Question 1

The general journal has all journal entry transactions listed by account title.

Accepted Answer

A) True 
 B)False

Question 2

Selected adjusting entries follow:    Required:
Indicate by Yes or No which of the preceding adjusting entries could be reversed.

Accepted Answer

a.	No
b.	Y

Question 3

On March 31, 2014, the Turi Company purchased a two-year fire insurance policy. Turi recorded the purchase by debiting Prepaid Insurance and crediting Cash for $10,000. Which of the following adjusting entries should Trident prepare at the end of 2014?

Accepted Answer

A)  Prepaid Insurance 3,750 
Insurance Expense 3,750 
B)  Insurance Expense 3,750 
Prepaid Insurance 3,750 
C)  Prepaid Insurance 5,500 
Insurance Expense 5,500 
D)  Insurance Expense 5,000 
Prepaid Insurance 5,000 
A)  Prepaid Insurance 3,750 
Insurance Expense 3,750 
B)  Insurance Expense 3,750 
Prepaid Insurance 3,750 
C)  Prepaid Insurance 5,500 
Insurance Expense 5,500 
D)  Insurance Expense 5,000 
Prepaid Insurance 5,000

Question 4

The accounting equations is

Accepted Answer

A)  Assets = Liabilities - Shareholders' Equity 
B)  Assets + Liabilities = Shareholders' Equity 
C)  Assets-Liabilities = Shareholders' Equity 
D)  Assets + Shareholders' Equity = Liabilities 
A)  Assets = Liabilities - Shareholders' Equity 
B)  Assets + Liabilities = Shareholders' Equity 
C)  Assets-Liabilities = Shareholders' Equity 
D)  Assets + Shareholders' Equity = Liabilities

Question 5

If the credit subtotal is greater than the debit subtotal in the Income Statement columns of a worksheet, the difference

Accepted Answer

A)  indicates that the company incurred an operating loss during the period 
B)  could represent payment of dividends by the entity during the period 
C)  indicates that an error has been made in the accounting process 
D)  indicates that the company earned a net income during the period 
A)  indicates that the company incurred an operating loss during the period 
B)  could represent payment of dividends by the entity during the period 
C)  indicates that an error has been made in the accounting process 
D)  indicates that the company earned a net income during the period

Question 6

In terms of debits and credits, which types of accounts will have the same (debit or credit) normal balances?

Accepted Answer

A)  dividends, expenses, assets 
B)  assets, capital stock, revenues 
C)  retained earnings, dividends, liabilities 
D)  expenses, liabilities, capital stock 
A)  dividends, expenses, assets 
B)  assets, capital stock, revenues 
C)  retained earnings, dividends, liabilities 
D)  expenses, liabilities, capital stock

Question 7

What are adjusting entries and why are they necessary?

Accepted Answer

Adjusting entries are required so that a

Question 8

Cash-basis accounting is

Accepted Answer

A)  allowed under GAAP 
B)  not allowed under GAAP 
C)  preferred under GAAP 
D)  used by most companies 
A)  allowed under GAAP 
B)  not allowed under GAAP 
C)  preferred under GAAP 
D)  used by most companies

Question 9

The following are selected data for the Young Company:   Required:
Compute the following: 
a.Sales
b.Purchase returns
c.Selling expenses
d.Cost of goods sold
Note: Solve in the following order: a, c, d, b.

Accepted Answer

a.$11,230 (Net sales $10,050 + Sales ret

Question 10

Which of the following errors will be detected by a trial balance?

Accepted Answer

A)  posting a credit to Sales instead of to Accounts Payable 
B)  incorrectly computing the balance of the cash account 
C)  failure to journalize a sales transaction at all 
D)  forgetting to post a purchase transaction at all 
A)  posting a credit to Sales instead of to Accounts Payable 
B)  incorrectly computing the balance of the cash account 
C)  failure to journalize a sales transaction at all 
D)  forgetting to post a purchase transaction at all

Question 11

Net sales are computed as sales minus sales returns and allowances and purchase discounts.

Accepted Answer

A) True 
 B)False

Question 12

What is the difference between a subsidiary ledger and a special journal?

Accepted Answer

The subsidiary ledger are a group of acc

Question 13

The Samuel Company uses the straight-line method to depreciate its equipment. On May 1, 2014, the company purchased some equipment for $224,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. If depreciation is to be recorded for each month the equipment is owned, how much depreciation expense should Samuel record for the equipment in the adjusting entry on December 31, 2014?

