Question 1

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)  $4,000.
B)  $800.
C)  $1,600.
D)  $2,400.
E)  $3,200.F) None of the above
G) D) and E)

Question 2

Closing entries are required at the end of each accounting period to close all ledger accounts.

Accepted Answer

A) True 
 B)False

Question 3

List the steps in the accounting cycle.

Accepted Answer

The accounting cycle consists of ten ste...

Question 4

The ________ depreciation method allocates equal amounts of an asset's cost to depreciation during its useful life.

Accepted Answer

The answer of The ________ depreciation method allocates equal amounts...

Question 5

The Income Summary account is used to:

Accepted Answer

A)  Adjust and update asset and liability accounts.
B)  Close the revenue and expense accounts.
C)  Determine the appropriate dividend amount.
D)  Replace the income statement under certain circumstances.
E)  Replace the Retained earnings account in some businesses.F) A) and D)
G) C) and D)

Question 6

Profit margin = ________ divided by net sales.

Accepted Answer

The answer of Profit margin = ________ divided by net...

Question 7

All of the following are true regarding unearned revenues except:

Accepted Answer

A)  They are payments received in advance of services performed.
B)  The adjusting entry for unearned revenues increases assets and increases revenues.
C)  The adjusting entry for unearned revenues increases revenues and decreases liabilities.
D)  They are liabilities.
E)  As they are earned,they become revenues.F) B) and E)
G) C) and D)

Question 8

Adjustments are necessary to bring an asset or liability account to its proper amount and also update a related expense or revenue account.

Accepted Answer

A) True 
 B)False

Question 9

On December 31,Jacoby Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15.Jacoby follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.The adjusting entry needed on December 31 to accrue this cost is:

Accepted Answer

A)  Debit Supplies $385; credit Accounts Payable $385.
B)  Debit Accounts Payable $385; credit Supplies $385.
C)  Debit Accounts Payable $385; credit Cash $385.
D)  Debit Supplies Expense $385; credit Cash $385.
E)  Debit Supplies Expense $385; credit Supplies $385.F) C) and E)
G) A) and C)

Question 10

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Accepted Answer

A)  The balances in the Income Statement credit column are revenues.
B)  The balances in the Income Statement credit column are unearned revenues.
C)  The balances in the Income Statement debit column are expenses.
D)  The difference between the totals of the Income Statement columns is net income or net loss.
E)  The net income or net loss from the Income Statement columns is entered in the Balance Sheet & Statement of Retained Earnings columns.F) A) and B)
G) None of the above

Question 11

Asset and liability balances are transferred from the adjusted trial balance to the income statement.

Accepted Answer

A) True 
 B)False

Question 12

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows:
  Present the four adjusting journal entries that were recorded by Trapper Company.

Accepted Answer

The answer of Trapper Company's unadjusted and adjusted trial balances...

Question 13

Reversing entries:

Accepted Answer

A)  Are optional.
B)  Are mandatory.
C)  Correct errors in journal entries.
D)  Are required by GAAP.
E)  Are prepared on the worksheet.F) B) and D)
G) A) and B)

Question 14

A company's employees earn a total of $10,000 per week for a 5-day week that begins on Monday.December 31 of Year 1 is a Monday,and all employees worked that day.
a)Prepare the required adjusting journal entry to record accrued salaries on December 31,Year 1.
b)Prepare the journal entry to record the payment of salaries on January 4,Year 2.(Assume no reversing entries were made).

Accepted Answer

The answer of A company's employees earn a total of...

Question 15

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Accepted Answer

A) True 
 B)False

Question 16

Chase Company rents space to a tenant for $2,200 per month.The tenant currently owes rent for November and December.The tenant has agreed to pay the November,December,and January rents in full on January 15 and has agreed not to fall behind again.The adjusting entry needed on December 31 is:

Accepted Answer

A)  Debit Rent Receivable,$6,600; credit Rent Earned,$6,600.
B)  Debit Unearned Rent,$4,400; credit Rent Earned,$4,400.
C)  Debit Unearned Rent,$2,200; credit Rent Earned,$2,200.
D)  Debit Rent Receivable,$4,400; credit Rent Earned,$4,400.
E)  Debit Rent Receivable,$2,200; credit Rent Earned,$2,200.F) C) and D)
G) D) and E)

Question 17

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Accepted Answer

A) True 
 B)False

Question 18

Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities and collect accrued receivables from the previous accounting period.

