Question 1

Adjusting entries are made after the preparation of financial statements.

Accepted Answer

A) True 
 B)False

Question 2

Under the alternative method for recording prepaid expenses, which is the correct set of journal entries?
A)
$\begin{array}{|l|l|}
\hline {\text { Initial Entry }} &{\text { Adjusting Entry }} \
\hline \text { Prepaid Insurance } & \text { Cash } \
\hline \text { Insurance Expense } & \text { Prepaid Insurance } \
\hline
\end{array}$
B)
$\begin{array}{|l|l|}
\hline {\text { Initial Entry }} &{\text { Adjusting Entry }} \
\hline \text { Prepaid Insurance } & \text { Insurance Expense } \
\hline \text { Cash } & \text { Prepaid Insurance } \
\hline
\end{array}$
C)
$\begin{array}{|l|l|}
\hline {\text { Initial Entry }} &{\text { Adjusting Entry }} \
\hline \text { Prepaid Insurance } & \text { Prepaid Insurance } \
\hline \text { Cash } & \text { Insurance Expense } \
\hline
\end{array}$
D)
$\begin{array}{|l|l|}
\hline{\text { Initial Entry }} & {\text { Adjusting Entry }} \
\hline \text { Insurance Expense } & \text { Prepaid Insurance } \
\hline \text { Cash } & \text { Insurance Expense } \
\hline
\end{array}$
E)
$\begin{array}{|l|l|}
\hline {\text { Initial Entry }} &{\text { Adjusting Entry }} \
\hline \text { Cash } & \text { Prepaid Insurance } \
\hline \text { Insurance Expense } & \text { Insurance Expense } \
\hline
\end{array}$

Accepted Answer

The answer of Under the alternative method for recording prepaid...

Question 3

An annual reporting period consisting of any twelve consecutive months is known as:

Accepted Answer

A)  Calendar year.
B)  Interim financial period.
C)  Seasonal year.
D)  Fiscal year.
E)  Natural business year.F) A) and E)
G) B) and E)

Question 4

Which of the following statements related to U.S. GAAP and IFRS is incorrect?

Accepted Answer

A)  U.S. GAAP balance sheets report current items first.
B)  IFRS balance sheets normally present noncurrent items first.
C)  Both U.S. GAAP and IFRS include guidance for adjusting entries.
D)  U.S. GAAP does not require items to be separated by current and noncurrent classifications on the balance sheet.
E)  Both U.S. GAAP and IFRS prepare the same four financial statements.F) A) and D)
G) A) and E)

Question 5

A fiscal year refers to an organization's accounting period that spans twelve consecutive months or 52 weeks.

Accepted Answer

A) True 
 B)False

Question 6

The adjusting entry to record the salaries earned due to employees for services provided but unpaid at the end of the accounting period affects the accounts in which of the following ways?

Accepted Answer

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

Question 7

A company pays its employees $4,000 each Friday, which amounts to $800 per day for the five-day workweek that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is:

Accepted Answer

A)  $800.
B)  $4,000.
C)  $2,400.
D)  $3,200.
E)  $1,600.F) B) and E)
G) C) and E)

Question 8

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

Accepted Answer

A)  Assets, net income, and equity understated.
B)  Assets overstated and equity understated.
C)  Assets and equity both understated.
D)  Assets, net income, and equity overstated.
E)  Assets overstated, net income understated, and equity overstated.F) A) and C)
G) C) and E)

Question 9

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.

Accepted Answer

A) True 
 B)False

Question 10

List the three-steps of the adjusting process.

Accepted Answer

(1)Determine what the current ...

Question 11

Profit margin is defined as:

Accepted Answer

A)  Net income divided by assets.
B)  Net sales divided by assets.
C)  Net income divided by net sales.
D)  Net sales divided by net income.
E)  Revenues divided by net sales.F) C) and D)
G) C) and E)

Question 12

All plant assets, including land, are depreciated.

Accepted Answer

A) True 
 B)False

Question 13

Match between columns
                        Premises: Used to record revenue earned for which cash has not been received.
Used to record wages owed, but not yet paid.
Used to record expiration or use of prepaid insurance.
Used to record revenue earned for which cash was received in advance.

Accepted Answer

The Answer of Accrued expense and Unearned revenue and Accrued is...

Question 14

Prior to recording adjusting entries on December 31, a company's Office Supplies account had an
$780 debit balance. A physical count of the supplies showed $425 of unused supplies available as of December 31. Prepare the required adjusting entry.

Accepted Answer

The answer of Prior to recording adjusting entries on December...

Question 15

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Accepted Answer

A)  Overstate assets by $28,000.
B)  Have no effect on net income.
C)  Understate net income by $28,000.
D)  Overstate net income by $28,000.
E)  Understate assets by $28,000.F) A) and B)
G) B) and D)

Question 16

Which of the following does not require an adjusting entry at year-end?

Accepted Answer

A)  Cash invested by owner.
B)  Expired portion of prepaid insurance.
C)  Accrued interest on notes payable.
D)  Accrued wages.
E)  Supplies used during the period.F) C) and D)
G) A) and B)

Question 17

On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

Accepted Answer

A)  $1,350.00.
B)  $337.50.
C)  $37.50.
D)  $1,012.50.
E)  $450.00.F) A) and B)
G) All of the above

Question 18

Which of the following statements is incorrect?

Accepted Answer

A)  An adjusted trial balance is a list of accounts and balances prepared after adjusting entries have been recorded and posted to the ledger.
B)  Financial statements should be prepared directly from information in the unadjusted trial balance.
C)  An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.
D)  Financial statements can be prepared directly from information in the adjusted trial balance.
E)  Each trial balance amount is used in preparing the financial statements.F) C) and E)
G) C) and D)

Question 19

The balances in Sanchez Accounting Services' office supplies account on February 1 and February 28 were $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?

Accepted Answer

A)  $1,500
B)  $2,325
C)  $3,100
D)  $1,525
E)  $1,075F) A) and E)
G) A) and B)

Question 20

Match between columns
                        Premises: A balance sheet that lists items vertically in the order of assets, liabilities and equity.
A listing of accounts and balances prepared after adjustments are recorded and posted to the ledger.
Items paid for in advance of receiving their benefits; recorded as an asset when purchased and expensed when used.
Any length of time that an organization's activities are divided into and reported by financial statements.
Costs that are incurred in a period but are both unpaid and unrecorded, requiring an adjustment at the end of the period.
A listing of accounts and balances prepared after external transactions are recorded but before adjustments are recorded.
A useful measure of a company's operating results determined by dividing net income by net sales.
A 12-month period, used by companies with seasonal variation, that ends when a company's sales activities are at their lowest point.
A journal entry made at the end of an accounting period to reflect a transaction or event that is not yet recorded; affects one or more income statement account and one or more balance sheet account, but never cash.
An account linked with another account and having an opposite normal balance.

Accepted Answer

The Answer of Unadjusted trial balance and Accounting period and is...

Exam 3: Adjusting Accounts and Preparing Financial Statements

Adjusting entries are made after the preparation of financial statements.

Correct Answer
verified

Profit margin is defined as:

Correct Answer
verified

On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

Correct Answer
verified

A fiscal year refers to an organization's accounting period that spans twelve consecutive months or 52 weeks.

Correct Answer
verified

Match the appropriate definition with the following terms.

Prior to recording adjusting entries on December 31, a company's Office Supplies account had an $780 debit balance. A physical count of the supplies showed $425 of unused supplies available as of December 31. Prepare the required adjusting entry.

Correct Answer
verified

Correct Answer
verified

Which of the following does not require an adjusting entry at year-end?

Correct Answer
verified

An annual reporting period consisting of any twelve consecutive months is known as:

Correct Answer
verified

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

Correct Answer
verified

All plant assets, including land, are depreciated.

Correct Answer
verified

Which of the following statements is incorrect?

Correct Answer
verified

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.

Correct Answer
verified

Correct Answer
verified

The adjusting entry to record the salaries earned due to employees for services provided but unpaid at the end of the accounting period affects the accounts in which of the following ways?

Correct Answer
verified

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Correct Answer
verified

List the three-steps of the adjusting process.

Correct Answer
verified
(1)Determine what the current ...
View Answer

The balances in Sanchez Accounting Services' office supplies account on February 1 and February 28 were $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?

Correct Answer
verified

Match the following types of adjustments (a though d)with the transactions.

Which of the following statements related to U.S. GAAP and IFRS is incorrect?

Correct Answer
verified

Exam 3: Adjusting Accounts and Preparing Financial Statements

Adjusting entries are made after the preparation of financial statements.

Correct AnswerverifiedShow Answer

Profit margin is defined as:

Correct AnswerverifiedShow Answer

On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

Correct AnswerverifiedShow Answer

A fiscal year refers to an organization's accounting period that spans twelve consecutive months or 52 weeks.

Correct AnswerverifiedShow Answer

Match the appropriate definition with the following terms.

Prior to recording adjusting entries on December 31, a company's Office Supplies account had an $780 debit balance. A physical count of the supplies showed $425 of unused supplies available as of December 31. Prepare the required adjusting entry.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following does not require an adjusting entry at year-end?

Correct AnswerverifiedShow Answer

An annual reporting period consisting of any twelve consecutive months is known as:

Correct AnswerverifiedShow Answer

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

Correct AnswerverifiedShow Answer

All plant assets, including land, are depreciated.

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The adjusting entry to record the salaries earned due to employees for services provided but unpaid at the end of the accounting period affects the accounts in which of the following ways?

Correct AnswerverifiedShow Answer

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Correct AnswerverifiedShow Answer

List the three-steps of the adjusting process.

Correct Answerverified(1)Determine what the current ...View AnswerShow Answer

The balances in Sanchez Accounting Services' office supplies account on February 1 and February 28 were $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?

Correct AnswerverifiedShow Answer

Match the following types of adjustments (a though d)with the transactions.

Which of the following statements related to U.S. GAAP and IFRS is incorrect?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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(1)Determine what the current ...
View Answer

Correct Answer
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Correct Answer
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