Question 1

The Income Summary account is used:

Accepted Answer

A)  To adjust and update asset and liability accounts.
B)  To close the revenue and expense accounts.
C)  To determine the appropriate dividend amount.
D)  In some situations to replace the income statement.
E)  To replace the retained earnings account in some businesses.F) A) and B)
G) D) and E)

Question 2

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30">_TB6947_00...

Question 3

Failure to record depreciation expense will overstate the asset and understate the expense.

Accepted Answer

A) True 
 B)False  True

Question 4

The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is:

Accepted Answer

A)  Debit Unpaid Salaries and credit Salaries Payable.
B)  Debit Salaries Payable and credit Salaries Expense.
C)  Debit Salaries Expense and credit Cash.
D)  Debit Salaries Expense and credit Salaries Payable.
E)  Debit Cash and credit Salaries Expense.F) C) and E)
G) C) and D)

Question 5

ABC Co.leased a portion of its store to another company for eight months beginning on October 1,2014,at a monthly rate of $800.This other company paid the entire $6,400 cash on October 1,which ABC Co.recorded as unearned revenue.The journal entry made by ABC Co.at year-end on December 31,2014,would include a:

Accepted Answer

A)  Debit to Rent Earned for $2,400.
B)  Credit to Unearned Rent for $2,400.
C)  Debit to Cash for $6,400.
D)  Credit to Rent Earned for $2,400.
E)  Debit to Unearned Rent for $4,000.F) B) and D)
G) A) and B) D

Question 6

Depreciation on the company's equipment for 2014 is $24,000.The company prepares and records adjusting entries on a monthly basis.How would the company record the related adjusting entry on December 31,2014?

Accepted Answer

A)  Debit Depreciation Expense for $2,000 and credit Cash for $2,000.
B)  Debit Depreciation Expense for $2,000 and credit Equipment for $2,000.
C)  Debit Depreciation Expense for $2,000 and credit Accumulated Depreciation - Equipment for $2,000.
D)  Debit Depreciation Expense for $24,000 and credit Accumulated Depreciation - Equipment for $24,000.
E)  Debit Depreciation Expense for $24,000 and credit Equipment for $24,000.F) A) and C)
G) A) and D) C

Question 7

The last four steps in the accounting cycle include preparing the adjusted trial balance,preparing financial statements,and recording closing and adjusting entries.

Accepted Answer

A) True 
 B)False

Question 8

Profit margin equals ___________________ divided by net sales.

Accepted Answer

The answer of Profit margin equals ___________________ divided by net...

Question 9

Adjusting entries:

Accepted Answer

A)  Affect only income statement accounts.
B)  Affect only balance sheet accounts.
C)  Affect both income statement and balance sheet accounts.
D)  Affect only cash flow statement accounts.
E)  Affect only equity accounts.F) C) and E)
G) A) and C)

Question 10

Power Electric has two part-time employees; each employee earns $200 per day.They are normally paid on Fridays for work completed Monday through Friday of the same week.April 25,2014,was a Friday,and they were paid in full on that day.The employees worked on Monday,Tuesday,and Wednesday,April 28 through 30,2014,and the related adjusting entry was recorded on April 30,2014.The company paid the two employees for a full week of work on Friday,May 2,2014.How would the company record this transaction?

Accepted Answer

A)  Debit Salaries Expense for $1,000 and credit Cash for $1,000.
B)  Debit Salaries Expense for $400 and credit Cash for $400.
C)  Debit Salaries Expense for $400 and credit Salaries Payable for $400.
D)  Debit Salaries Expense for $600 and credit Salaries Payable for $600.
E)  Debit Salaries Expense for $400,credit Salaries Payable for $600,and credit Cash for $1,000.F) B) and D)
G) B) and C)

Question 11

On December 31,2012,a company forgot to record $7,000 of depreciation on office equipment.What would be the effect on the assets,net income,and equity when it comes to the 2012 financial statements?

Accepted Answer

1 Assets are overstated by $7,...

Question 12

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following: 
Office supplies used during the period,$1,200.
Expiration of prepaid rent,$700.
Accrued salaries expense,$500.
Depreciation expense,$800.
Accrued service fees receivable,$400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A)  $80,400
B)  $84,000
C)  $85,700
D)  $85,900
E)  $87,600F) A) and D)
G) D) and E)

Question 13

In accrual accounting,accrued revenues are recorded as liabilities.

Accepted Answer

A) True 
 B)False

Question 14

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Accepted Answer

A)   
B)   
C)   
D)   
E)   F) A) and E)
G) C) and D)

Question 15

What is the difference between GAAP and IFRS presentations of the current assets section on the balance sheet?

Accepted Answer

A)  Under IFRS it is mandatory to present current assets first while under GAAP it is customary (but not required)  to present noncurrent assets first.
B)  Both IFRS and GAAP require that current assets are listed first.
C)  Under GAAP it is mandatory to present current assets first,while under IFRS it is customary (but not required)  to present noncurrent assets first.
D)  It is customary (but not required)  under both IFRS and GAAP to present noncurrent assets first.
E)  GAAP requires that current assets be presented first,while IFRS requires that current assets be presented last.F) B) and E)
G) All of the above

Question 16

Kasper Electric has two part-time employees,each of whom earns $200 per day.They are normally paid on Fridays for work completed Monday through Friday of the same week.December 27,2013,was a Friday,and they were paid in full on that day.The employees worked on Monday and Tuesday,December 30 and 31,2013.How would the company record the related adjusting entry on December 31,2013?

Accepted Answer

A)  Debit Salaries Expense for $200 and credit Cash for $200.
B)  Debit Salaries Expense for $400 and credit Cash for $400.
C)  Debit Salaries Expense for $200 and credit Salaries Payable for $200.
D)  Debit Salaries Expense for $400 and credit Salaries Payable for $400.
E)  Debit Salaries Expense for $400,credit Salaries Payable for $200,and credit Cash for $200.F) A) and B)
G) C) and D)

Question 17

Financial statements are typically prepared in the following order:

Accepted Answer

A)  Balance sheet,statement of retained earnings,income statement.
B)  Statement of retained earnings,balance sheet,income statement.
C)  Income statement,balance sheet,statement of retained earnings.
D)  Income statement,statement of retained earnings,balance sheet.
E)  Balance sheet,income statement,statement of retained earnings.F) A) and E)
G) All of the above

Question 18

A company pays each of its two office employees each Friday at the rate of $100 per day each for a five-day week that begins on Monday.If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday,the month-end adjusting entry to record the salaries earned but unpaid is:

Accepted Answer

A)  Debit Unpaid Salaries $600 and credit Salaries Payable $600.
B)  Debit Salaries Expense $400 and credit Salaries Payable $400.
C)  Debit Salaries Expense $600 and credit Salaries Payable $600.
D)  Debit Salaries Payable $400 and credit Salaries Expense $400.
E)  Debit Salaries Expense $400 and credit Cash $400.F) B) and C)
G) B) and E)

Question 19

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Accepted Answer

A) True 
 B)False

Question 20

The current portion of long-term debt is classified with the _________________________.

Accepted Answer

The answer of The current portion of long-term debt is...

Exam 3: Adjusting Accounts for Financial Statements

The Income Summary account is used:

Correct Answer
verified

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Correct Answer
verified
_TB6947_00...
View Answer

Failure to record depreciation expense will overstate the asset and understate the expense.

Correct Answer
verified
True

The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is:

Correct Answer
verified

Correct Answer
verified
D

Depreciation on the company's equipment for 2014 is $24,000.The company prepares and records adjusting entries on a monthly basis.How would the company record the related adjusting entry on December 31,2014?

Correct Answer
verified
C

The last four steps in the accounting cycle include preparing the adjusted trial balance,preparing financial statements,and recording closing and adjusting entries.

Correct Answer
verified

Profit margin equals ___________________ divided by net sales.

Correct Answer
verified

Adjusting entries:

Correct Answer
verified

Correct Answer
verified

On December 31,2012,a company forgot to record $7,000 of depreciation on office equipment.What would be the effect on the assets,net income,and equity when it comes to the 2012 financial statements?

Correct Answer
verified
1 Assets are overstated by $7,...
View Answer

Correct Answer
verified

In accrual accounting,accrued revenues are recorded as liabilities.

Correct Answer
verified

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Correct Answer
verified

What is the difference between GAAP and IFRS presentations of the current assets section on the balance sheet?

Correct Answer
verified

Correct Answer
verified

Financial statements are typically prepared in the following order:

Correct Answer
verified

Correct Answer
verified

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Correct Answer
verified

The current portion of long-term debt is classified with the _________________________.

Correct Answer
verified

Exam 3: Adjusting Accounts for Financial Statements

The Income Summary account is used:

Correct AnswerverifiedShow Answer

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Correct Answerverified_TB6947_00...View AnswerShow Answer

Failure to record depreciation expense will overstate the asset and understate the expense.

Correct AnswerverifiedTrue

The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Depreciation on the company's equipment for 2014 is $24,000.The company prepares and records adjusting entries on a monthly basis.How would the company record the related adjusting entry on December 31,2014?

Correct AnswerverifiedC

The last four steps in the accounting cycle include preparing the adjusted trial balance,preparing financial statements,and recording closing and adjusting entries.

Correct AnswerverifiedShow Answer

Profit margin equals ___________________ divided by net sales.

Correct AnswerverifiedShow Answer

Adjusting entries:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On December 31,2012,a company forgot to record $7,000 of depreciation on office equipment.What would be the effect on the assets,net income,and equity when it comes to the 2012 financial statements?

Correct Answerverified1 Assets are overstated by $7,...View AnswerShow Answer

Correct AnswerverifiedShow Answer

In accrual accounting,accrued revenues are recorded as liabilities.

Correct AnswerverifiedShow Answer

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Correct AnswerverifiedShow Answer

What is the difference between GAAP and IFRS presentations of the current assets section on the balance sheet?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Financial statements are typically prepared in the following order:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Correct AnswerverifiedShow Answer

The current portion of long-term debt is classified with the _________________________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
_TB6947_00...
View Answer

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1 Assets are overstated by $7,...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified