Question 1

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Accepted Answer

A)   Fees Earned
B)   Accounts Receivable
C)   Unearned Fees
D)   Depreciation ExpenseE) A) and B)
F) All of the above

Question 2

For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is an example of an accrued expense?

Accepted Answer

A)   salary owed but not yet paid
B)   fees received but not yet earned
C)   supplies on hand
D)   a two-year premium paid on a fire insurance policyE) B) and C)
F) B) and D)

Question 4

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, $4,750E) A) and B)
F) A) and C)

Question 5

Match the type of account (a through e)  with the business transactions that follow.
-Services provided that have not been recorded.

Accepted Answer

A)  Prepaid expense
B)  Accrued expense
C)  Unearned revenue
D)  Accrued revenue
E)  None of these choicesF) A) and B)
G) B) and E)

Question 6

Supplies are recorded as assets when purchased. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies

Accepted Answer

A)   still on hand
B)   purchased
C)   used
D)   required for the next accounting periodE) A) and C)
F) B) and C)

Question 7

The type of account and normal balance of Prepaid Insurance would be

Accepted Answer

A)   asset, credit
B)   asset, debit
C)   contra asset, credit
D)   contra asset, debitE) A) and C)
F) B) and C)

Question 8

On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.

Accepted Answer

Jan. 1Prepaid Rent10...

Question 9

Prior to the adjusting process, accrued expenses have

Accepted Answer

A)   not yet been incurred, paid, or recorded
B)   been incurred, have not been paid, but have been recorded
C)   been incurred but not paid and not recorded
D)   been paid but have not yet been incurredE) A) and C)
F) B) and D)

Question 10

An example of deferred revenue is Unearned Rent.

Accepted Answer

A) True 
 B)False

Question 11

Adjusting entries always include

Accepted Answer

A)   only income statement accounts
B)   only balance sheet accounts
C)   the cash account
D)   at least one income statement account and one balance sheet accountE) A) and B)
F) A) and C)

Question 12

Which of the following accounting steps in the accounting process would be completed last?

Accepted Answer

A)   preparing the adjusted trial balance
B)   posting
C)   preparing the financial statements
D)   journalizingE) None of the above
F) B) and C)

Question 13

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

Accepted Answer

A) True 
 B)False

Question 14

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 accountingE) B) and C)
F) A) and D)

Question 15

A business pays biweekly salaries of $20,000 every other Friday for a 10-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a

Accepted Answer

A)   debit to Salary Expense of $8,000
B)   debit to Salaries Payable of $8,000
C)   credit to Salary Expense of $16,000
D)   credit to Salaries Payable of $16,000E) All of the above
F) A) and B)

Question 16

At January 31, the end of the first month of the year, the usual adjusting entry transferring expired insurance to an expense account is omitted. Which items will be incorrectly stated, because of the error, on 
(a) the income statement for January and 
(b) the balance sheet as of January 31? Also indicate whether the items in error will be overstated or understated.

Accepted Answer

(a)Insurance expense
(or expe...

Question 17

The adjusting entry to record the depreciation of a building for the fiscal period is

Accepted Answer

A)   debit Depreciation Expense; credit Building
B)   debit Depreciation Expense; credit Accumulated Depreciation
C)   debit Accumulated Depreciation; credit Depreciation Expense
D)   debit Building; credit Depreciation ExpenseE) A) and D)
F) C) and D)

Question 18

Prepare the required entries for the following transactions:
(a)Austin Company pays daily wages of $645 
(Monday-Friday). Paydays are every other Friday. Prepare the Monday, January 31 adjusting entry, assuming that the previous payday was Friday, January 21.
(b)Prepare the journal entry to record Austin Company's payroll on Friday, February 4.
(c)Annual depreciation expense on the company's fixed assets is $39,600. Prepare the adjusting entry to recognize depreciation for the month of January.
(d)The company's office supplies account shows a debit balance of $3,755. A count of office supplies on hand on January 31 shows $635 worth of supplies on hand. Prepare the January 31 adjusting entry for Office Supplies.

Accepted Answer

The answer of Prepare the required entries for the following...

Question 19

The entry to adjust for the cost of supplies used during the accounting period is

Accepted Answer

A)   debit Supplies Expense; credit Supplies
B)   debit Owner's Equity; credit Supplies
C)   debit Accounts Payable; credit Supplies
D)   debit Supplies; credit Owner's EquityE) None of the above
F) A) and B)

Question 20

Match the type of account (a through e)  with the business transactions that follow.
-Annual property taxes that are paid at the end of the year.

Accepted Answer

A)  Prepaid expense
B)  Accrued expense
C)  Unearned revenue
D)  Accrued revenue
E)  None of these choicesF) C) and E)
G) B) and E)

Exam 3: The Adjusting Process

Correct Answer
verified

For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs.

Correct Answer
verified

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

Correct Answer
verified

A business pays biweekly salaries of $20,000 every other Friday for a 10-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a

Correct Answer
verified

Prior to the adjusting process, accrued expenses have

Correct Answer
verified

The type of account and normal balance of Prepaid Insurance would be

Correct Answer
verified

Which of the following accounting steps in the accounting process would be completed last?

Correct Answer
verified

The adjusting entry to record the depreciation of a building for the fiscal period is

Correct Answer
verified

Which of the following is an example of an accrued expense?

Correct Answer
verified

On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.

Correct Answer
verified
Jan. 1Prepaid Rent10...
View Answer

Adjusting entries always include

Correct Answer
verified

An example of deferred revenue is Unearned Rent.

Correct Answer
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Supplies are recorded as assets when purchased. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies

Correct Answer
verified

Match the type of account (a through e) with the business transactions that follow. -Annual property taxes that are paid at the end of the year.

Correct Answer
verified

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

Correct Answer
verified

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Correct Answer
verified

Correct Answer
verified
(a)Insurance expense
(or expe...
View Answer

Match the type of account (a through e) with the business transactions that follow. -Services provided that have not been recorded.

Correct Answer
verified

The revenue recognition principle

Correct Answer
verified

The entry to adjust for the cost of supplies used during the accounting period is

Correct Answer
verified

Exam 3: The Adjusting Process

Correct AnswerverifiedShow Answer

For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A business pays biweekly salaries of $20,000 every other Friday for a 10-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a

Correct AnswerverifiedShow Answer

Prior to the adjusting process, accrued expenses have

Correct AnswerverifiedShow Answer

The type of account and normal balance of Prepaid Insurance would be

Correct AnswerverifiedShow Answer

Which of the following accounting steps in the accounting process would be completed last?

Correct AnswerverifiedShow Answer

The adjusting entry to record the depreciation of a building for the fiscal period is

Correct AnswerverifiedShow Answer

Which of the following is an example of an accrued expense?

Correct AnswerverifiedShow Answer

On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.

Correct AnswerverifiedJan. 1Prepaid Rent10...View AnswerShow Answer

Adjusting entries always include

Correct AnswerverifiedShow Answer

An example of deferred revenue is Unearned Rent.

Correct AnswerverifiedShow Answer

Supplies are recorded as assets when purchased. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies

Correct AnswerverifiedShow Answer

Match the type of account (a through e) with the business transactions that follow. -Annual property taxes that are paid at the end of the year.

Correct AnswerverifiedShow Answer

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

Correct AnswerverifiedShow Answer

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Correct AnswerverifiedShow Answer

Correct Answerverified(a)Insurance expense (or expe...View AnswerShow Answer

Match the type of account (a through e) with the business transactions that follow. -Services provided that have not been recorded.

Correct AnswerverifiedShow Answer

The revenue recognition principle

Correct AnswerverifiedShow Answer

The entry to adjust for the cost of supplies used during the accounting period is

Correct AnswerverifiedShow Answer

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Jan. 1Prepaid Rent10...
View Answer

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(a)Insurance expense
(or expe...
View Answer

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Correct Answer
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