

Accepted Answer

A) True 
 B)False

Question 13

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

Accepted Answer

A)  $18,000 
B)  $90,000 
C)  $54,000 
D)  $36,000 
A)  $18,000 
B)  $90,000 
C)  $54,000 
D)  $36,000

Question 14

On December 31, a business estimates depreciation on equipment used during the first year of operations to be $2,900. (a) Journalize the adjusting entry required on December 31. (b) If the adjusting entry in (a) were omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of December 31?

Accepted Answer

The answer of On December 31, a business estimates depreciation...

Question 15

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Accepted Answer

A)  Fees Earned 
B)  Accounts Receivable 
C)  Unearned Fees 
D)  Depreciation Expense 
A)  Fees Earned 
B)  Accounts Receivable 
C)  Unearned Fees 
D)  Depreciation Expense

Question 16

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs
adjusting and deferred revenue has never been recorded.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of accrued revenue?

Accepted Answer

A)  snow removal services that have been paid for three months in advance 
B)  snow removal services that have been provided but have not been billed or paid 
C)  an agreement that has been signed for snow removal services for the next three months 
D)  snow removal services that have been provided and paid on the same day 
A)  snow removal services that have been paid for three months in advance 
B)  snow removal services that have been provided but have not been billed or paid 
C)  an agreement that has been signed for snow removal services for the next three months 
D)  snow removal services that have been provided and paid on the same day

Question 18

Which of the following is an example of an accrued expense?

Accepted Answer

A)  salary owed but not yet paid 
B)  fees received but not yet earned 
C)  supplies on hand 
D)  a two-year premium paid on a fire insurance policy 
A)  salary owed but not yet paid 
B)  fees received but not yet earned 
C)  supplies on hand 
D)  a two-year premium paid on a fire insurance policy

Question 19

Which of the accounting steps in the accounting process below would be completed last?

Accepted Answer

A)  preparing the adjusted trial balance 
B)  posting 
C)  preparing the financial statements 
D)  journalizing 
A)  preparing the adjusted trial balance 
B)  posting 
C)  preparing the financial statements 
D)  journalizing

Question 20

Accrued expenses are ordinarily reported on the balance sheet as

Accepted Answer

A)  assets 
B)  liabilities 
C)  fixed assets 
D)  prepaid expenses 
A)  assets 
B)  liabilities 
C)  fixed assets 
D)  prepaid expenses

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

The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having

(a) Explain the differences between accrued revenues and unearned revenues. (b) Explain the differences between accrued expenses and prepaid expenses. (c) Give an example of each.

Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000, for the fiscal year ending on April 30?

Adjusting entries affect balance sheet accounts to the exclusion of income statement accounts.

Which account would normally not require an adjusting entry?

Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n)

Which of the following is an example of a prepaid expense?

A company pays an employee $3,000 for a five-day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Which of the following is an example of accrued revenue?

Which of the following is an example of an accrued expense?

Which of the accounting steps in the accounting process below would be completed last?

Accrued expenses are ordinarily reported on the balance sheet as

Accounting and Business

Double-Entry Accounting

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 3: Adjustments: Accruals and Deferrals

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

The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having

(a) Explain the differences between accrued revenues and unearned revenues. (b) Explain the differences between accrued expenses and prepaid expenses. (c) Give an example of each.

Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000, for the fiscal year ending on April 30?

Adjusting entries affect balance sheet accounts to the exclusion of income statement accounts.

Which account would normally not require an adjusting entry?

Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n)

Which of the following is an example of a prepaid expense?

A company pays an employee $3,000 for a five-day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Which of the following is an example of accrued revenue?

Which of the following is an example of an accrued expense?

Which of the accounting steps in the accounting process below would be completed last?

Accrued expenses are ordinarily reported on the balance sheet as

Accounting and Business

Double-Entry Accounting

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters