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Exam 3: Adjusting Accounts for Financial Statements

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Question 71

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Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

A) True
B) False

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Question 72

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The following information is available for Cubic Company before closing the accounts.After all closing entries are made,what will be the balance in the Retained earnings account?

A) $115,000.
B) $225,000.
C) $264,000.
D) $186,000.
E) $956,000.

F) A) and B)
G) All of the above

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Question 73

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Closing entries are designed to transfer the end-of-period balances in the revenue accounts,the expense accounts,and the dividends account to retained earnings.

High Step Shoes,had annual revenues of $185,000,expenses of $103,700,and paid dividends of $18,000 during the current year.The retained earnings account before closing had a balance of $297,000. -The Net Income for the year is:

Profit margin can also be called return on sales.

On October 1,Vista View Company rented warehouse space to a tenant for $2,500 per month.The tenant paid five months' rent in advance on that date,with the lease beginning immediately.The cash receipt was credited to the Unearned Rent account.The company's annual accounting period ends on December 31.The adjusting entry needed on December 31 is:

Based on the unadjusted trial balance for Glow Styling and the adjusting information given below,prepare the adjusting journal entries for Glow Styling.After completing the adjusting entries,prepare the trial balance for Glow Styling. Glow Styling unadjusted trial balance for the current year follows: Additional information: a.An insurance policy examination showed $1,240 of expired insurance. b.An inventory count showed $210 of unused shop supplies still available. c.Depreciation expense on shop equipment,$350. d.Depreciation expense on the building,$2,220. e.A beautician is behind on space rental payments,and this $200 of accrued revenues was unrecorded at the time the trial balance was prepared. f.$800 of the Unearned Rent account balance was earned by year-end. g.The one employee,a receptionist,works a five-day workweek at $50 per day.The employee was paid last week but has worked four days this week for which she has not been paid. h.Three months' property taxes,totaling $450,have accrued.This additional amount of property taxes expense has not been recorded. i.One month's interest on the note payable,$600,has accrued but is unrecorded. Use the above information to prepare the adjusted trial balance for Glow Styling.

The time period assumption assumes that an organization's activities can be divided into specific time periods such as months,quarters,or years.

An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200.Assuming the company does not prepare reversing entries,which of the following entries would be prepared to record the $3,000 payment of salaries in January of the following year?

________ revenues are liabilities requiring delivery of products and for services.

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

On January 1,a company purchased a five-year insurance policy for $1,800 with coverage starting immediately.If the purchase was recorded in the Prepaid Insurance account,and the company records adjustments only at year-end,the adjusting entry at the end of the first year is:

A company performs 20 days of work on a 30-day contract before the end of the year.The total contract is valued at $6,000,with payment received in advance.The $6,000 cash receipt was initially recorded as Unearned Revenue.The required adjusting entry includes a $4,000 debit to Unearned Revenue.

If a company has current assets of $15,000 and current liabilities of $9,500,its current ratio is 1.6

If a prepaid expense account were not adjusted for the amount used,on the balance sheet assets would be ________ and equity would be ________.

Statements that show the financial statements as if proposed transactions had already occurred are called:

The length of time covered by a set of periodic financial statements,primarily a year for most companies,is referred to as the:

On October 1,Vista View Goodwell Company rented warehouse space to a tenant for $2,500 per month and received $12,500 for five months' rent in advance on that date,with the lease beginning immediately.The cash receipt was credited to the Unearned Rent account.The company's annual accounting period ends on December 31.The Unearned Rent account balance at the end of December,after adjustment,should be:

Which of the following statements is true?

Failure to record depreciation expense will overstate assets and understate expenses.