Question 1

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

Accepted Answer

Net income is determined by subtracting

Question 2

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.

Accepted Answer

a.Wages and interest are expenses that c

Question 3

Which of the following actions can distort company records and result in fraudulent financial reporting?

Accepted Answer

A) Prepaying an expense and recording it as an asset. 
B) Collecting revenue in advance of earning it. 
C) Recording revenue that has not yet been earned. 
D) Recording an expense that has been incurred but has not yet been paid. 
A) Prepaying an expense and recording it as an asset. 
B) Collecting revenue in advance of earning it. 
C) Recording revenue that has not yet been earned. 
D) Recording an expense that has been incurred but has not yet been paid.

Question 4

Revenue is equal to the cash received by a company during an accounting period.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

If an adjusting entry is not made at the end of an accounting period to remove the earned revenue from the Unearned Revenue account,

Accepted Answer

A) assets would be understated. 
B) owner's equity would be overstated. 
C) liabilities would be understated. 
D) liabilities would be overstated. 
A) assets would be understated. 
B) owner's equity would be overstated. 
C) liabilities would be understated. 
D) liabilities would be overstated.

Question 7

Which of the following pairs of accounts could possibly appear in the same adjusting entry?

Accepted Answer

A) Interest Income and Interest Payable. 
B) Revenue from Services and Cash. 
C) Service Revenue and Unearned Revenue. 
D) Rent Expense and Depreciation Expense. 
A) Interest Income and Interest Payable. 
B) Revenue from Services and Cash. 
C) Service Revenue and Unearned Revenue. 
D) Rent Expense and Depreciation Expense.

Question 8

Which of the following accounts is a contra account?

Accepted Answer

A) Accumulated Depreciation-Office Furniture 
B) Interest Payable 
C) Depreciation Expense-Office Furniture 
D) Unearned Revenue 
A) Accumulated Depreciation-Office Furniture 
B) Interest Payable 
C) Depreciation Expense-Office Furniture 
D) Unearned Revenue

Question 9

A company's five-day weekly payroll of $890 is paid on Fridays.Assume that the last day of the month falls on Tuesday.Which of the following is the required adjusting entry for the month end?

Accepted Answer

A) Debit Salaries Payable $534 and credit Salaries Expense $534. 
B) Debit Salaries Expense $534 and credit Salaries Payable $534. 
C) Debit Unpaid Salaries $356 and credit Salaries Payable $356. 
D) Debit Salaries Expense $356 and credit Salaries Payable $356. 
A) Debit Salaries Payable $534 and credit Salaries Expense $534. 
B) Debit Salaries Expense $534 and credit Salaries Payable $534. 
C) Debit Unpaid Salaries $356 and credit Salaries Payable $356. 
D) Debit Salaries Expense $356 and credit Salaries Payable $356.

Question 10

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

Accepted Answer

A) Unearned Revenue and Service Revenue 
B) Wages Expense and Wages Payable 
C) Interest Expense and Interest Receivable 
D) Rent Expense and Rent Payable 
A) Unearned Revenue and Service Revenue 
B) Wages Expense and Wages Payable 
C) Interest Expense and Interest Receivable 
D) Rent Expense and Rent Payable

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following accounts could decrease as a result of adjusting entries?

Accepted Answer

A) Prepaid Insurance. 
B) Accumulated Depreciation-Buildings. 
C) Rent Expense. 
D) Service Revenue. 
A) Prepaid Insurance. 
B) Accumulated Depreciation-Buildings. 
C) Rent Expense. 
D) Service Revenue.

Question 13

Custom Enterprises had supplies on hand costing $3,840 at the beginning of the year and $4,800 at the end of the year.During the year,supplies totaling $7,600 were consumed.How much was the total cost of supplies purchased during the year?

Accepted Answer

($7,600 +

Question 14

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?

Accepted Answer

A) $1,930 
B) $2,630 
C) $2,070 
D) $1,370 
A) $1,930 
B) $2,630 
C) $2,070 
D) $1,370

Question 15

For each of the following oversights,state whether owner's equity will be understated,overstated,or not affected.
______ a.Failure to record depreciation
______ b.Failure to record accrued wages
______ c.Failure to convert unearned revenue to earned revenue
______ d.Failure to record accrued interest in the bank
______ e.Failure to record expired insurance
______ f.Failure to record revenue earned but not yet received

Accepted Answer

a.Overstated b.Overs

Question 16

Which of the following is a condition required by the SEC for the recognition of revenue?

Accepted Answer

A) Completion of goods manufactured. 
B) Execution of a promissory note. 
C) Price in excess of $100. 
D) Reasonable assurance of collection. 
A) Completion of goods manufactured. 
B) Execution of a promissory note. 
C) Price in excess of $100. 
D) Reasonable assurance of collection.

Question 17

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

Accepted Answer

A) Wages Payable 
B) Unearned Revenue 
C) Prepaid Advertising 
D) Painting Supplies 
A) Wages Payable 
B) Unearned Revenue 
C) Prepaid Advertising 
D) Painting Supplies

Question 18

Revenue is produced when accounts receivable are collected.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) Service Revenue 
B) Prepaid Rent 
C) Office Supplies 
D) Interest Receivable 
A) Service Revenue 
B) Prepaid Rent 
C) Office Supplies 
D) Interest Receivable

Question 20

Which of the following is an example of an accrual?

Accepted Answer

A) The purchase of office supplies. 
B) Wages expense incurred but not yet paid. 
C) Rent revenue collected in advance. 
D) Payment of two years' insurance in advance. 
A) The purchase of office supplies. 
B) Wages expense incurred but not yet paid. 
C) Rent revenue collected in advance. 
D) Payment of two years' insurance in advance.

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

Which of the following actions can distort company records and result in fraudulent financial reporting?

Revenue is equal to the cash received by a company during an accounting period.

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

If an adjusting entry is not made at the end of an accounting period to remove the earned revenue from the Unearned Revenue account,

Which of the following pairs of accounts could possibly appear in the same adjusting entry?

Which of the following accounts is a contra account?

A company's five-day weekly payroll of $890 is paid on Fridays.Assume that the last day of the month falls on Tuesday.Which of the following is the required adjusting entry for the month end?

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

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

Which of the following accounts could decrease as a result of adjusting entries?

Custom Enterprises had supplies on hand costing $3,840 at the beginning of the year and $4,800 at the end of the year.During the year,supplies totaling $7,600 were consumed.How much was the total cost of supplies purchased during the year?

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 is a condition required by the SEC for the recognition of revenue?

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

Revenue is produced when accounts receivable are collected.

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

Which of the following is an example of an accrual?

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

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.

Which of the following actions can distort company records and result in fraudulent financial reporting?

Revenue is equal to the cash received by a company during an accounting period.

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

If an adjusting entry is not made at the end of an accounting period to remove the earned revenue from the Unearned Revenue account,

Which of the following pairs of accounts could possibly appear in the same adjusting entry?

Which of the following accounts is a contra account?

A company's five-day weekly payroll of $890 is paid on Fridays.Assume that the last day of the month falls on Tuesday.Which of the following is the required adjusting entry for the month end?

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

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

Which of the following accounts could decrease as a result of adjusting entries?

Custom Enterprises had supplies on hand costing $3,840 at the beginning of the year and $4,800 at the end of the year.During the year,supplies totaling $7,600 were consumed.How much was the total cost of supplies purchased during the year?

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 is a condition required by the SEC for the recognition of revenue?

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

Revenue is produced when accounts receivable are collected.

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

Which of the following is an example of an accrual?

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