Question 1

Adjusting entries are

Accepted Answer

A) the same as correcting entries 
B) needed to bring accounts up to date and match revenue and expense 
C) optional under generally accepted accounting principles 
D) rarely needed in large companies

Question 2

Prior to the adjusting process,accrued revenue has

Accepted Answer

A) been earned and cash received 
B) been earned and not recorded as revenue 
C) not been earned but recorded as revenue 
D) not been recorded as revenue but cash has been received

Question 3

If the adjustment for accrued salaries at the end of the period is inadvertently omitted,both liabilities and stockholders' equity will be understated for the period.

Accepted Answer

A) True 
 B)False

Question 4

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Accepted Answer

A) depreciation 
B) deferral 
C) accrual 
D) inventory

Question 5

The updating of accounts is called the adjusting process.

Accepted Answer

A) True 
 B)False

Question 6

Indicate whether the following error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much.

Accepted Answer

The answer of Indicate whether the following error would cause...

Question 7

Accumulated Depreciation is reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 8

Indicate whether the following error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much.

Accepted Answer

The answer of Indicate whether the following error would cause...

Question 9

On January 2, Safe Boating Monthly received a check for $96 from a subscriber for a 12-month subscription. The January issue was mailed on January 15th. Prepare the necessary entries for the month of January.

Accepted Answer

The answer of On January 2, Safe Boating Monthly received...

Question 10

The balance in the supplies account,before adjustment at the end of the year is $6,250.The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

Accepted Answer

A) debit Supplies $1,500,credit Supplies Expense $1,500 
B) debit Supplies Expense $4,750,credit Supplies $4,750 
C) debit Supplies Expense $1,500,credit Supplies $1,500 
D) debit Supplies $4,750,credit Supplies Expense $4,750

Question 11

If there is a balance in the unearned subscriptions account after adjusting entries are made,it represents a(n)

Accepted Answer

A) deferral 
B) accrual 
C) dividend 
D) revenue

Question 12

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

Accepted Answer

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

Question 13

The revenue recognition concept

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 14

Match between columns
                        Premises: Fees received but not yet earned.
Property tax accrual
Fees earned but not yet received.
Accumulated depreciation.

Accepted Answer

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

Question 15

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

Accepted Answer

A) True 
 B)False

Question 16

A one-year insurance policy was purchased on October 1,2011 for $4,200.The adjusting entry on December 31,2011 would be

Accepted Answer

The answer of A one-year insurance policy was purchased on...

Question 17

The Accumulated Depreciation's account balance is the sum of the depreciation expense recorded in past periods.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

Accepted Answer

A) debit Insurance Expense,$3,000;credit Prepaid Insurance,$3,000 
B) debit Insurance Expense,$14,000;credit Prepaid Insurance,$14,000 
C) debit Prepaid Insurance,$11,000;credit Insurance Expense,$11,000 
D) debit Insurance Expense,$11,000;credit Prepaid Insurance,$11,000

Question 19

The account type and normal balance of Prepaid Expense is

Accepted Answer

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

Question 20

On April 30,a business estimates depreciation on equipment used during the first year of operations to be $2,900.(a)Journalize the adjusting entry required as of April 30.(b)If the adjusting entry in (a)were omitted,which items would be erroneously stated on (1)the income statement for the year and (2)the balance sheet as of April 30?

Accepted Answer

The answer of On April 30,a business estimates depreciation on...

Exam 3: The Adjusting Process

Adjusting entries are

Prior to the adjusting process,accrued revenue has

If the adjustment for accrued salaries at the end of the period is inadvertently omitted,both liabilities and stockholders' equity will be understated for the period.

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

The updating of accounts is called the adjusting process.

Indicate whether the following error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much.

Accumulated Depreciation is reported on the income statement.

Indicate whether the following error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much.

On January 2, Safe Boating Monthly received a check for $96 from a subscriber for a 12-month subscription. The January issue was mailed on January 15th. Prepare the necessary entries for the month of January.

The balance in the supplies account,before adjustment at the end of the year is $6,250.The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

If there is a balance in the unearned subscriptions account after adjusting entries are made,it represents a(n)

The revenue recognition concept

Classify the following items as:

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

A one-year insurance policy was purchased on October 1,2011 for $4,200.The adjusting entry on December 31,2011 would be

The Accumulated Depreciation's account balance is the sum of the depreciation expense recorded in past periods.

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

The account type and normal balance of Prepaid Expense is