Question 1

Accrued revenues:

Accepted Answer

A)  At the end of one accounting period result in cash receipts in a future period.
B)  At the end of one accounting period often result in cash payments in the next period.
C)  Are also called unearned revenues.
D)  Are listed on the balance sheet as liabilities.
E)  Are recorded at the end of an accounting period because cash has already been received for revenues earned.

Question 2

It is acceptable to record cash received in advance of providing products or services to revenue accounts if an adjusting entry is made at the end of the period to bring the liability account balance to the correct unearned amount.

Accepted Answer

A) True 
 B)False

Question 3

Closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period.

Accepted Answer

A) True 
 B)False

Question 4

The correct adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31 is:

Accepted Answer

A)  debit Salary Expense,$9,000; credit Cash,$9,000
B)  debit Salary Expense,$9,000; credit Fees Earned,$9,000
C)  debit Salary Expense,$9,000; credit Prepaid Salary,$9,000
D)  debit Salary Expense,$9,000; credit Salaries Payable,$9,000
E)  debit Salaries Payable,$9,000; credit Salary Expense $9,000

Question 5

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

Question 6

Match between columns
                        Premises: A method that allocates equal amounts of an asset's cost (less any salvage value)to depreciation expense during its useful life.
The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.
Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets.
Assumes that an organization's activities can be divided into specific time periods such as months,quarters,or years.
Aims to record expenses in the same accounting period as the revenues that are earned as a result of those expenses.
A set of financial statements that covers less than one year,typically one,three,or six months of activity.
The process of allocating the costs of long-term assets to the income statement over their expected useful lives.
The accounting system that uses the adjusting process to recognize revenues when earned and expenses when incurred.

Accepted Answer

The Answer of Fiscal year and Interim financial statements and is...

Question 7

The adjusted trial balance contains information pertaining to:

Accepted Answer

A)  Asset accounts only.
B)  Balance sheet accounts only.
C)  Income statement accounts only.
D)  All general ledger accounts.
E)  Revenue accounts only.

Question 8

A company earned $3,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Accepted Answer

A)  3%.
B)  30%.
C)  33%.
D)  333%.
E)  33.3%

Question 9

After posting the entries to close all revenue and expense accounts,the Income Summary account of Cleaver Auto Services has a $4,000 debit balance.This result implies that Cleaver earned a net income of $4,000.

Accepted Answer

A) True 
 B)False

Question 10

________ 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 11

Truman had total assets of $149,501,000,net income of $6,276,090,and net sales of $209,203,000.Its profit margin was 3%.

Accepted Answer

A) True 
 B)False

Question 12

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000.
-What is the correct closing entry for the expense accounts?

Accepted Answer

A)  Debit Income Summary $39,800; credit Expense accounts $39,800.
B)  Debit Expense accounts $37,000; credit Retained earnings $37,000.
C)  Credit Expense accounts $39,800; debit Retained earnings $39,800.
D)  Debit Expense accounts $39,800; credit Income Summary $39,800.
E)  Debit Income Summary $39,800; credit Retained earnings $39,800.

Question 13

The accrual basis of accounting:

Accepted Answer

A)  Is generally accepted for external reporting because it is more useful than cash basis for most business decisions.
B)  Is flawed because it gives complete information about cash flows.
C)  Recognizes revenues when received in cash.
D)  Recognizes expenses when paid in cash.
E)  Eliminates the need for adjusting entries at the end of each period.

Question 14

A ________ account is an account linked with another account,having an opposite normal balance,and reported as a subtraction from that other account's balance.

Accepted Answer

The answer of A ________ account is an account linked...

Question 15

A company paid Jen Rogers,its sole stockholder,a total of $35,000 in dividends during the current year.The entry needed to close the dividends account is:

Accepted Answer

A)  Debit Income Summary and credit Cash for $35,000.
B)  Debit Dividends and credit Cash for $35,000.
C)  Debit Income Summary and credit Dividends for $35,000.
D)  Debit Retained earnings and credit Dividends for $35,000.
E)  Debit Dividends and credit Retained earnings for $35,000.

