Question 1

Which of the following accounts would be classified as a current liability?

Accepted Answer

A)  Service revenue.
B)  Wages expense.
C)  Accumulated amortization.
D)  None of the above.E) All of the above
F) B) and D)

Question 2

Financial statements are prepared only after the trial balance has shown that debits equal credits.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 3

When the future benefits of existing assets are used up in the ordinary course of business:

Accepted Answer

A)  an expense is recorded.
B)  a loss is recorded.
C)  a credit to a liability is recorded.
D)  a debit to assets is recorded.E) C) and D)
F) B) and D)

Question 4

The Treasury Bank Corporation had retained earnings at the end of December 31,2007 of $450,000.During 2008,the company had net income of $170,000 and declared dividends of $20,000.Retained earnings on the balance sheet as of December 31,2008 will be:

Accepted Answer

A)  $430,000.
B)  $600,000.
C)  $620,000.
D)  $640,000.E) B) and D)
F) A) and C)

Question 5

Which of these accounts would normally not be affected by an adjustment?

Accepted Answer

A)  Supplies.
B)  Revenues.
C)  Expenses.
D)  Cash.E) A) and D)
F) C) and D)

Question 6

Closing journal entries are only recorded at the end of each accounting year.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is done last at the end of the year?

Accepted Answer

A)  Prepare adjusting journal entries.
B)  Prepare an adjusted trial balance.
C)  Prepare closing journal entries.
D)  Prepare a post-closing trial balance.E) All of the above
F) None of the above

Question 8

All real accounts will have zero balances when the closing process is complete.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 9

When closing journal entries are prepared,retained earnings is credited if a company has a net loss.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 10

Complete the following comparative balance sheet for Red Books,Inc.,if Retained Earnings increased by $1,000,Property,Plant and Equipment decreased by $500,and Accounts Receivable was unchanged during 2008.

Accepted Answer

The answer of Complete the following comparative balance sheet for...

Question 11

Adjustments are needed to ensure that the accounting system records all of the revenues and expenses that relate to that period.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 12

A post-closing trial balance should be prepared before temporary accounts are closed.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 13

Recording an adjusting journal entry to recognize amortization would cause which of the following?

Accepted Answer

A)  An increase in liabilities and expenses,and a decrease in shareholders' equity.
B)  A decrease in assets,and an increase in expenses.
C)  A decrease in assets,an increase in liabilities,and an increase in expenses.
D)  None of the above.E) A) and B)
F) A) and C)

Question 14

One major difference between deferral and accrual adjustments is:

Accepted Answer

A)  deferral adjustments involve previously recorded transactions and accruals involve new transactions.
B)  deferral adjustments are made after taxes and accrual adjustments are made before taxes.
C)  deferral adjustments are made annually and accrual adjustments are made monthly.
D)  deferral adjustments are influenced by estimates of future events and accrual adjustments are not.E) B) and D)
F) None of the above

Question 15

A company pays wages every two weeks.Wages amount to $100 a day.On March 31,the company pays wages for the two weeks ending March 24.At the end of the month,the related adjusting journal entry will include a

Accepted Answer

A)  debit to Retained Earnings for $700 and a credit to Cash for $700.
B)  debit to Wage Expense for $700 and a credit to Wages Payable for $700.
C)  debit to Wages Payable for $700 and a credit to Cash for $700.
D)  debit to Retained Earnings for $700 and a credit to Wages Payable for $700.E) A) and B)
F) None of the above

Question 16

You mistakenly include a contra account of $20,000 in the same column of your trial balance as the account it offsets.All other things equal,your debit and credit column totals will differ by $40,000.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not the value at which an asset is reported on a financial statement?

Accepted Answer

A)  the carrying value.
B)  the book value.
C)  the net book value.
D)  the depreciated Value.E) B) and C)
F) B) and D)

Question 18

An adjusted trial balance should be prepared immediately:

Accepted Answer

A)  after posting normal journal entries.
B)  before analyzing transactions.
C)  after posting adjusting journal entries.
D)  after posting closing journal entries.E) A) and C)
F) A) and B)

Question 19

Purrfect Pets had a beginning balance in its retained earnings account of $385,600.During the year,the company declared and paid a $4,700 dividend,and at the end of the year,it reported retained earnings of $399,860.The company's net income for the year was:

Accepted Answer

A)  $14,260.
B)  $18,960.
C)  $9,560.
D)  none of the above.E) A) and C)
F) B) and D)

Question 20

The carrying value of an asset is an approximation of the asset's market value.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Exam 4: Adjustments,financial Statements,and Financial Results

Which of these accounts would normally not be affected by an adjustment?

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When the future benefits of existing assets are used up in the ordinary course of business:

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Which of the following is done last at the end of the year?

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Recording an adjusting journal entry to recognize amortization would cause which of the following?

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A post-closing trial balance should be prepared before temporary accounts are closed. BT: Comprehension

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An adjusted trial balance should be prepared immediately:

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You mistakenly include a contra account of $20,000 in the same column of your trial balance as the account it offsets.All other things equal,your debit and credit column totals will differ by $40,000. BT: Comprehension

Correct AnswerverifiedShow Answer

When closing journal entries are prepared,retained earnings is credited if a company has a net loss. BT: Comprehension

Correct AnswerverifiedShow Answer

Purrfect Pets had a beginning balance in its retained earnings account of $385,600.During the year,the company declared and paid a $4,700 dividend,and at the end of the year,it reported retained earnings of $399,860.The company's net income for the year was:

Correct AnswerverifiedShow Answer

Complete the following comparative balance sheet for Red Books,Inc.,if Retained Earnings increased by $1,000,Property,Plant and Equipment decreased by $500,and Accounts Receivable was unchanged during 2008.

Correct AnswerverifiedShow Answer

Adjustments are needed to ensure that the accounting system records all of the revenues and expenses that relate to that period. BT: Knowledge

Correct AnswerverifiedShow Answer

A company pays wages every two weeks.Wages amount to $100 a day.On March 31,the company pays wages for the two weeks ending March 24.At the end of the month,the related adjusting journal entry will include a

Correct AnswerverifiedShow Answer

Which of the following accounts would be classified as a current liability?

Correct AnswerverifiedShow Answer

The carrying value of an asset is an approximation of the asset's market value. BT: Knowledge

Correct AnswerverifiedShow Answer

One major difference between deferral and accrual adjustments is:

Correct AnswerverifiedShow Answer

All real accounts will have zero balances when the closing process is complete. BT: Knowledge

Correct AnswerverifiedShow Answer

Which of the following is not the value at which an asset is reported on a financial statement?

Correct AnswerverifiedShow Answer

Financial statements are prepared only after the trial balance has shown that debits equal credits. BT: Knowledge

Correct AnswerverifiedShow Answer

Closing journal entries are only recorded at the end of each accounting year. BT: Knowledge

Correct AnswerverifiedShow Answer

The Treasury Bank Corporation had retained earnings at the end of December 31,2007 of $450,000.During 2008,the company had net income of $170,000 and declared dividends of $20,000.Retained earnings on the balance sheet as of December 31,2008 will be:

Correct AnswerverifiedShow Answer

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