Accepted Answer

A) True 
 B)False

Question 19

On November 1,Jasper Company loaned another company $100,000 at a 6.0% interest rate.The note receivable plus interest will not be collected until March 1 of the following year.The company's annual accounting period ends on December 31,and adjustments are only made at year-end.The adjusting entry needed on December 31 is:

Accepted Answer

A)  No entry required.
B)  Debit Interest Expense,$5,000; credit Interest Payable,$5,000.
C)  Debit Interest Expense,$1,000; credit Note Payable,$1,000.
D)  Debit Interest Receivable,$500; credit Interest Revenue,$500.
E)  Debit Interest Receivable,$1,000; credit Interest Revenue,$1,000.F) B) and D)
G) A) and C)

Question 20

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

Accepted Answer

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

Exam 3: Adjusting Accounts for Financial Statements

Adjustments are necessary to bring an asset or liability account to its proper amount and also update a related expense or revenue account.

Correct Answer
verified

Closing entries are required at the end of each accounting period to close all ledger accounts.

Correct Answer
verified

Profit margin = ________ divided by net sales.

Correct Answer
verified

The Income Summary account is used to:

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

Correct Answer
verified

Chase Company rents space to a tenant for $2,200 per month.The tenant currently owes rent for November and December.The tenant has agreed to pay the November,December,and January rents in full on January 15 and has agreed not to fall behind again.The adjusting entry needed on December 31 is:

Correct Answer
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Correct Answer
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Correct Answer
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All of the following are true regarding unearned revenues except:

Correct Answer
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Asset and liability balances are transferred from the adjusted trial balance to the income statement.

Correct Answer
verified

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Correct Answer
verified

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

Correct Answer
verified

Reversing entries:

Correct Answer
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Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities and collect accrued receivables from the previous accounting period.

Correct Answer
verified

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:

Correct Answer
verified

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Correct Answer
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List the steps in the accounting cycle.

Correct Answer
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The accounting cycle consists of ten ste...
View Answer

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Correct Answer
verified

Correct Answer
verified

The ________ depreciation method allocates equal amounts of an asset's cost to depreciation during its useful life.

Correct Answer
verified

Exam 3: Adjusting Accounts for Financial Statements

Adjustments are necessary to bring an asset or liability account to its proper amount and also update a related expense or revenue account.

Correct AnswerverifiedShow Answer

Closing entries are required at the end of each accounting period to close all ledger accounts.

Correct AnswerverifiedShow Answer

Profit margin = ________ divided by net sales.

Correct AnswerverifiedShow Answer

The Income Summary account is used to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Chase Company rents space to a tenant for $2,200 per month.The tenant currently owes rent for November and December.The tenant has agreed to pay the November,December,and January rents in full on January 15 and has agreed not to fall behind again.The adjusting entry needed on December 31 is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following are true regarding unearned revenues except:

Correct AnswerverifiedShow Answer

Asset and liability balances are transferred from the adjusted trial balance to the income statement.

Correct AnswerverifiedShow Answer

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Correct AnswerverifiedShow Answer

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

Correct AnswerverifiedShow Answer

Reversing entries:

Correct AnswerverifiedShow Answer

Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities and collect accrued receivables from the previous accounting period.

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Correct AnswerverifiedShow Answer

List the steps in the accounting cycle.

Correct AnswerverifiedThe accounting cycle consists of ten ste...View AnswerShow Answer

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The ________ depreciation method allocates equal amounts of an asset's cost to depreciation during its useful life.

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 accounting cycle consists of ten ste...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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