Question 1

The adjustment for supplies used during the period will result in a debit to the ________ account and a credit to the ________ account.

Accepted Answer

A)  Supplies Expense;Supplies
B)  Inventory;Cost of Goods Sold
C)  Supplies;Supplies Expense
D)  Cost of Goods Sold;Revenue

Question 2

Match each transaction with the type of entry that will be required at April 30,the company's year-end.
-The company makes an entry to allocate the use of equipment during the current account period.

Accepted Answer

A)  Closing entry
B)  Deferral adjusting entry
C)  Accrual adjusting entry

Question 3

Boston Enterprises declared and paid a dividend of $11,600 this year.The entry to close the Dividend at the end of the year will include a debit to:

Accepted Answer

A)  Dividends and a credit to Cash for $11,600.
B)  Retained Earnings and a credit to Dividends for $11,600.
C)  Dividends and a credit to Retained Earnings for $11,600.
D)  Dividends and a credit to Dividends Payable for $11,600.

Question 4

If no errors have been made,when a company prepares its adjusted trial balance:

Accepted Answer

A)  assets will equal liabilities plus Retained Earnings.
B)  stockholders' equity will include the current period's net income.
C)  the debit column and the credit column will be equal.
D)  income statement accounts will have been closed.

Question 5

Which of the following statements about the income statement is correct?

Accepted Answer

A)  Expenses are listed before revenues on the income statement.
B)  Revenues are listed before expenses on the income statement.
C)  The income statement is prepared after the balance sheet.
D)  Dividends are listed on the income statement.

Question 6

Which of the following accounts would be classified as a current asset on a classified balance sheet?

Accepted Answer

A)  Accumulated Depreciation
B)  Equipment
C)  Dividends
D)  Supplies

Question 7

What are the effects on the financial condition of the business from the adjustment for revenues earned,but not yet collected,during the accounting period?

Accepted Answer

A)  Total assets will increase and total stockholders' equity will decrease.
B)  Total assets will decrease and total stockholders' equity will decrease.
C)  Total assets will increase and total stockholders' equity will increase.
D)  Total assets will decrease and total stockholders' equity will increase.

Question 8

During the company's first year of operations,supplies costing $8,700 were purchased and recorded in the Supplies account.At the end of the period,supplies costing $4,500 were left.What adjusting entry must be made?

Accepted Answer

A)  Debit Cash and credit Supplies for $4,500.
B)  Debit Supplies Expense and credit Supplies for $8,700.
C)  Debit Supplies and credit Supplies Expense for $4,200.
D)  Debit Supplies Expense and credit Supplies for $4,200.

Question 9

A deferral adjustment may involve one asset and one liability account.

Accepted Answer

A) True 
 B)False

Question 10

Grizzly Company had Retained Earnings at December 31,2018 of $300,000.During 2019,the company had revenues of $600,000 and expenses of $525,000,and the company declared and paid dividends of $16,500.Retained earnings on the balance sheet as of December 31,2019 will be:

Accepted Answer

A)  $58,500.
B)  $358,500.
C)  $375,000.
D)  $433,500.

Question 11

If a company forgot to prepare an adjusting entry to record salaries and wages incurred but unpaid at the end of the period,Total Liabilities would be understated and Retained Earnings would be understated on the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 12

After the adjustments have been completed,the adjusted balance in the Depreciation Expense account represents the:

Accepted Answer

A)  total depreciation that has accrued on the long-lived assets since their purchase.
B)  decline in the market value of the long-lived assets.
C)  cash paid for the long-lived assets in the accounting period.
D)  depreciation for the current period.

Question 13

Which of the following statements is correct regarding the use of the cash account in deferral and accrual adjustments at the end of the accounting period?

Accepted Answer

A)  The Cash account can only be used in an accrual adjustment,but not in a deferral adjustment.
B)  The Cash account can only be used in a deferral adjustment,but not in an accrual adjustment.
C)  Transactions involving cash are often included in both accrual and deferral adjustments at the end of the accounting period.
D)  Cash is never involved in end-of-period deferral or accrual adjustments.

Question 14

An error must have been made if which of the following accounts appears on the post-closing trial balance with a balance other than zero?

Accepted Answer

A)  Equipment
B)  Common Stock
C)  Accumulated Depreciation
D)  Depreciation Expense

Question 15

Accrual adjustments involve increasing:

Accepted Answer

A)  assets and revenues or increasing liabilities and expenses.
B)  assets and expenses or increasing liabilities and revenues.
C)  assets and decreasing revenues or increasing liabilities and decreasing expenses.
D)  assets and decreasing expenses or increasing liabilities and decreasing revenues.

Question 16

Dividends:

Accepted Answer

A)  are an expense of doing business.
B)  are a legal obligation that a company must pay annually.
C)  are reported only on the statement of retained earnings.
D)  are reported on the balance sheet.

Question 17

Which of the following best describes when an accrual adjustment is required?

Accepted Answer

A)  An expense has been incurred and paid in cash.
B)  An expense has been incurred but not yet paid in cash.
C)  An expense has not been incurred,but cash has been paid.
D)  An expense has not been incurred nor has it been paid in cash.

Question 18

Bakersfield Corp.pays income tax at an average rate of 30 percent.This year its revenue is $145,000 and its expenses are $101,500.The adjusting entry to record the income tax expense will:

Accepted Answer

A)  decrease net income by $43,500.
B)  increase stockholders' equity by $13,050.
C)  decrease stockholders' equity by $13,050.
D)  decrease liabilities by $13,050.

Question 19

When existing assets are used up in the ordinary course of business:

Accepted Answer

A)  an expense is recorded.
B)  Deferred revenue is recorded.
C)  an accrual is recorded.
D)  a prepaid expense is recorded.

Question 20

Adjustments to expense accounts at the end of the accounting period are made to adhere to accrual accounting principles,specifically the ________ principle.

Accepted Answer

A)  expense recognition ("matching") 
B)  revenue recognition
C)  cost
D)  contra-account

Exam 4: Adjustments,Financial Statements,and Financial Results

Which of the following accounts would be classified as a current asset on a classified balance sheet?

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Accrual adjustments involve increasing:

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Match each transaction with the type of entry that will be required at April 30,the company's year-end. -The company makes an entry to allocate the use of equipment during the current account period.

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A deferral adjustment may involve one asset and one liability account.

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If a company forgot to prepare an adjusting entry to record salaries and wages incurred but unpaid at the end of the period,Total Liabilities would be understated and Retained Earnings would be understated on the Balance Sheet.

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If no errors have been made,when a company prepares its adjusted trial balance:

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The adjustment for supplies used during the period will result in a debit to the ________ account and a credit to the ________ account.

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Adjustments to expense accounts at the end of the accounting period are made to adhere to accrual accounting principles,specifically the ________ principle.

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After the adjustments have been completed,the adjusted balance in the Depreciation Expense account represents the:

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Bakersfield Corp.pays income tax at an average rate of 30 percent.This year its revenue is $145,000 and its expenses are $101,500.The adjusting entry to record the income tax expense will:

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Dividends:

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What are the effects on the financial condition of the business from the adjustment for revenues earned,but not yet collected,during the accounting period?

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An error must have been made if which of the following accounts appears on the post-closing trial balance with a balance other than zero?

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Boston Enterprises declared and paid a dividend of $11,600 this year.The entry to close the Dividend at the end of the year will include a debit to:

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Which of the following statements about the income statement is correct?

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When existing assets are used up in the ordinary course of business:

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Grizzly Company had Retained Earnings at December 31,2018 of $300,000.During 2019,the company had revenues of $600,000 and expenses of $525,000,and the company declared and paid dividends of $16,500.Retained earnings on the balance sheet as of December 31,2019 will be:

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Which of the following best describes when an accrual adjustment is required?

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During the company's first year of operations,supplies costing $8,700 were purchased and recorded in the Supplies account.At the end of the period,supplies costing $4,500 were left.What adjusting entry must be made?

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Which of the following statements is correct regarding the use of the cash account in deferral and accrual adjustments at the end of the accounting period?

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The adjustment for supplies used during the period will result in a debit to the account and a credit to the account.

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