Question 1

The matching principle supports matching expenses with the related revenues.

Accepted Answer

A) True 
 B)False

Question 2

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

Salaries Expense [($...

Question 3

A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is an example of a prepaid expense?

Accepted Answer

A)  Supplies
B)  Accounts Receivable
C)  Unearned Subscriptions
D)  Unearned FeesE) A) and B)
F) All of the above

Question 5

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 B)
F) None of the above

Question 6

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 7

On December 15, Great Designs Company hired an independent contractor for a project. The contractor completed the project on December 29 and submitted an invoice for $2,425 which was due on January 15. The amount was duly paid on January 15.​
(a) Prepare the journal entry or entries necessary to record these transactions.(b) Explain why you prepared this/these journal entries.

Accepted Answer

The answer of On December 15, Great Designs Company hired...

Question 8

Which of the following is an example of accrued revenue?

Accepted Answer

A)  snow removal services that have been paid for three months in advance
B)  snow removal services that have been provided but have not been billed or paid
C)  an agreement that has been signed for snow removal services for the next three months
D)  snow removal services that have been provided and paid on the same dayE) A) and D)
F) A) and C)

Question 9

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Accepted Answer

A)  $2,100
B)  $700
C)  $2,800
D)  $1,400E) A) and B)
F) None of the above

Question 10

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Accepted Answer

A) True 
 B)False

Question 11

Using accrual accounting, revenues are recorded

Accepted Answer

A)  when cash is received without regard to when the services are performed or products have been delivered to customers
B)  when a service has been performed or products have been delivered to customers without regard to when cash is received
C)  when cash is received at the time services are performed or products have been delivered to customers
D)  only if cash is received after the services are performed or products have been delivered to customersE) B) and D)
F) A) and C)

Question 12

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) None of the above
F) A) and B)

Question 13

Match the type of account (a - e) with the business transactions that follow.
-A contract to provide tutoring services beginning next month was signed.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 14

The account type and normal balance of Unearned Revenue is

Accepted Answer

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

Question 15

Using accrual accounting, expenses are recorded and reported only

Accepted Answer

A)  when they are incurred, whether or not cash is paid
B)  when they are incurred and paid at the same time
C)  if they are paid before they are incurred
D)  if they are paid after they are incurredE) All of the above
F) A) and D)

Question 16

What effect will this adjustment have on the accounting records?

Accepted Answer

A)  increase net income
B)  increase revenues reported for the period
C)  decrease liabilities
D)  all of these are trueE) A) and C)
F) None of the above

Question 17

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

Accepted Answer

Jan. 1
Prepaid Rent
...

Question 18

Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

Accepted Answer

A)  debit Salaries Payable, $12,000; credit Cash, $12,000
B)  debit Salary Expense, $12,000; credit Dividends, $12,000
C)  debit Salary Expense, $12,000; credit Salaries Payable, $12,000
D)  debit Dividends, $12,000; credit Cash, $12,000E) A) and B)
F) A) and C)

Question 19

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Accepted Answer

The purpose of an adjusted trial balance...

Question 20

A fixed asset's market value is reflected on the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 3: The Adjusting Process

Which of the following is an example of a prepaid expense?

Correct Answer
verified

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Correct Answer
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The purpose of an adjusted trial balance...
View Answer

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 - e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

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

Using accrual accounting, expenses are recorded and reported only

Correct Answer
verified

Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

Correct Answer
verified

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.

Correct Answer
verified
Salaries Expense [($...
View Answer

A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Correct Answer
verified

The account type and normal balance of Unearned Revenue is

Correct Answer
verified

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Correct Answer
verified

What effect will this adjustment have on the accounting records?

Correct Answer
verified

A fixed asset's market value is reflected on the balance sheet.

Correct Answer
verified

The matching principle supports matching expenses with the related revenues.

Correct Answer
verified

Which of the following is an example of accrued revenue?

Correct Answer
verified

Correct Answer
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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. 1
Prepaid Rent
...
View Answer

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Correct Answer
verified

Using accrual accounting, revenues are recorded

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

Exam 3: The Adjusting Process

Which of the following is an example of a prepaid expense?

Correct AnswerverifiedShow Answer

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Correct AnswerverifiedThe purpose of an adjusted trial balance...View AnswerShow 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 - e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

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

Using accrual accounting, expenses are recorded and reported only

Correct AnswerverifiedShow Answer

Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedSalaries Expense [($...View AnswerShow Answer

A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Correct AnswerverifiedShow Answer

The account type and normal balance of Unearned Revenue is

Correct AnswerverifiedShow Answer

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Correct AnswerverifiedShow Answer

What effect will this adjustment have on the accounting records?

Correct AnswerverifiedShow Answer

A fixed asset's market value is reflected on the balance sheet.

Correct AnswerverifiedShow Answer

The matching principle supports matching expenses with the related revenues.

Correct AnswerverifiedShow Answer

Which of the following is an example of accrued revenue?

Correct AnswerverifiedShow Answer

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 Rent...View AnswerShow Answer

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Correct AnswerverifiedShow Answer

Using accrual accounting, revenues are recorded

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

Correct Answer
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Correct Answer
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The purpose of an adjusted trial balance...
View Answer

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Correct Answer
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Correct Answer
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Salaries Expense [($...
View Answer

Correct Answer
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Jan. 1
Prepaid Rent
...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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