Question 1

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Accepted Answer

A) True 
 B)False

Question 2

Deferred expenses have

Accepted Answer

A)  not yet been recorded as expenses but have been paid
B)  been recorded as expenses and paid
C)  been incurred and paid
D)  not yet been recorded as expensesE) B) and D)
F) All of the above

Question 3

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as an

Accepted Answer

A)  asset
B)  liability
C)  contra asset
D)  stockholders' equityE) B) and C)
F) A) and D)

Question 4

The account type and normal balance of Unearned Revenue is

Accepted Answer

A)  revenue,credit
B)  expense,debit
C)  liability,credit
D)  asset,debitE) All of the above
F) A) and B)

Question 5

Revenues and expenses should be recorded in the same period to which they relate.

Accepted Answer

A) True 
 B)False

Question 6

The net book value of a fixed asset is determined by the original cost

Accepted Answer

A)  less accumulated depreciation
B)  less depreciation expense
C)  less accumulated depreciation plus depreciation expense
D)  plus accumulated depreciationE) All of the above
F) B) and C)

Question 7

Adjusting journal entries are dated on the last day of the period.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

Accepted Answer

A)  debit Insurance Expense,$3,000; credit Prepaid Insurance,$3,000
B)  debit Insurance Expense,$14,000; credit Prepaid Insurance,$14,000
C)  debit Prepaid Insurance,$11,000; credit Insurance Expense,$11,000
D)  debit Insurance Expense,$11,000; credit Prepaid Insurance,$11,000E) C) and D)
F) All of the above

Question 9

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Accepted Answer

A)  prepaid
B)  deferred
C)  accrued
D)  matchedE) B) and D)
F) B) and C)

Question 10

The net income reported on the income statement is $58,000 .However , adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Accepted Answer

A)  $56,700
B)  $58,000
C)  $55,800
D)  $54,500E) B) and C)
F) C) and D)

Question 11

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Accepted Answer

A) True 
 B)False

Question 12

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Accepted Answer

A)  depreciation
B)  deferral
C)  accrual
D)  inventoryE) None of the above
F) B) and D)

Question 13

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)  Record payment of fees earned.
B)  Record fees earned at the end of the month.
C)  Record fees that have not been earned at the end of the month.
D)  Record payment of fees to be earned.E) A) and D)
F) A) and C)

Question 15

Accrued revenues would appear on the balance sheet as

Accepted Answer

A)  assets
B)  liabilities
C)  stockholders' equity
D)  prepaid expensesE) C) and D)
F) B) and D)

Question 16

Generally accepted accounting principles require that companies use the of accounting.

Accepted Answer

A)  cash basis
B)  deferral basis
C)  accrual basis
D)  account basisE) None of the above
F) B) and C)

Question 17

The revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Accepted Answer

A) True 
 B)False

Question 18

A company realizes that the last two days' revenue for the month was billed but not recorded.The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Accepted Answer

A) True 
 B)False

Question 19

A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The last payday of December is Friday,December 27.Assume the next pay period begins on Monday,December 30 and the proper adjusting entry is journalized at the end of the fiscal period December 31.Journalize the entry for the payment of the payroll on Friday,January 10.

Accepted Answer

Accrued salaries for December = $20,000/...

Question 20

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

Accepted Answer

None...

Exam 3: The Adjusting Process

A company realizes that the last two days' revenue for the month was billed but not recorded.The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Correct Answer
verified

Revenues and expenses should be recorded in the same period to which they relate.

Correct Answer
verified

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Correct Answer
verified

The revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Correct Answer
verified

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Correct Answer
verified

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as an

Correct Answer
verified

The account type and normal balance of Unearned Revenue is

Correct Answer
verified

Generally accepted accounting principles require that companies use the of accounting.

Correct Answer
verified

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

Correct Answer
verified

The net income reported on the income statement is $58,000 .However , adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Correct Answer
verified

The net book value of a fixed asset is determined by the original cost

Correct Answer
verified

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

Correct Answer
verified

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Correct Answer
verified

Deferred expenses have

Correct Answer
verified

Correct Answer
verified
Accrued salaries for December = $20,000/...
View Answer

Accrued revenues would appear on the balance sheet as

Correct Answer
verified

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Correct Answer
verified

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

Correct Answer
verified
None...
View Answer

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

Correct Answer
verified

Adjusting journal entries are dated on the last day of the period.

Correct Answer
verified

Exam 3: The Adjusting Process

A company realizes that the last two days' revenue for the month was billed but not recorded.The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Correct AnswerverifiedShow Answer

Revenues and expenses should be recorded in the same period to which they relate.

Correct AnswerverifiedShow Answer

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Correct AnswerverifiedShow Answer

The revenue recognition concept requires that the reporting of revenue be included in the period when cash for the service is received.

Correct AnswerverifiedShow Answer

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

Correct AnswerverifiedShow Answer

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as an

Correct AnswerverifiedShow Answer

The account type and normal balance of Unearned Revenue is

Correct AnswerverifiedShow Answer

Generally accepted accounting principles require that companies use the of accounting.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The net income reported on the income statement is $58,000 .However , adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is

Correct AnswerverifiedShow Answer

The net book value of a fixed asset is determined by the original cost

Correct AnswerverifiedShow Answer

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

Correct AnswerverifiedShow Answer

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Correct AnswerverifiedShow Answer

Deferred expenses have

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAccrued salaries for December = $20,000/...View AnswerShow Answer

Accrued revenues would appear on the balance sheet as

Correct AnswerverifiedShow Answer

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Correct AnswerverifiedShow Answer

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

Correct AnswerverifiedNone...View AnswerShow Answer

When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.

Correct AnswerverifiedShow Answer

Adjusting journal entries are dated on the last day of the period.

Correct AnswerverifiedShow 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Accrued salaries for December = $20,000/...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
None...
View Answer

Correct Answer
verified

Correct Answer
verified