Question 1

In applying the matching rule,revenue recognition should come before the matching (assignment)of expense.

Accepted Answer

A) True 
 B)False

Question 2

A net loss results in a decrease in

Accepted Answer

A) revenues. 
B) expenses. 
C) owner's equity. 
D) liabilities. 
A) revenues. 
B) expenses. 
C) owner's equity. 
D) liabilities.

Question 3

Accounting periods should be of equal length to facilitate comparisons between periods.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an example of a deferral?

Accepted Answer

A) Debit Salaries Expense,credit Salaries Payable 
B) Debit Accounts Receivable,credit Service Revenue 
C) Debit Property Taxes Expense,credit Property Taxes Payable 
D) Debit Insurance Expense,credit Prepaid Insurance 
A) Debit Salaries Expense,credit Salaries Payable 
B) Debit Accounts Receivable,credit Service Revenue 
C) Debit Property Taxes Expense,credit Property Taxes Payable 
D) Debit Insurance Expense,credit Prepaid Insurance

Question 5

Distinguish between a deferral and an accrual.

Accepted Answer

A deferral is the postponement of the re

Question 6

An adjusting entry includes at least one balance sheet account and at least one income statement account.

Accepted Answer

A) True 
 B)False

Question 7

An adjusted trial balance will probably list fewer accounts than are listed in the trial balance.

Accepted Answer

A) True 
 B)False

Question 8

Joan Miller owns an advertising agency.One of the adjustments her accountant made at the end of July was $360 for unpaid wages of the secretary.Joan Miller might ask,"Why go to the trouble of making this adjustment? Why worry about it? Doesn't everything come out in the end,when the secretary is paid in August? Because wages expense in total is the same for the two months,isn't the net income in total unchanged?" Give three reasons why adjusting entries can help Joan Miller assess the performance of her business.(Net income was $1,600.)

Accepted Answer

Adjusting entries are important because

Question 9

How and why is the matching rule applied to the cost of a building?

Accepted Answer

The matching rule requires that the cost

Question 10

Profitability is best determined from cash flow information.

Accepted Answer

A) True 
 B)False

Question 11

Revenues

Accepted Answer

A) are decreases in equity resulting from rendering services. 
B) are a cost of doing business. 
C) are called expired costs. 
D) are earned through the sale of goods,even though the cash may not be collected until later. 
A) are decreases in equity resulting from rendering services. 
B) are a cost of doing business. 
C) are called expired costs. 
D) are earned through the sale of goods,even though the cash may not be collected until later.

Question 12

An adjusting entry made to record salaries earned but not yet paid or recorded is made with which of the following entries?

Accepted Answer

A) Salaries Expense - Debit; Cash - Credit 
B) Salaries Payable - Debit; Salaries Expense - Credit 
C) Salaries Expense - Debit; Salaries Payable - Credit 
D) Cash - Debit; Salaries Expense - Credit 
A) Salaries Expense - Debit; Cash - Credit 
B) Salaries Payable - Debit; Salaries Expense - Credit 
C) Salaries Expense - Debit; Salaries Payable - Credit 
D) Cash - Debit; Salaries Expense - Credit

Question 13

A customer's promise to pay for goods or services

Accepted Answer

A) increases the company's liabilities. 
B) decreases the company's Cash account. 
C) creates a liability for the company. 
D) increases the assets of the company. 
A) increases the company's liabilities. 
B) decreases the company's Cash account. 
C) creates a liability for the company. 
D) increases the assets of the company.

Question 14

The income statement for Catlett Company included the following revenues and expenses for 20x5:
   Listed below are the related balance sheet account balances at year end for this year and last year:
   a.Compute cash received for fees during the year.
b.Compute cash paid for wages during the year.
c.Compute cash paid for insurance during the year.
d.Compute cash paid for interest during the year.

Accepted Answer

a.$104,200 ($7,800 + $103,000

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

All increases to owner's equity are from revenues.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following accounts probably would not appear in a trial balance but probably would appear in an adjusted trial balance?

Accepted Answer

A) Accumulated Depreciation-Equipment 
B) Cash 
C) Office Supplies Expense 
D) Owner's Withdrawals 
A) Accumulated Depreciation-Equipment 
B) Cash 
C) Office Supplies Expense 
D) Owner's Withdrawals

Question 18

The manipulation of revenues and expenses to achieve a specific outcome is called

Accepted Answer

A) earnings management. 
B) the matching rule. 
C) adjusting entries. 
D) revenue recognition. 
A) earnings management. 
B) the matching rule. 
C) adjusting entries. 
D) revenue recognition.

Question 19

The following steps in the accounting cycle are presented out of order below.Arrange the steps in proper order by placing a number from 1 through 6 in the blanks provided.Also identify each step as either a recurring activity (RA)-one that would be repeated during the fiscal period-or an end-of-period activity (EOP)-one performed at the end of the accounting period.
______ a.Prepare an adjusted trial balance.
______ b.Record entries in the journal.
______ c.Adjust the accounts.
______ d.Prepare a trial balance.
______ e.Analyze business transactions from source documents.
______ f.Post entries to the ledger.

Accepted Answer

a.6 EOP b.

Question 20

Which of the following transactions will not result in an increase in revenues?

Accepted Answer

A) Sale of goods on credit. 
B) Sale of services for cash. 
C) Accumulation of interest in bank account. 
D) An investment into the business by the owner. 
A) Sale of goods on credit. 
B) Sale of services for cash. 
C) Accumulation of interest in bank account. 
D) An investment into the business by the owner.

In applying the matching rule,revenue recognition should come before the matching (assignment)of expense.

A net loss results in a decrease in

Accounting periods should be of equal length to facilitate comparisons between periods.

Which of the following is an example of a deferral?

Distinguish between a deferral and an accrual.

An adjusting entry includes at least one balance sheet account and at least one income statement account.

An adjusted trial balance will probably list fewer accounts than are listed in the trial balance.

How and why is the matching rule applied to the cost of a building?

Profitability is best determined from cash flow information.

Revenues

An adjusting entry made to record salaries earned but not yet paid or recorded is made with which of the following entries?

A customer's promise to pay for goods or services

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

All increases to owner's equity are from revenues.

Which of the following accounts probably would not appear in a trial balance but probably would appear in an adjusted trial balance?

The manipulation of revenues and expenses to achieve a specific outcome is called

Which of the following transactions will not result in an increase in revenues?

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

Supplement: 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

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

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Exam 3: Adjusting the Accounts

In applying the matching rule,revenue recognition should come before the matching (assignment)of expense.

A net loss results in a decrease in

Accounting periods should be of equal length to facilitate comparisons between periods.

Which of the following is an example of a deferral?

Distinguish between a deferral and an accrual.

An adjusting entry includes at least one balance sheet account and at least one income statement account.

An adjusted trial balance will probably list fewer accounts than are listed in the trial balance.

How and why is the matching rule applied to the cost of a building?

Profitability is best determined from cash flow information.

Revenues

An adjusting entry made to record salaries earned but not yet paid or recorded is made with which of the following entries?

A customer's promise to pay for goods or services

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

All increases to owner's equity are from revenues.

Which of the following accounts probably would not appear in a trial balance but probably would appear in an adjusted trial balance?

The manipulation of revenues and expenses to achieve a specific outcome is called

Which of the following transactions will not result in an increase in revenues?

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

Supplement: 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

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters