Question 1

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

Accepted Answer

A)   Adjust supplies inventory to actual.
B)   Record purchase of supplies.
C)   Reduce supplies expense.
D)   Record sale of supplies.E) A) and B)
F) B) and C)

Question 2

The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

Accepted Answer

A)   debit Rent Expense, $8,000; credit Prepaid Rent, $8,000
B)   debit Prepaid Rent, $24,000; credit Rent Expense, $8,000
C)   debit Rent Expense, $24,000; credit Prepaid Rent, $8,000
D)   debit Prepaid Rent, $8,000; credit Rent Expense, $8,000E) A) and B)
F) A) and C)

Question 3

On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts:
(a) insurance expense for the month of March
(b) prepaid insurance as of March 31
(c) equipment rent expense for the month of April
(d) prepaid equipment rental as of April 30

Accepted Answer

The answer of On March 1, a business paid $3,600...

Question 4

Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

Accepted Answer

The adjustment for accrued fees of $1,17...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Prior to the adjusting process, accrued revenue has

Accepted Answer

A)   been earned and cash received
B)   been earned and not recorded as revenue
C)   not been earned but recorded as revenue
D)   not been recorded as revenue but cash has been receivedE) A) and B)
F) A) and C)

Question 7

A one-year insurance policy was purchased on June 1, 2011 for $1,500. The adjusting entry on December 31, 2011 would be

Accepted Answer

$1,500/12 ...

Question 8

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Accepted Answer

A) True 
 B)False

Question 9

A company pays $6,500 for two season tickets on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is debit Cash, $2,500 and credit Ticket Revenue, $2,500.

Accepted Answer

A) True 
 B)False

Question 10

At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. Which of the following statements is true?

Accepted Answer

A)   Total assets at the end of the year will be understated.
B)   Stockholders' equity at the end of the year will be understated.
C)   Net income for the year will be overstated.
D)   Insurance Expense will be overstated.E) C) and D)
F) All of the above

Question 11

The type of account and normal balance of Accumulated Depreciation is

Accepted Answer

A)   asset, credit
B)   asset, debit
C)   contra asset, credit
D)   contra asset, debitE) None of the above
F) A) and B)

Question 12

When is the adjusted trial balance prepared?

Accepted Answer

A)   before adjusting journal entries are posted
B)   after adjusting journal entries are posted
C)   after the adjusting journal entries are journalized
D)   before the adjusting journal entries are journalizedE) B) and D)
F) B) and C)

Question 13

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

Accepted Answer

A)   Total assets will be understated at the end of the current year.
B)   The balance sheet and income statement will be misstated, but the retained earnings statement will be correct for the current year.
C)   Net income will be overstated for the current year.
D)   Total liabilities and total assets will be understated.E) B) and D)
F) None of the above

Question 14

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

Accepted Answer

The answer of The estimated amount of depreciation on equipment...

Question 15

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Accepted Answer

$22,800/24...

Question 16

Prepare the December 31 adjusting entries for the following transactions. Omit explanations.
1. Fees accrued but unbilled total $6,300.
2. The supplies account balance on December 31 is $4,750. Supplies on hand are $960.
3. Wages accrued but not paid are $2,700.
4. Depreciation of office equipment is $1,650.
5. Rent expired during year, $10,800.

Accepted Answer

The answer of Prepare the December 31 adjusting entries for...

Question 17

Which of the following is not a characteristic of accrual basis of accounting?

Accepted Answer

A)   Revenues and expenses are reported in the period in which cash is received or paid
B)   Revenues are reported in the income statement in the period in which they are earned
C)   Supports the matching concept
D)   All are correct.E) None of the above
F) All of the above

Question 18

All of the following statements regarding vertical analysis are true except

Accepted Answer

A)   Vertical analysis may be prepared for several periods to analyze changes in relationships over time.
B)   In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets.
C)   In a vertical analysis of an income statement, each item is stated as a percent of total expenses.
D)   Major differences between a company's vertical analysis and industry averages should be investigated.E) None of the above
F) B) and C)

Question 19

Data for an adjusting entry described as "accrued wages, $2,020" would result in

Accepted Answer

A)   a debit to Wages Expense and a credit to Wages Payable
B)   a debit to Wages Payable and a credit to Wages Expense
C)   a debit to Accounts Receivable and a credit Wages Expense
D)   a debit to Dividends and a credit to Wages PayableE) B) and C)
F) A) and D)

Question 20

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

The answer of Salaries of $6,400 are paid for a...

Exam 3: The Adjusting Process

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Correct Answer
verified

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

Correct Answer
verified

Which of the following is not a characteristic of accrual basis of accounting?

Correct Answer
verified

The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 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

A company pays $6,500 for two season tickets on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is debit Cash, $2,500 and credit Ticket Revenue, $2,500.

Correct Answer
verified

Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

Correct Answer
verified
The adjustment for accrued fees of $1,17...
View Answer

Prior to the adjusting process, accrued revenue has

Correct Answer
verified

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

Correct Answer
verified

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

Correct Answer
verified

All of the following statements regarding vertical analysis are true except

Correct Answer
verified

Correct Answer
verified

Data for an adjusting entry described as "accrued wages, $2,020" would result in

Correct Answer
verified

When is the adjusted trial balance prepared?

Correct Answer
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Correct Answer
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A one-year insurance policy was purchased on June 1, 2011 for $1,500. The adjusting entry on December 31, 2011 would be

Correct Answer
verified
$1,500/12 ...
View Answer

At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. Which of the following statements is true?

Correct Answer
verified

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

Correct Answer
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On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Correct Answer
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$22,800/24...
View Answer

The type of account and normal balance of Accumulated Depreciation is

Correct Answer
verified

Exam 3: The Adjusting Process

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Correct AnswerverifiedShow Answer

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of accrual basis of accounting?

Correct AnswerverifiedShow Answer

The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 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 AnswerverifiedShow Answer

A company pays $6,500 for two season tickets on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is debit Cash, $2,500 and credit Ticket Revenue, $2,500.

Correct AnswerverifiedShow Answer

Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

Correct AnswerverifiedThe adjustment for accrued fees of $1,17...View AnswerShow Answer

Prior to the adjusting process, accrued revenue has

Correct AnswerverifiedShow Answer

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All of the following statements regarding vertical analysis are true except

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Data for an adjusting entry described as "accrued wages, $2,020" would result in

Correct AnswerverifiedShow Answer

When is the adjusted trial balance prepared?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A one-year insurance policy was purchased on June 1, 2011 for $1,500. The adjusting entry on December 31, 2011 would be

Correct Answerverified$1,500/12 ...View AnswerShow Answer

At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. Which of the following statements is true?

Correct AnswerverifiedShow Answer

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

Correct AnswerverifiedShow Answer

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Correct Answerverified$22,800/24...View AnswerShow Answer

The type of account and normal balance of Accumulated Depreciation is

Correct AnswerverifiedShow 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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The adjustment for accrued fees of $1,17...
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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$1,500/12 ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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$22,800/24...
View Answer

Correct Answer
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