Question 1

On December 31,Jacoby Company's Prepaid Rent account had a balance before adjustment of $6,000.Three months' rent was paid in advance on December 1,the first day of the lease term.The adjusting entry needed on December 31 is:

Accepted Answer

A)  Debit Prepaid Rent $6,000; credit Cash $6,000.
B)  Debit Rent Expense $2,000; credit Accounts Payable $2,000.
C)  Debit Rent Expense $2,000; credit Prepaid Rent $2,000.
D)  Debit Cash $2,000; credit Prepaid Rent $2,000.
E)  Debit Rent Expense $6,000; credit Accounts Payable $6,000.F) A) and E)
G) A) and B)

Question 2

________ expenses are those costs that are incurred in a period but are both unpaid and unrecorded.

Accepted Answer

The answer of ________ expenses are those costs that are...

Question 3

If Bojana Tax Services' office supplies account balance on March 1 was $1,400,the company purchased $675 of supplies during the month,and a physical count of supplies on hand at the end of March indicated $1,250 unused,what is the amount of the adjusting entry for office supplies on March 31?

Accepted Answer

A)  $675
B)  $825
C)  $1,250
D)  $1,975
E)  $525F) A) and B)
G) D) and E)

Question 4

Flagg records adjusting entries at its December 31 year-end.At December 31,employees had earned $12,000 of unpaid and unrecorded salaries.The next payday is January 3,at which time $30,000 will be paid.Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1.

Accepted Answer

A)  Debit Salaries expense $12,000; debit Salaries payable $18,000; credit Cash $30,000.
B)  Debit Salaries expense $30,000; credit Cash $30,000.
C)  Debit Salaries payable $30,000; credit Cash $30,000.
D)  Debit Salaries expense $18,000,debit Salaries payable $12,000; credit Cash $30,000.
E)  Debit Salaries expense $18,000; credit Cash $18,000.F) B) and C)
G) A) and E) B

Question 5

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 6

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) A) and C)
G) D) and E)

Question 7

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

Accepted Answer

A) True 
 B)False

Question 8

The accrual basis of accounting reflects the principle that revenue is recorded when it is earned,not when cash is received.

Accepted Answer

A) True 
 B)False

Question 9

Profit margin is calculated by dividing net sales by net income.

Accepted Answer

A) True 
 B)False

Question 10

If a company plans to continue business into the future,closing entries are not required.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements about a company's operating cycle is not true:

Accepted Answer

A)  Non-current items are those expected to come due within one year or the company's operating cycle.
B)  The operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services.
C)  The length of a company's operating cycle depends on its activities.
D)  For a merchandiser selling products,the operating cycle is the time span between paying suppliers for merchandise and receiving cash from customers.
E)  Most operating cycles are less than one year.F) A) and B)
G) B) and E)

Question 12

________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Accepted Answer

The answer of ________ is the process of allocating the...

Question 13

Chase Company has 10 employees,who earn a total of $1,800 in salaries each working day.They are paid on Monday for the five-day workweek ending on the previous Friday.Assume that year ended on December 31,which is a Wednesday,and all employees will be paid salaries for five full days on the following Monday.The adjusting entry needed on December 31 is:

Accepted Answer

A)  Debit Salaries Expense,$5,400; credit Salaries Payable,$5,400.
B)  Debit Salaries Expense,$3,600; credit Salaries Payable,$3,600.
C)  Debit Salaries Expense,$9,000; credit Salaries Payable,$9,000.
D)  Debit Salaries Payable,$5,400; credit Salaries Expense,$5,400.
E)  Debit Salaries Expense,$5,400; credit Cash,$5,400.F) C) and D)
G) A) and B) A

Question 14

The following information is available for the Noir Detective Agency.After closing entries are posted,what will be the balance in the Retained earnings account?

Accepted Answer

A)  $239,400.
B)  $274,600.
C)  $303,400.
D)  $289,000.
E)  $257,000.F) A) and E)
G) B) and E) A

Question 15

An ________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Accepted Answer

unadjusted...

Question 16

Use the information in the adjusted trial balance presented below to calculate the current ratio for Wicked Wicker Company:

Accepted Answer

A)  1.87.
B)  .54.
C)  3.92.
D)  1.77.
E)  1.60.F) B) and D)
G) A) and C)

Question 17

The cash basis of accounting recognizes revenues when cash payments from customers are received.

Accepted Answer

A) True 
 B)False

Question 18

A physical count of supplies on hand at the end of May for Masters,Inc.indicated $1,250 of supplies on hand.The general ledger balance before any adjustment is $2,100.What is the adjusting entry for office supplies that should be recorded on May 31?

Accepted Answer

A)  Debit Supplies Expense $1,250 and credit Supplies $1,250.
B)  Debit Prepaid Supplies $850 and credit Supplies Expense $850.
C)  Debit Supplies Expense $1,250 and credit Supplies $2,100.
D)  Debit Supplies $1,250 and credit Cash $1,250.
E)  Debit Supplies Expense $850 and credit Supplies $850.F) C) and D)
G) A) and B)

Question 19

In its first year of operations,Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received from customers) ; Incurred expenses of $35,000 ($31,000 cash paid toward them) ; Prepaid $8,000 cash for costs that will not be expensed until next year.Net income under the accrual basis of accounting is:

Accepted Answer

A)  $17,000.
B)  $21,000.
C)  $13,000.
D)  $25,000.
E)  None of the answer choices is correct.F) A) and D)
G) D) and E)

Question 20

On April 1,Otisco,Inc.paid Garcia Publishing Company $1,548 for 36-month subscriptions to several different magazines.Otisco debited the prepayment to a Prepaid Subscriptions account,and the subscriptions started immediately.What amount should appear in the Prepaid Subscription account for Otisco,Inc.after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made?

Accepted Answer

A)  $1,548.
B)  $387.
C)  $516.
D)  $1,161.
E)  $0.F) C) and E)
G) All of the above

Exam 3: Adjusting Accounts for Financial Statements

On December 31,Jacoby Company's Prepaid Rent account had a balance before adjustment of $6,000.Three months' rent was paid in advance on December 1,the first day of the lease term.The adjusting entry needed on December 31 is:

Correct Answer
verified

________ expenses are those costs that are incurred in a period but are both unpaid and unrecorded.

Correct Answer
verified

If Bojana Tax Services' office supplies account balance on March 1 was $1,400,the company purchased $675 of supplies during the month,and a physical count of supplies on hand at the end of March indicated $1,250 unused,what is the amount of the adjusting entry for office supplies on March 31?

Correct Answer
verified

Correct Answer
verified
B

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

Reversing entries:

Correct Answer
verified

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

Correct Answer
verified

The accrual basis of accounting reflects the principle that revenue is recorded when it is earned,not when cash is received.

Correct Answer
verified

Profit margin is calculated by dividing net sales by net income.

Correct Answer
verified

If a company plans to continue business into the future,closing entries are not required.

Correct Answer
verified

Which of the following statements about a company's operating cycle is not true:

Correct Answer
verified

________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Correct Answer
verified

Correct Answer
verified
A

The following information is available for the Noir Detective Agency.After closing entries are posted,what will be the balance in the Retained earnings account?

Correct Answer
verified
A

An ________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Correct Answer
verified
unadjusted...
View Answer

Use the information in the adjusted trial balance presented below to calculate the current ratio for Wicked Wicker Company:

Correct Answer
verified

The cash basis of accounting recognizes revenues when cash payments from customers are received.

Correct Answer
verified

A physical count of supplies on hand at the end of May for Masters,Inc.indicated $1,250 of supplies on hand.The general ledger balance before any adjustment is $2,100.What is the adjusting entry for office supplies that should be recorded on May 31?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exam 3: Adjusting Accounts for Financial Statements

On December 31,Jacoby Company's Prepaid Rent account had a balance before adjustment of $6,000.Three months' rent was paid in advance on December 1,the first day of the lease term.The adjusting entry needed on December 31 is:

Correct AnswerverifiedShow Answer

________ expenses are those costs that are incurred in a period but are both unpaid and unrecorded.

Correct AnswerverifiedShow Answer

If Bojana Tax Services' office supplies account balance on March 1 was $1,400,the company purchased $675 of supplies during the month,and a physical count of supplies on hand at the end of March indicated $1,250 unused,what is the amount of the adjusting entry for office supplies on March 31?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

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

Reversing entries:

Correct AnswerverifiedShow Answer

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

Correct AnswerverifiedShow Answer

The accrual basis of accounting reflects the principle that revenue is recorded when it is earned,not when cash is received.

Correct AnswerverifiedShow Answer

Profit margin is calculated by dividing net sales by net income.

Correct AnswerverifiedShow Answer

If a company plans to continue business into the future,closing entries are not required.

Correct AnswerverifiedShow Answer

Which of the following statements about a company's operating cycle is not true:

Correct AnswerverifiedShow Answer

________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

The following information is available for the Noir Detective Agency.After closing entries are posted,what will be the balance in the Retained earnings account?

Correct AnswerverifiedA

An ________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Correct Answerverifiedunadjusted...View AnswerShow Answer

Use the information in the adjusted trial balance presented below to calculate the current ratio for Wicked Wicker Company:

Correct AnswerverifiedShow Answer

The cash basis of accounting recognizes revenues when cash payments from customers are received.

Correct AnswerverifiedShow Answer

A physical count of supplies on hand at the end of May for Masters,Inc.indicated $1,250 of supplies on hand.The general ledger balance before any adjustment is $2,100.What is the adjusting entry for office supplies that should be recorded on May 31?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

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
A

Correct Answer
verified
A

Correct Answer
verified
unadjusted...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified