Question 1

Which of the following statements about the adjusted and post-closing trial balances is correct?

Accepted Answer

A)  The adjusted trial balance is prepared after the financial statements to verify that the numbers are accurate.
B)  The primary purpose of the post-closing trial balance is to see whether revenues are greater than expenses.
C)  The post-closing trial balance is a check that the accounting records are still in balance after posting all closing entries to the accounts.
D)  The post-closing trial balance debit column total is the amount to be shown as Total Assets on the Balance Sheet.E) A) and B)
F) C) and D)

Question 2

Which of the following statements about an adjusted trial balance is correct?

Accepted Answer

A)  Debits should equal credits both before and after adjustments are made.
B)  Debits will equal credits after adjustments are made but not necessarily before.
C)  Debits will equal credits before adjustments are made but not necessarily after.
D)  Debits do not have to equal credits in the adjusted trial balance but they must be equal in the post-closing trial balance.E) All of the above
F) A) and C)

Question 3

The adjusting entry to record the supplies used during the period will result in a(n) :

Accepted Answer

A)  increase to Supplies and a decrease to Supplies Expense.
B)  increase to Supplies and an increase to Supplies Expense.
C)  decrease to Supplies and an increase to Supplies Expense.
D)  decrease to Supplies and a decrease to Supplies Expense.E) A) and B)
F) All of the above

Question 4

Adjustments help to ensure that all ________ are recorded in the period in which they are earned.

Accepted Answer

A)  revenues
B)  cash transactions
C)  closing entries
D)  journal entriesE) B) and C)
F) B) and D)

Question 5

When a company pays its rent in advance,an asset is reported on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

Depreciation is a measure of the decline in market value of an asset.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following accounts will have a zero balance on a post-closing trial balance?

Accepted Answer

A)  Accumulated Depreciation.
B)  Dividends.
C)  Deferred Revenue.
D)  Cash.E) All of the above
F) B) and C)

Question 8

Bantam company calculated its net income to be $38,775 based on the unadjusted trial balance.The following adjusting entries were then made for:
Salaries and wages owed but not yet paid of $395.
Interest earned but not received from investments of $375.
Prepaid insurance premiums amounting to $275 have expired.
Deferred revenue in the amount of $375 has now been earned.
Required:
Determine the amount of net income (loss)that will be reported after the adjustments are recorded.

Accepted Answer

Unadjusted net income − Increase in sala...

Question 9

The book value of equipment is equal to which of the following?

Accepted Answer

A)  Cost of equipment plus the related accumulated depreciation.
B)  Accumulated depreciation less the related depreciation expense.
C)  Cost of equipment less the related accumulated depreciation.
D)  Accumulated depreciation plus the related depreciation expense.E) None of the above
F) A) and D)

Question 10

Boatsman Enterprises has a $72,500 note payable at December 31.Interest in the amount of $3,625 has accrued but has not yet been paid.Both the note payable and the accrued interest will become due next year.How will the interest affect the adjustments at the end of the period?

Accepted Answer

A)  Interest Expense does not affect this period since it will not be paid.The expense will be recorded when the note and interest are paid in full.
B)  Interest Expense should be increased,because the cost of interest relates to the current period.
C)  Note Payable should be increased to reflect the additional interest that will be due when the note is paid off next year.
D)  Interest Receivable should be increased to reflect the accrued interest on the note payable.E) A) and B)
F) None of the above

Question 11

After the adjustments have been completed,the balance in the Rent Expense account represents the:

Accepted Answer

A)  amount of rent owed at the end of the accounting period.
B)  amount of the future benefit remaining in the account.
C)  cost of rent for the accounting period.
D)  amount of cash paid this period for rent relating to any current or future period.E) A) and B)
F) B) and D)

Question 12

Accumulated Depreciation appears on the:

Accepted Answer

A)  balance sheet in the stockholders' equity section.
B)  income statement as an expense.
C)  balance sheet as a liability account.
D)  balance sheet as a contra-asset account.E) A) and B)
F) A) and C)

Question 13

An adjustment to accrue the amount of salaries and wages owed was recorded on December 31.These salaries and wages were paid on the following January 5.The entry on January 5 would include a debit to:

Accepted Answer

A)  Salaries and Wages Expense and Credit to Cash.
B)  Salaries and Wages Payable and Credit to Cash.
C)  Cash and Credit to Salaries and Wages Payable.
D)  Cash and Credit to Salaries and Wages Expense.E) A) and B)
F) None of the above

Question 14

To calculate the company's income tax expense for the current period,it is necessary to know the company's:

Accepted Answer

A)  operating revenue and tax bill from prior periods.
B)  adjusted income (before income taxes) and the company's tax rate.
C)  operating expenses and revenue.
D)  revenues,expenses,and dividends.E) A) and D)
F) B) and C)

Question 15

First Corporation had Retained Earnings at the end of December 31,2018 of $900,000.During 2019,the company had net income of $340,000 and declared dividends of $40,000.The amount of Retained Earnings reported on the balance sheet as of December 31,2019 will be:

Accepted Answer

A)  $860,000.
B)  $1,200,000.
C)  $1,240,000.
D)  $1,280,000.E) A) and C)
F) B) and C)

Question 16

After the adjustments have been completed,the adjusted balance in the Supplies Expense account represents the cost of supplies:

Accepted Answer

A)  on hand at the end of the accounting period.
B)  purchased during the accounting period.
C)  used during the accounting period.
D)  purchased,but not yet paid for,at the end of the accounting period.E) B) and C)
F) A) and D)

Question 17

In recording an accrual adjustment to account for revenues earned but not yet collected:

Accepted Answer

A)  an asset is decreased since cash is being paid at the time of the adjustment.
B)  the asset recorded when cash was paid is decreased as the revenue is earned.
C)  the asset recorded when cash was paid is increased as the revenue is earned.
D)  an asset is increased since cash will be collected at a later date.E) A) and C)
F) C) and D)

Question 18

The temporary accounts will have zero balances in a post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 19

Temporary accounts are closed at what stage of the accounting process?

Accepted Answer

A)  At the time that adjustments are made.
B)  After adjustments are made and before the income statement is prepared.
C)  After the income statement and the statement of retained earnings are prepared,but before the balance sheet is prepared.
D)  As the last journal entries at the end of each accounting year.E) B) and C)
F) A) and D)

Question 20

Ridge Crest Co.has beginning Retained Earnings of $11,000,ending Retained Earnings of $16,000,and net income of $7,500.What was the amount of dividends declared during the year?

Accepted Answer

A)  $2,500
B)  $3,500
C)  $5,000
D)  $7,500E) A) and C)
F) B) and C)

Exam 4: Adjustments,Financial Statements,and Financial Results

In recording an accrual adjustment to account for revenues earned but not yet collected:

Correct Answer
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Adjustments help to ensure that all ________ are recorded in the period in which they are earned.

Correct Answer
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Accumulated Depreciation appears on the:

Correct Answer
verified

The temporary accounts will have zero balances in a post-closing trial balance.

Correct Answer
verified

After the adjustments have been completed,the adjusted balance in the Supplies Expense account represents the cost of supplies:

Correct Answer
verified

Temporary accounts are closed at what stage of the accounting process?

Correct Answer
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Boatsman Enterprises has a $72,500 note payable at December 31.Interest in the amount of $3,625 has accrued but has not yet been paid.Both the note payable and the accrued interest will become due next year.How will the interest affect the adjustments at the end of the period?

Correct Answer
verified

When a company pays its rent in advance,an asset is reported on the balance sheet.

Correct Answer
verified

The book value of equipment is equal to which of the following?

Correct Answer
verified

Depreciation is a measure of the decline in market value of an asset.

Correct Answer
verified

An adjustment to accrue the amount of salaries and wages owed was recorded on December 31.These salaries and wages were paid on the following January 5.The entry on January 5 would include a debit to:

Correct Answer
verified

Which of the following accounts will have a zero balance on a post-closing trial balance?

Correct Answer
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Which of the following statements about the adjusted and post-closing trial balances is correct?

Correct Answer
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Which of the following statements about an adjusted trial balance is correct?

Correct Answer
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Correct Answer
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Unadjusted net income − Increase in sala...
View Answer

The adjusting entry to record the supplies used during the period will result in a(n) :

Correct Answer
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To calculate the company's income tax expense for the current period,it is necessary to know the company's:

Correct Answer
verified

Ridge Crest Co.has beginning Retained Earnings of $11,000,ending Retained Earnings of $16,000,and net income of $7,500.What was the amount of dividends declared during the year?

Correct Answer
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First Corporation had Retained Earnings at the end of December 31,2018 of $900,000.During 2019,the company had net income of $340,000 and declared dividends of $40,000.The amount of Retained Earnings reported on the balance sheet as of December 31,2019 will be:

Correct Answer
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After the adjustments have been completed,the balance in the Rent Expense account represents the:

Correct Answer
verified

Exam 4: Adjustments,Financial Statements,and Financial Results

In recording an accrual adjustment to account for revenues earned but not yet collected:

Correct AnswerverifiedShow Answer

Adjustments help to ensure that all ________ are recorded in the period in which they are earned.

Correct AnswerverifiedShow Answer

Accumulated Depreciation appears on the:

Correct AnswerverifiedShow Answer

The temporary accounts will have zero balances in a post-closing trial balance.

Correct AnswerverifiedShow Answer

After the adjustments have been completed,the adjusted balance in the Supplies Expense account represents the cost of supplies:

Correct AnswerverifiedShow Answer

Temporary accounts are closed at what stage of the accounting process?

Correct AnswerverifiedShow Answer

Boatsman Enterprises has a $72,500 note payable at December 31.Interest in the amount of $3,625 has accrued but has not yet been paid.Both the note payable and the accrued interest will become due next year.How will the interest affect the adjustments at the end of the period?

Correct AnswerverifiedShow Answer

When a company pays its rent in advance,an asset is reported on the balance sheet.

Correct AnswerverifiedShow Answer

The book value of equipment is equal to which of the following?

Correct AnswerverifiedShow Answer

Depreciation is a measure of the decline in market value of an asset.

Correct AnswerverifiedShow Answer

An adjustment to accrue the amount of salaries and wages owed was recorded on December 31.These salaries and wages were paid on the following January 5.The entry on January 5 would include a debit to:

Correct AnswerverifiedShow Answer

Which of the following accounts will have a zero balance on a post-closing trial balance?

Correct AnswerverifiedShow Answer

Which of the following statements about the adjusted and post-closing trial balances is correct?

Correct AnswerverifiedShow Answer

Which of the following statements about an adjusted trial balance is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedUnadjusted net income − Increase in sala...View AnswerShow Answer

The adjusting entry to record the supplies used during the period will result in a(n) :

Correct AnswerverifiedShow Answer

To calculate the company's income tax expense for the current period,it is necessary to know the company's:

Correct AnswerverifiedShow Answer

Ridge Crest Co.has beginning Retained Earnings of $11,000,ending Retained Earnings of $16,000,and net income of $7,500.What was the amount of dividends declared during the year?

Correct AnswerverifiedShow Answer

First Corporation had Retained Earnings at the end of December 31,2018 of $900,000.During 2019,the company had net income of $340,000 and declared dividends of $40,000.The amount of Retained Earnings reported on the balance sheet as of December 31,2019 will be:

Correct AnswerverifiedShow Answer

After the adjustments have been completed,the balance in the Rent Expense account represents the:

Correct AnswerverifiedShow Answer

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Unadjusted net income − Increase in sala...
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