Accepted Answer

A)  $20,400 
B)  $18,500 
C)  $13,600 
D)  $ 8,500 
A)  $20,400 
B)  $18,500 
C)  $13,600 
D)  $ 8,500

Question 14

Several accounts are listed below: 
a.	Purchases Returns and Allowances
b.	Sales Discounts
c.	Wages Expense
d.	Allowance for Doubtful Accounts
e.	Unearned Rent
f.	Income Taxes Payable
g.	Dividends
h.	Interest Revenue
i.	Discount on Bonds Payable
j.	Common Stock
k.	Additional Paid in Capital-Common Stock
l.	Inventory

Required:
List the accounts above that would normally have a debit balance.

Accepted Answer

The answer of Several accounts are listed below: 
a.	Purchases Returns...

Question 15

On August 1, 2013, Yellow Company paid $6,320 for a three-year insurance policy. On that date, an expense account was charged. In the adjusting entry on December 31, 2013, there would be a

Accepted Answer

A)  debit to Insurance Expense for $175 
B)  credit to Prepaid Insurance for $2107 
C)  credit to Prepaid Insurance for $527 
D)  credit to Insurance Expense for $5,442 
A)  debit to Insurance Expense for $175 
B)  credit to Prepaid Insurance for $2107 
C)  credit to Prepaid Insurance for $527 
D)  credit to Insurance Expense for $5,442

Question 16

Special journals, including the sales, purchases, cash receipts, cash payments, and general journals, were discussed in the textbook. Indicate (a) the reasons why special journals may be used, and (b) which transactions would appear in each of the five journals.

Accepted Answer

a.	Special journals (1) allow the accoun

Question 17

The purpose of closing entries is to

Accepted Answer

A)  update a periodic inventory account for credit sales 
B)  update the retained earnings account on a daily basis 
C)  apportion prepaid expenses and unearned revenues to bring the accounts up to date 
D)  reduce all temporary accounts to zero 
A)  update a periodic inventory account for credit sales 
B)  update the retained earnings account on a daily basis 
C)  apportion prepaid expenses and unearned revenues to bring the accounts up to date 
D)  reduce all temporary accounts to zero

Question 18

Which of the following transactions would be recorded in a sales journal of the type illustrated in the text?

Accepted Answer

A)  customer return of merchandise originally bought on credit 
B)  customer purchase of merchandise for cash 
C)  sale by a used car dealer of part of the property surrounding his display lot 
D)  customer purchase of merchandise on credit terms 
A)  customer return of merchandise originally bought on credit 
B)  customer purchase of merchandise for cash 
C)  sale by a used car dealer of part of the property surrounding his display lot 
D)  customer purchase of merchandise on credit terms

Question 19

The another interpretation of the accounting equation is Assets = Liabilities + Contributed Capital + Beginning Retained Earnings + Net Income - Dividends + Beginning Accumulated Other Comprehensive Income + Other Comprehensive Income.

Accepted Answer

A) True 
 B)False

Question 20

Operating expenses would include

Accepted Answer

A)  cost of goods sold 
B)  material but nonextraordinary gains 
C)  selling expenses 
D)  dividend revenue 
A)  cost of goods sold 
B)  material but nonextraordinary gains 
C)  selling expenses 
D)  dividend revenue

Exam 3: Review of a Companys Accounting System

The general journal has all journal entry transactions listed by account title.

Selected adjusting entries follow: Required: Indicate by Yes or No which of the preceding adjusting entries could be reversed.

On March 31, 2014, the Turi Company purchased a two-year fire insurance policy. Turi recorded the purchase by debiting Prepaid Insurance and crediting Cash for $10,000. Which of the following adjusting entries should Trident prepare at the end of 2014?

The accounting equations is

If the credit subtotal is greater than the debit subtotal in the Income Statement columns of a worksheet, the difference

In terms of debits and credits, which types of accounts will have the same (debit or credit) normal balances?

What are adjusting entries and why are they necessary?

Cash-basis accounting is

The following are selected data for the Young Company: Required: Compute the following: a.Sales b.Purchase returns c.Selling expenses d.Cost of goods sold Note: Solve in the following order: a, c, d, b.

Which of the following errors will be detected by a trial balance?

Net sales are computed as sales minus sales returns and allowances and purchase discounts.

What is the difference between a subsidiary ledger and a special journal?

On August 1, 2013, Yellow Company paid $6,320 for a three-year insurance policy. On that date, an expense account was charged. In the adjusting entry on December 31, 2013, there would be a

Special journals, including the sales, purchases, cash receipts, cash payments, and general journals, were discussed in the textbook. Indicate (a) the reasons why special journals may be used, and (b) which transactions would appear in each of the five journals.

The purpose of closing entries is to

Which of the following transactions would be recorded in a sales journal of the type illustrated in the text?

The another interpretation of the accounting equation is Assets = Liabilities + Contributed Capital + Beginning Retained Earnings + Net Income - Dividends + Beginning Accumulated Other Comprehensive Income + Other Comprehensive Income.

Operating expenses would include

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

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