Question 16

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

Accepted Answer

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

Question 17

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.

Question 18

On May 1,a two-year insurance policy was purchased for $18,000 with coverage to begin immediately.What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?

Accepted Answer

A)  $750.
B)  $5,270.
C)  $6,000.
D)  $6,750.
E)  $18,000.

Question 19

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show correct balances even though all transactions were properly recorded.

Accepted Answer

A) True 
 B)False

Question 20

Profit margin measures the relation of debt to assets.

Accepted Answer

A) True 
 B)False

Exam 3: Adjusting Accounts for Financial Statements

It is acceptable to record cash received in advance of providing products or services to revenue accounts if an adjusting entry is made at the end of the period to bring the liability account balance to the correct unearned amount.

Correct Answer
verified

The correct adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31 is:

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

After posting the entries to close all revenue and expense accounts,the Income Summary account of Cleaver Auto Services has a $4,000 debit balance.This result implies that Cleaver earned a net income of $4,000.

Correct Answer
verified

A company paid Jen Rogers,its sole stockholder,a total of $35,000 in dividends during the current year.The entry needed to close the dividends account is:

Correct Answer
verified

The accrual basis of accounting:

Correct Answer
verified

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show correct balances even though all transactions were properly recorded.

Correct Answer
verified

Profit margin measures the relation of debt to assets.

Correct Answer
verified

A company earned $3,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Correct Answer
verified

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000. -What is the correct closing entry for the expense accounts?

Correct Answer
verified

Truman had total assets of $149,501,000,net income of $6,276,090,and net sales of $209,203,000.Its profit margin was 3%.

Correct Answer
verified

Closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period.

Correct Answer
verified

Match the following terms with the appropriate definition.

Accrued revenues:

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

On May 1,a two-year insurance policy was purchased for $18,000 with coverage to begin immediately.What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?

Correct Answer
verified

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

Correct Answer
verified

A ________ account is an account linked with another account,having an opposite normal balance,and reported as a subtraction from that other account's balance.

Correct Answer
verified

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

Correct Answer
verified

The adjusted trial balance contains information pertaining to:

Correct Answer
verified

Exam 3: Adjusting Accounts for Financial Statements

It is acceptable to record cash received in advance of providing products or services to revenue accounts if an adjusting entry is made at the end of the period to bring the liability account balance to the correct unearned amount.

Correct AnswerverifiedShow Answer

The correct adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31 is:

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

After posting the entries to close all revenue and expense accounts,the Income Summary account of Cleaver Auto Services has a $4,000 debit balance.This result implies that Cleaver earned a net income of $4,000.

Correct AnswerverifiedShow Answer

A company paid Jen Rogers,its sole stockholder,a total of $35,000 in dividends during the current year.The entry needed to close the dividends account is:

Correct AnswerverifiedShow Answer

The accrual basis of accounting:

Correct AnswerverifiedShow Answer

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show correct balances even though all transactions were properly recorded.

Correct AnswerverifiedShow Answer

Profit margin measures the relation of debt to assets.

Correct AnswerverifiedShow Answer

A company earned $3,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Correct AnswerverifiedShow Answer

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000. -What is the correct closing entry for the expense accounts?

Correct AnswerverifiedShow Answer

Truman had total assets of $149,501,000,net income of $6,276,090,and net sales of $209,203,000.Its profit margin was 3%.

Correct AnswerverifiedShow Answer

Closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period.

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition.

Accrued revenues:

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

On May 1,a two-year insurance policy was purchased for $18,000 with coverage to begin immediately.What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A ________ account is an account linked with another account,having an opposite normal balance,and reported as a subtraction from that other account's balance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The adjusted trial balance contains information pertaining to:

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified