Question 1

Which of the following pairs of accounts could not appear in the same adjusting entry?

Accepted Answer

A)   Service Revenue and Unearned Revenue
B)   Interest Income and Interest Expense
C)   Rent Expense and Prepaid Rent
D)   Salaries Payable and Salaries ExpenseE) C) and D)
F) A) and C)

Question 2

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) All of the above
F) A) and C)

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) A) and B)
F) A) and C)

Question 4

Deferred revenue is revenue that is

Accepted Answer

A)   earned and the cash has been received
B)   earned but the cash has not been received
C)   not earned and the cash has not been received
D)   not earned but the cash has been receivedE) A) and B)
F) A) and C)

Question 5

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

Accepted Answer

A)   preparing the adjusted trial balance
B)   posting
C)   preparing the financial statements
D)   journalizingE) B) and D)
F) B) and C)

Question 6

Accumulated Depreciation and Depreciation Expense are classified, respectively, as

Accepted Answer

A)   expense, contra asset
B)   asset, contra liability
C)   revenue, asset
D)   contra asset, expenseE) A) and C)
F) A) and B)

Question 7

Depreciation on equipment for the year is $6,300.
a) Record the journal entry if the company prepares adjustments once a year.
b) Record the journal entry if the company prepares adjustments on a monthly basis.

Accepted Answer

a)Depreciation Expense
Accumul...

Question 8

Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as an)

Accepted Answer

A)   asset
B)   liability
C)   contra asset
D)   stockholders' equityE) B) and C)
F) A) and B)

Question 9

A contra asset account for Land will normally appear on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

Accepted Answer

A) True 
 B)False

Question 11

On December 31, a business estimates depreciation on equipment used during the first year of operations to be $2,900. a) Journalize the adjusting entry required on December 31. 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 December 31?

Accepted Answer

a)Depreciation Expense
2,900
Accumulated...

Question 12

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 Stockholders' Equity; credit Supplies
C)   debit Accounts Payable; credit Supplies
D)   debit Supplies; credit Stockholders' EquityE) A) and B)
F) A) and C)

Question 13

The matching concept

Accepted Answer

A)   addresses the relationship between the journal and the balance sheet
B)   determines whether the normal balance of an account is a debit or credit
C)   requires that the dollar amount of debits equal the dollar amount of credits on a trial balance
D)   states that the revenues and related expenses should be reported in the same periodE) B) and D)
F) A) and D)

Question 14

The type of account and normal balance of Prepaid Insurance is

Accepted Answer

A)   asset, credit
B)   asset, debit
C)   contra asset, credit
D)   contra asset, debitE) All of the above
F) A) and D)

Question 15

An adjusting entry would adjust an expense account so the expense is reported when incurred.

Accepted Answer

A) True 
 B)False

Question 16

Two income statements for Danielle's Design Services are shown below:
Danielle's Design Services
Income Statements
For Years 1 and 2 Ending December 31  a) Prepare a vertical analysis of Danielle's Design Services income statements.
b) What types of trends are indicated: favorable or unfavorable?
c) What other information would enhance the analysis?

Accepted Answer

a)

b) The vertical analysis shows bot...

Question 17

Match the type of account a-e)  with the business transactions that follow.
-Electric bill to be paid next month.

Accepted Answer

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

Question 18

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry.   Wages Expense 4,500 Wages Payable 4,500????????????????\begin{array} { | c | c | c | } \hline 	ext { Wages Expense } & 4,500 & \\hline 	ext { Wages Payable } & & 4,500 \\hline ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? & & \\hline\end{array} Wages Expense  Wages Payable ????????????????​4,500​4,500​​

Accepted Answer

A)   Record payment of wages.
B)   Record wages paid last month.
C)   Record wages paid in advance.
D)   Record wages expense incurred and to be paid next month. E) A) and B)
F) A) and C)

Question 19

A company pays an employee $3,000 for a five day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

Accepted Answer

A) True 
 B)False

Question 20

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Accepted Answer

A) True 
 B)False

Exam 3: The Adjusting Process

A contra asset account for Land will normally appear on the balance sheet.

Correct Answer
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The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

Correct Answer
verified

Match the type of account a-e) with the business transactions that follow. -Electric bill to be paid next month.

Correct Answer
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The type of account and normal balance of Prepaid Insurance is

Correct Answer
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Which of the following pairs of accounts could not appear in the same adjusting entry?

Correct Answer
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Correct Answer
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a)
b) The vertical analysis shows bot...
View Answer

Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as an)

Correct Answer
verified

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

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

Correct Answer
verified

Depreciation on equipment for the year is $6,300. a) Record the journal entry if the company prepares adjustments once a year. b) Record the journal entry if the company prepares adjustments on a monthly basis.

Correct Answer
verified
a)Depreciation Expense
Accumul...
View Answer

Correct Answer
verified
a)Depreciation Expense
2,900
Accumulated...
View Answer

Deferred revenue is revenue that is

Correct Answer
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Accumulated Depreciation and Depreciation Expense are classified, respectively, as

Correct Answer
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The matching concept

Correct Answer
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Which of the accounting steps in the accounting process below would be completed last?

Correct Answer
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Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

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

Correct Answer
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A company pays an employee $3,000 for a five day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

Correct Answer
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Correct Answer
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An adjusting entry would adjust an expense account so the expense is reported when incurred.

Correct Answer
verified

Exam 3: The Adjusting Process

A contra asset account for Land will normally appear on the balance sheet.

Correct AnswerverifiedShow Answer

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

Correct AnswerverifiedShow Answer

Match the type of account a-e) with the business transactions that follow. -Electric bill to be paid next month.

Correct AnswerverifiedShow Answer

The type of account and normal balance of Prepaid Insurance is

Correct AnswerverifiedShow Answer

Which of the following pairs of accounts could not appear in the same adjusting entry?

Correct AnswerverifiedShow Answer

Correct Answerverifieda) ​b) The vertical analysis shows bot...View AnswerShow Answer

Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as an)

Correct AnswerverifiedShow 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

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

Correct AnswerverifiedShow Answer

Depreciation on equipment for the year is $6,300. a) Record the journal entry if the company prepares adjustments once a year. b) Record the journal entry if the company prepares adjustments on a monthly basis.

Correct Answerverifieda)Depreciation ExpenseAccumul...View AnswerShow Answer

Correct Answerverifieda)Depreciation Expense2,900Accumulated...View AnswerShow Answer

Deferred revenue is revenue that is

Correct AnswerverifiedShow Answer

Accumulated Depreciation and Depreciation Expense are classified, respectively, as

Correct AnswerverifiedShow Answer

The matching concept

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A company pays an employee $3,000 for a five day work week, Monday-Friday. The adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages Payable, $1,800.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An adjusting entry would adjust an expense account so the expense is reported when incurred.

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a)
b) The vertical analysis shows bot...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a)Depreciation Expense
Accumul...
View Answer

Correct Answer
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a)Depreciation Expense
2,900
Accumulated...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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