Question 1

Which of the following statements is not correct?

Accepted Answer

A)  The difference between the total of the Income Statement Debit column and the total of the Income Statement Credit column of the worksheet represents either net income or net loss. 
B)  Net income is recorded on the worksheet in the Income Statement Debit column and the Balance Sheet Credit column. 
C)  Only the balances of accounts that are affected by adjustments must be recalculated before they are recorded in the Adjusted Trial Balance section of the worksheet. 
D)  If an account has a debit balance in the Trial Balance section of the worksheet and there is a credit entry in the Adjustments section, the credit amount is added when computing the balance to be shown in the Adjusted Trial Balance section of the worksheet. 
A)  The difference between the total of the Income Statement Debit column and the total of the Income Statement Credit column of the worksheet represents either net income or net loss. 
B)  Net income is recorded on the worksheet in the Income Statement Debit column and the Balance Sheet Credit column. 
C)  Only the balances of accounts that are affected by adjustments must be recalculated before they are recorded in the Adjusted Trial Balance section of the worksheet. 
D)  If an account has a debit balance in the Trial Balance section of the worksheet and there is a credit entry in the Adjustments section, the credit amount is added when computing the balance to be shown in the Adjusted Trial Balance section of the worksheet.

Question 2

Read the description of following adjustments that are required at the end of the accounting period for Hubbard Repair Services. Determine the account and amount to be debited and the account and amount to be credited.
A. Purchased supplies for $2,000 on November 1, 2013. Inventory of supplies was $600 on November 30, 2013. Record the adjustment for the amount of the supplies that were used during the month of November 2013.
B. Signed a 4-month contract for $2,400 of prepaid advertising on November 1, 2013. Record the adjustment for the amount of the advertising contract that expired during the month of November 2013.
C. Prepaid rent for the year on November 1, 2013. Rent expired during the month of November 2013, $1,500. Record the adjustment on November 30, 2013.
D. Depreciation is computed using the straight-line method. Equipment purchased on November 1, 2013, for $6,000 has an estimated useful life of 5 years with no salvage value. Record the adjustment on November 30, 2013.

Accepted Answer

A. Debit Supplies Expense, $1,400; credi

Question 3

On a worksheet, the adjusting entry to account for depreciation of equipment consists of

Accepted Answer

A)  a debit to Depreciation Expense and a credit to Equipment. 
B)  a debit to Depreciation Expense and a credit to Accumulated Depreciation. 
C)  a debit to Equipment and a credit to Accumulated Depreciation. 
D)  a debit to Accumulated Depreciation and a credit to Equipment. 
A)  a debit to Depreciation Expense and a credit to Equipment. 
B)  a debit to Depreciation Expense and a credit to Accumulated Depreciation. 
C)  a debit to Equipment and a credit to Accumulated Depreciation. 
D)  a debit to Accumulated Depreciation and a credit to Equipment.

Question 4

When the liabilities and owner's equity section is listed under the assets section, the firm is using the ____________________ form balance sheet.

Accepted Answer

The answer of When the liabilities and owner's equity section...

Question 5

Which of the following statements is correct?

Accepted Answer

A)  The cost of supplies used is reported on the statement of owner's equity. 
B)  The cost of supplies used represents an operating expense of the business. 
C)  Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet. 
D)  At the time of their acquisition, prepaid expenses are recorded in expense accounts. 
A)  The cost of supplies used is reported on the statement of owner's equity. 
B)  The cost of supplies used represents an operating expense of the business. 
C)  Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet. 
D)  At the time of their acquisition, prepaid expenses are recorded in expense accounts.

Question 6

The balances of the revenue accounts are recorded in the Trial Balance Credit column, the Adjusted Trial Balance Credit column, and the Balance Sheet Credit column of the worksheet.

Accepted Answer

A) True 
 B)False

Question 7

The balances of the ledger accounts for Oleman Services on January 31, 2013, and the information needed for adjustments are shown below. Prepare the Trial Balance section, record the adjustments, and complete the worksheet.   Adjustment information:
(a) The supplies were purchased on January 1, 2013. An inventory of supplies showed $600 on hand on January 31, 2013.
(b) The amount of Prepaid Insurance represents a payment made January 1, 2013, for a six-month insurance policy.
(c) The equipment, purchased January 1, 2013, has an estimated useful life of 5 years with no salvage value. The firm uses the straight-line method of depreciation.

