Question 1

It's the end of the accounting period and no electric bill has been received (but the expense has been incurred); you should record an entry that

Accepted Answer

A)  increases the total assets and increases the total expenses. 
B)  decreases the total assets and increases the total expenses. 
C)  increases the total liabilities and increases the total expenses. 
D)  decreases the total liabilities and increases the total expenses.

Question 2

Provide the adjusting entries to account for the differences between the trial balance amounts and the adjusted trial balance amounts for the accounts shown. Only a partial trial balance is provided. Use T accounts to show the adjustments.
$$\begin{array}{l}
\text {                                                                                           Adjusted }\
\begin{array} { l c c c c c } 
&  { \text { Trial Balance } } && { \text { Trial Balance } } \
& \text { Debit } & \text { Credit } & \text { Debit } & \text { Credit } \
\hline \text { Supplies } & 325 & & 175 & \
\text { Prepaid Insurance } & 800 & & 500 & \
\text { Equipment } & 8,000 & & 8,000 & \
\text { Accum. Dep. } & & 700 & & 1,200 \
\text { Service Fees } & & 1,200 & & 1,200 \
\text { Depreciation Exp. } & & & 500 & \
\text { Telephone Exp. } & 100 & & 100 & \
\text { Salaries Exp. } & 375 & & 375 & \
\text { Insurance Expense } & & & 300 &
\end{array}
\end{array}$$

Accepted Answer

The answer of Provide the adjusting entries to account for...

Question 3

The worksheet is a tool used in preparing the financial statements for a business.

Accepted Answer

A) True 
 B)False

Question 4

Sarah's Spices' accrued wages are $1,700. Which of the following is the required adjusting entry?

Accepted Answer

A)  Debit Salaries Expense, $1,700; credit Accrued Salaries, $1,700 
B)  Credit Salaries Expense, $1,700; debit Accrued Salaries, $1,700 
C)  Debit Cash, $1,700; credit Salaries Expense, $1,700 
D)  Debit Accrued Salaries, $1,700; credit Cash, $1,700

Question 5

Adjusting journal entries are prepared from

Accepted Answer

A)  source documents. 
B)  the balance sheet. 
C)  the income statement. 
D)  the adjustments column of the worksheet.

Question 6

The income statement is the only statement affected when an adjustment is made.

Accepted Answer

A) True 
 B)False

Question 7

On the worksheet, the difference between the debits and credits in the income statement columns would be the net income or net loss for the period.

Accepted Answer

A) True 
 B)False

Question 8

Prepaid Rent is considered to be a(n)

Accepted Answer

A)  liability. 
B)  asset. 
C)  contra-asset. 
D)  revenue.

Question 9

If the adjustment for Supplies used during the period was not made,

Accepted Answer

A)  expenses would be too low. 
B)  assets would be too low. 
C)  expenses would be too high. 
D)  revenue would be too high.

Question 10

The entry to record the expiration of part of the prepaid rent will

Accepted Answer

A)  decrease total assets and increase total expenses at the end of the month. 
B)  decrease total assets and decrease total expenses at the end of the month. 
C)  increase total assets and increase total expenses at the end of the month. 
D)  increase total assets and decrease total expenses at the end of the month.

Question 11

The ending figure for capital is

Accepted Answer

A)  extended to the balance sheet columns. 
B)  revealed by the net income. 
C)  indicated in the trial balance. 
D)  not on the worksheet.

Question 12

Mavis Company took inventory and recorded the consumption of supplies. How will this affect the balance sheet?

Accepted Answer

A)  Assets will be decreased. 
B)  Liabilities will be increased. 
C)  Owner's equity will be increased. 
D)  This will have no effect on the period-end balance sheet.

Question 13

List the steps of the Accounting Cycle in their order of completion that we have learned about up to this point in the course.

Accepted Answer

The answer of List the steps of the Accounting Cycle...

Question 14

The balance in the Accumulated Depreciation account remains about the same each period, while Depreciation Expense increases annually.

Accepted Answer

A) True 
 B)False

Question 15

Prepaid Advertising appeared as $2,400 on the trial balance and as $2,200 on the adjusted trial balance. The proper adjusting journal entry to reflect the change must have been

Accepted Answer

A)  Prepaid Advertising 200 Cash 200 
B)  Cash 200 Prepaid Advertising 200 
C)  Advertising Expense 200 Cash 200 
D)  Advertising Expense 200 Prepaid Advertising 200

Question 16

As accumulated depreciation is recorded, the book value

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  is closed out.

Question 17

After the adjustment for depreciation has been made, the original cost of the equipment

Accepted Answer

A)  increases with a credit. 
B)  decreases with a debit. 
C)  remains the same. 
D)  is adjusted to market value.

Question 18

Depreciation expense decreases net income.

Accepted Answer

A) True 
 B)False

Question 19

After posting adjusting entries, the temporary accounts will be set back to zero.

Accepted Answer

A) True 
 B)False

Question 20

The inside columns on the financial statements are used to

Accepted Answer

A)  show debits. 
B)  show credits. 
C)  show subtotals. 
D)  None of these answers are correct.

Exam 4: The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

It's the end of the accounting period and no electric bill has been received (but the expense has been incurred) ; you should record an entry that

The worksheet is a tool used in preparing the financial statements for a business.

Sarah's Spices' accrued wages are $1,700. Which of the following is the required adjusting entry?

Adjusting journal entries are prepared from

The income statement is the only statement affected when an adjustment is made.

On the worksheet, the difference between the debits and credits in the income statement columns would be the net income or net loss for the period.

Prepaid Rent is considered to be a(n)

If the adjustment for Supplies used during the period was not made,

The entry to record the expiration of part of the prepaid rent will

The ending figure for capital is

Mavis Company took inventory and recorded the consumption of supplies. How will this affect the balance sheet?

List the steps of the Accounting Cycle in their order of completion that we have learned about up to this point in the course.

The balance in the Accumulated Depreciation account remains about the same each period, while Depreciation Expense increases annually.

Prepaid Advertising appeared as $2,400 on the trial balance and as $2,200 on the adjusted trial balance. The proper adjusting journal entry to reflect the change must have been

As accumulated depreciation is recorded, the book value

After the adjustment for depreciation has been made, the original cost of the equipment

Depreciation expense decreases net income.

After posting adjusting entries, the temporary accounts will be set back to zero.

The inside columns on the financial statements are used to