Exam 3: Adjusting the Accounts

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Quality Heating Company has the following liabilities at year end: a.Which of these accounts probably was/were created at the end of the fiscal year as a result of an accrual? Which probably was/were adjusted at year end? Explain your answer. b.Which adjustments probably reduced net income? Which probably increased net income? Explain your answers.

(Essay)

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Question 141

The accrual basis of accounting results in a more accurate measurement of net income for the period than does the cash basis of accounting.

(True/False)

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Question 142

Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?

(Multiple Choice)

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Question 143

Which of the following accounts probably would be greater in amount on an adjusted trial balance than on a trial balance?

(Multiple Choice)

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Question 144

Which of the following is an example of a deferral?

(Multiple Choice)

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Question 145

When a net loss occurs,the Owner's Capital account will contain a negative balance.

(True/False)

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Question 146

A contra account is an account whose balance is subtracted from an associated account in the financial statements.

(True/False)

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Question 147

Wages Payable was $350 at the end of October and $280 at the end of November.Wages Expense for November was $2,000.How much cash was paid for wages during November?

(Multiple Choice)

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Question 148

Which of the following transactions does not result in an increase in expenses?

(Multiple Choice)

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Question 149

Which of the following accounts could not be credited in an adjusting entry?

(Multiple Choice)

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Question 150

An adjusting entry can include a debit to a(n)

(Multiple Choice)

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Question 151

As the usefulness of a plant asset expires,

(Multiple Choice)

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Question 152

As an asset's depreciation is recorded,its carrying value decreases.

(True/False)

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Question 153

Which of the following transactions results in the recognition of an expense?

(Multiple Choice)

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Question 154

An adjusted trial balance proves the balance of the ledger accounts after the adjusting entries have been posted.

(True/False)

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Question 155

The recording of an expense could result in a corresponding increase in

(Multiple Choice)

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Question 156

The adjustment for estimated property taxes would include a

(Multiple Choice)

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Question 157

The cash basis of accounting is prohibited for income tax purposes.

(True/False)

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Question 158

Which of the following is correct regarding accrual accounting?

(Multiple Choice)

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Question 159

State whether each situation is a deferral or an accrual.

Property taxes that have been incurred but that have not yet been paid or recorded amount to $1,034.

Deferral

Services totaling $690 have been performed but not yet recorded or billed.

Accural

Salaries earned by employees by year end but not yet paid or recorded amounted to $1,655.

Correct Answer:

Verified

Property taxes that have been incurred but that have not yet been paid or recorded amount to $1,034.

Services totaling $690 have been performed but not yet recorded or billed.

(Matching)

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Question 160

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Exam 3: Adjusting the Accounts

The accrual basis of accounting results in a more accurate measurement of net income for the period than does the cash basis of accounting.

Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?

Which of the following accounts probably would be greater in amount on an adjusted trial balance than on a trial balance?

Which of the following is an example of a deferral?

When a net loss occurs,the Owner's Capital account will contain a negative balance.

A contra account is an account whose balance is subtracted from an associated account in the financial statements.

Wages Payable was $350 at the end of October and $280 at the end of November.Wages Expense for November was $2,000.How much cash was paid for wages during November?

Which of the following transactions does not result in an increase in expenses?

Which of the following accounts could not be credited in an adjusting entry?

An adjusting entry can include a debit to a(n)

As the usefulness of a plant asset expires,

As an asset's depreciation is recorded,its carrying value decreases.

Which of the following transactions results in the recognition of an expense?

An adjusted trial balance proves the balance of the ledger accounts after the adjusting entries have been posted.

The recording of an expense could result in a corresponding increase in

The adjustment for estimated property taxes would include a

The cash basis of accounting is prohibited for income tax purposes.

Which of the following is correct regarding accrual accounting?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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