Accepted Answer

The answer of The balances of the ledger accounts for...

Question 8

Accumulated Depreciation, Equipment, is shown as:

Accepted Answer

A)  a liability on the Balance Sheet 
B)  a reduction of Capital on the Statement of Owner's Equity 
C)  a contra asset on the Balance Sheet 
D)  an expense on the Income Statement 
A)  a liability on the Balance Sheet 
B)  a reduction of Capital on the Statement of Owner's Equity 
C)  a contra asset on the Balance Sheet 
D)  an expense on the Income Statement

Question 9

Which of the following statements is not correct?

Accepted Answer

A)  Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset. 
B)  The book value of a long-term asset is reduced each year as depreciation is recorded. 
C)  Buildings and trucks are examples of long-term assets. 
D)  Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset. 
A)  Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset. 
B)  The book value of a long-term asset is reduced each year as depreciation is recorded. 
C)  Buildings and trucks are examples of long-term assets. 
D)  Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset.

Question 10

A(n) ____________________ is a comparison of the general ledger accounts with debit balances to the general ledger accounts with credit balances to make sure that the debit and credit totals are equal.

Accepted Answer

The answer of A(n) ____________________ is a comparison of the...

Question 11

Read each of the following transactions for Patel's Repair Services. Determine the accounts to be debited and credited in the necessary end-of-May adjustments.
A. On May 1, 2013, Patel's Repair Services, a new firm, paid $6,600 rent in advance for a six-month period. The $6,600 was debited to the Prepaid Rent account.
B. On May 1, 2013, the firm bought supplies for $2,000. The $2,000 was debited to the Supplies account. An inventory of supplies at the end of May showed that supplies costing $800 were on hand.
C. On May 1, 2013, the firm bought equipment costing $10,000. The equipment has an expected useful life of 10 years and no salvage value. The firm will use the straight-line method of depreciation.

Accepted Answer

A. Rent Expense (dr.); Prepaid

Question 12

Adjusting Entries are

Accepted Answer

A)  corrections of errors. 
B)  needed for expenses that were paid for before or after they were used. 
C)  not required. 
D)  will always affect cash. 
A)  corrections of errors. 
B)  needed for expenses that were paid for before or after they were used. 
C)  not required. 
D)  will always affect cash.

Question 13

The balance of a liability account is extended to the Balance Sheet Credit column of the worksheet.

Accepted Answer

A) True 
 B)False

Question 14

Preparation of a worksheet eliminates the necessity of preparing an income statement and a balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

On a worksheet, the adjusted balance of the Supplies Expense account is extended to:

Accepted Answer

A)  the Income Statement Debit column. 
B)  the Income Statement Credit column. 
C)  the Balance Sheet Debit column. 
D)  the Balance Sheet Credit column. 
A)  the Income Statement Debit column. 
B)  the Income Statement Credit column. 
C)  the Balance Sheet Debit column. 
D)  the Balance Sheet Credit column.

Question 16

Read the description of following adjustments that are required at the end of the accounting period for AAA Appliance Repair Services. Record the necessary adjusting entries on page 2 of a general journal. Omit the descriptions.
A. Prepaid rent for the year on January 1, 2013. Rent expired during the month of January 2013, $2,000.
B. Purchased supplies for $7,600 on January 1, 2013. Inventory of supplies was $1,600 on January 30, 2013.
C. Depreciation is computed using the straight-line method. Equipment purchased on January 1, 2013, for $15,000 has an estimated useful life of 5 years with no salvage value.
D. Signed a 3-month contract for $600 of prepaid advertising on January 1, 2013.

Accepted Answer

The answer of Read the description of following adjustments that...

Question 17

When a trial balance is in balance,

Accepted Answer

A)  adjusting entries are not required. 
B)  the general ledger is free of errors. 
C)  the debit account balances equal the credit account balances. 
D)  the company has earned a net income. 
A)  adjusting entries are not required. 
B)  the general ledger is free of errors. 
C)  the debit account balances equal the credit account balances. 
D)  the company has earned a net income.

Question 18

The adjusting entry to account for the use of supplies consists of

Accepted Answer

A)  a debit to Supplies Expense and a credit to Supplies. 
B)  a debit to Supplies and a credit to Supplies Expense. 
C)  a debit to Supplies and a credit to Accumulated Depreciation. 
D)  a debit to Accumulated Depreciation and a credit to Supplies. 
A)  a debit to Supplies Expense and a credit to Supplies. 
B)  a debit to Supplies and a credit to Supplies Expense. 
C)  a debit to Supplies and a credit to Accumulated Depreciation. 
D)  a debit to Accumulated Depreciation and a credit to Supplies.

Question 19

Read each of the following transactions for Gallagher Enterprises. Determine the accounts and amounts to be debited and credited in the necessary end-of-January adjustments.
A. On January 1, 2013, Gallagher Enterprises, a new firm, paid $6,000 rent in advance for a three-month period. The $6,000 was debited to the Prepaid Rent account.
B. On January 1, 2013, the firm bought supplies for $3,000. The $3,000 was debited to the Supplies account. An inventory of supplies at the end of June showed that supplies costing $1,000 were on hand.
C. On January 1, 2013, the firm bought equipment costing $12,000. The equipment has an expected useful life of 10 years and no salvage value. The firm will use the straight-line method of depreciation.

Accepted Answer

A. Rent Expense (dr.) $2,000;

Question 20

On November 25, 2013, the company paid $24,000 rent in advance for a six-month period (December 2013 through May 2014). On December 31, 2013, the adjustment for expired rent would include

Accepted Answer

A)  a $4,000 debit to Prepaid Rent. 
B)  a $4,000 credit to Rent Expense. 
C)  a $24,000 debit to Rent Expense. 
D)  a $4,000 credit to Prepaid Rent. 
A)  a $4,000 debit to Prepaid Rent. 
B)  a $4,000 credit to Rent Expense. 
C)  a $24,000 debit to Rent Expense. 
D)  a $4,000 credit to Prepaid Rent.

Which of the following statements is not correct?

On a worksheet, the adjusting entry to account for depreciation of equipment consists of

When the liabilities and owner's equity section is listed under the assets section, the firm is using the ____________________ form balance sheet.

Which of the following statements is correct?

The balances of the revenue accounts are recorded in the Trial Balance Credit column, the Adjusted Trial Balance Credit column, and the Balance Sheet Credit column of the worksheet.

Accumulated Depreciation, Equipment, is shown as:

Which of the following statements is not correct?

A(n) ____________________ is a comparison of the general ledger accounts with debit balances to the general ledger accounts with credit balances to make sure that the debit and credit totals are equal.

Adjusting Entries are

The balance of a liability account is extended to the Balance Sheet Credit column of the worksheet.

Preparation of a worksheet eliminates the necessity of preparing an income statement and a balance sheet.

On a worksheet, the adjusted balance of the Supplies Expense account is extended to:

When a trial balance is in balance,

The adjusting entry to account for the use of supplies consists of

On November 25, 2013, the company paid $24,000 rent in advance for a six-month period (December 2013 through May 2014). On December 31, 2013, the adjustment for expired rent would include

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Filters

Exam 5: Adjustments and the Worksheet

Which of the following statements is not correct?

On a worksheet, the adjusting entry to account for depreciation of equipment consists of

When the liabilities and owner's equity section is listed under the assets section, the firm is using the ____________________ form balance sheet.

Which of the following statements is correct?

The balances of the revenue accounts are recorded in the Trial Balance Credit column, the Adjusted Trial Balance Credit column, and the Balance Sheet Credit column of the worksheet.

Accumulated Depreciation, Equipment, is shown as:

Which of the following statements is not correct?

A(n) ____________________ is a comparison of the general ledger accounts with debit balances to the general ledger accounts with credit balances to make sure that the debit and credit totals are equal.

Adjusting Entries are

The balance of a liability account is extended to the Balance Sheet Credit column of the worksheet.

Preparation of a worksheet eliminates the necessity of preparing an income statement and a balance sheet.

On a worksheet, the adjusted balance of the Supplies Expense account is extended to:

When a trial balance is in balance,

The adjusting entry to account for the use of supplies consists of

On November 25, 2013, the company paid $24,000 rent in advance for a six-month period (December 2013 through May 2014). On December 31, 2013, the adjustment for expired rent would include

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Filters