Question 1

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

Accepted Answer

A)  stockholders' equity 
B)  asset 
C)  contra asset 
D)  liability

Question 2

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

Accepted Answer

A) True 
 B)False

Question 3

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.

Accepted Answer

The answer of Salaries of $6,400 are paid for a...

Question 4

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following is true?

Accepted Answer

A)  total assets will be understated at the end of the current year 
B)  the balance sheet and income statement will be misstated but the statement of stockholders' equity will be correct for the current year 
C)  net income will be overstated for the current year 
D)  total liabilities and total assets will be understated

Question 5

Using the following account balances for Garry's Tree Service, prepare a trial balance.
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Accepted Answer

The answer of Using the following account balances for Garry's...

Question 6

Accumulated depreciation accounts are liability accounts.

Accepted Answer

A) True 
 B)False

Question 7

For the year ending June 30, Island Clinical Services mistakenly omitted adjusting entries for (1) $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. What is the combined effect of these errors on (a) revenues, (b) expenses, and (c) net income for the year ending June 30?

Accepted Answer

The answer of For the year ending June 30, Island...

Question 8

Generally accepted accounting principles require that companies use the ____ of accounting.

Accepted Answer

A)  cash basis 
B)  deferral basis 
C)  accrual basis 
D)  account basis

Question 9

Match between columns
                        Premises: fees earned but not yet received
property tax owed to be paid beginning of next year
fees received but not yet earned
paid premium on a one-year insurance policy

Accepted Answer

The Answer of unearned revenue and accrued expense and accrued is...

Question 10

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

Accepted Answer

A)  $56,700 
B)  $58,000 
C)  $55,800 
D)  $54,500

Question 11

On December 31, the balance in the office supplies account is $1,385. A physical count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Accepted Answer

The answer of On December 31, the balance in the...

Question 12

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry.
1. Cash
2. Prepaid Expenses
3. Depreciation Expense
4. Accounts Payable
5. Accumulated Depreciation
6. Equipment

Accepted Answer

The answer of Indicate with a Yes or No whether...

Question 13

The account type and normal balance of Unearned Revenue is

Accepted Answer

A)  revenue, credit 
B)  expense, debit 
C)  liability, credit 
D)  asset, debit

Question 14

On March 1, a business paid $3,600 for a twelve-month liability insurance policy. On April 1, the business entered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts:
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(a) insurance expense for the month of March
(b) balance in prepaid insurance as of March 31
(c) equipment rent expense for the month of April
(d) balance in prepaid equipment rental as of April 30

Accepted Answer

The answer of On March 1, a business paid $3,600...

Question 15

The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable. This error will be detected when the adjusted trial balance is prepared.

Accepted Answer

A) True 
 B)False

Question 16

The system of accounting where revenues are recorded when services have been performed or products have been delivered to customers and expenses are recorded when they are incurred is called the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 17

The revenue recognition principle

Accepted Answer

A)  is not in conflict with the cash method of accounting 
B)  determines when revenue is credited to a revenue account 
C)  states that revenue is not recorded until the cash is received 
D)  controls all revenue reporting for the cash basis of accounting

Question 18

Record journal entries for the following transactions.
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​(a) On December 1, $18,000 was received for a service contract to be performed from December 1 through April 30.
​(b) Assuming the work is performed evenly throughout the contract period, prepare the adjusting journal entry on December 31.

Accepted Answer

The answer of Record journal entries for the following transactions.
​
​(a)...

Question 19

The adjusting entry for gym memberships earned that were previously recorded in the unearned gym memberships account is

Accepted Answer

A)  debit Unearned Gym Memberships; credit Gym Memberships Revenue 
B)  debit Gym Memberships Revenue; credit Unearned Gym Memberships 
C)  debit Unearned Gym Memberships; credit Prepaid Gym Memberships 
D)  debit Gym Memberships Expense; credit Unearned Gym Memberships

Question 20

The unadjusted and adjusted trial balances for Ellen's Coiffures is shown below. Assume that all balances in the unadjusted trial balance column and the amounts of the adjustments are correct. Further assume that $400 of insurance expired during the year. Locate the errors in the accountant's adjusting entries, assuming that none of the accounts was affected by more than one adjusting entry.
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Accepted Answer

The answer of The unadjusted and adjusted trial balances for...

Exam 3: Adjustments: Accruals and Deferrals

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following is true?

Using the following account balances for Garry's Tree Service, prepare a trial balance.

Accumulated depreciation accounts are liability accounts.

Generally accepted accounting principles require that companies use the ____ of accounting.

Classify the following items as:

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

On December 31, the balance in the office supplies account is $1,385. A physical count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry. 1. Cash 2. Prepaid Expenses 3. Depreciation Expense 4. Accounts Payable 5. Accumulated Depreciation 6. Equipment

The account type and normal balance of Unearned Revenue is

The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable. This error will be detected when the adjusted trial balance is prepared.

The system of accounting where revenues are recorded when services have been performed or products have been delivered to customers and expenses are recorded when they are incurred is called the cash basis of accounting.

The revenue recognition principle

Record journal entries for the following transactions. (a) On December 1, $18,000 was received for a service contract to be performed from December 1 through April 30. (b) Assuming the work is performed evenly throughout the contract period, prepare the adjusting journal entry on December 31.

The adjusting entry for gym memberships earned that were previously recorded in the unearned gym memberships account is

Exam 3: Adjustments: Accruals and Deferrals

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following is true?

Using the following account balances for Garry's Tree Service, prepare a trial balance. ​

Accumulated depreciation accounts are liability accounts.

Generally accepted accounting principles require that companies use the ____ of accounting.

Classify the following items as:

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

On December 31, the balance in the office supplies account is $1,385. A physical count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry. 1. Cash 2. Prepaid Expenses 3. Depreciation Expense 4. Accounts Payable 5. Accumulated Depreciation 6. Equipment

The account type and normal balance of Unearned Revenue is

The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable. This error will be detected when the adjusted trial balance is prepared.

The system of accounting where revenues are recorded when services have been performed or products have been delivered to customers and expenses are recorded when they are incurred is called the cash basis of accounting.

The revenue recognition principle

The adjusting entry for gym memberships earned that were previously recorded in the unearned gym memberships account is

Using the following account balances for Garry's Tree Service, prepare a trial balance.