Question 1

Three-fifths (60%) of the amount recorded as unearned revenue remains unearned as of 12/31/13.The adjusting entry would include

Accepted Answer

A)  a credit to service revenue for $3,000.
B)  a credit to unearned revenue for $3,000.
C)  a credit to service revenue for $2,000.
D)  a credit to unearned revenue for $2,000.E) All of the above
F) A) and B)

Question 2

Which of the following will happen if the accrual adjustment entry is not made to record expenses incurred but not yet recorded?

Accepted Answer

A)  Both expenses and liabilities will be overstated.
B)  Both expenses and liabilities will be understated.
C)  Expenses will be understated and liabilities will be overstated.
D)  Expenses will be overstated and liabilities will be understated.E) A) and D)
F) None of the above

Question 3

Which of the following accounts would be classified as a current liability?

Accepted Answer

A)  Dividends declared.
B)  Unearned revenue.
C)  Wages expense.
D)  Accounts receivable.E) A) and C)
F) None of the above

Question 4

Which of the following errors cause net income to be understated?

Accepted Answer

A)  Employee wages that have not been paid are not recorded.
B)  Depreciation expense is not recorded.
C)  Collection of accounts receivable is not recorded.
D)  Revenue that has been earned but not yet collected has not been recorded.E) All of the above
F) C) and D)

Question 5

Unearned insurance premiums were $5,500 at the beginning of the year and $7,500 at the end of the year.Insurance premiums collected were $42,000.How much in insurance premiums were earned this year?

Accepted Answer

A)  $40,000
B)  $44,000
C)  $55,000
D)  $29,000E) B) and D)
F) None of the above

Question 6

A company owes rent at a rate of $6,000 per month.The company pays the rent owed on the tenth of each month for the previous month.At the end of each month,what kind of adjustment is required?

Accepted Answer

A)  An accrual adjustment.
B)  A closing adjustment.
C)  A deferral adjustment.
D)  No adjustment.E) A) and B)
F) A) and C)

Question 7

Accumulated depreciation:

Accepted Answer

A)  is an expense account.
B)  is a liability account.
C)  is an asset account.
D)  is a contra-asset account.E) A) and B)
F) A) and C)

Question 8

The first financial statement prepared after the adjusted trial balance is:

Accepted Answer

A)  the balance sheet.
B)  the income statement.
C)  the statement of cash flows.
D)  the statement of retained earnings.E) A) and B)
F) A) and C)

Question 9

What is the amount of insurance expense that would be reported on the income statement for the year ended December 31,2014?

Accepted Answer

A)  $4,000
B)  $18,000
C)  $6,000
D)  $2,000E) None of the above
F) A) and B)

Question 10

On December 31,2014,Purrfect Pets had retained earnings of $267,800 before making its closing entries.During 2014,the company had service revenue of $168,100 and other revenue of $81,300.The company used supplies (mainly cat food and litter)during the year which cost $87,900.Administrative expenses were $16,400 and wages (paid in cash)were $18,300.Taxes were $13,700 and dividends declared and paid totaled $6,000.
Prepare T-accounts for the income statement accounts,dividends declared,and retained earnings at the end of the year before closing.Then,enter the closing journal entries in the T-accounts and compute the ending balances of the T-accounts.

Accepted Answer

CJE = Clos...

Question 11

Which of the following statements is true?

Accepted Answer

A)  Retained earnings is a permanent account,while income statement accounts are temporary.
B)  Retained earnings and income statement accounts are all temporary accounts.
C)  Retained earnings and income statement accounts are all permanent accounts.
D)  Retained earnings is a temporary account,while income statement accounts are permanent accounts.E) A) and B)
F) B) and C)

Question 12

The book value of equipment is equal to which of the following?

Accepted Answer

A)  Cost of equipment plus accumulated depreciation.
B)  Accumulated depreciation less depreciation expense.
C)  Cost of equipment less accumulated depreciation.
D)  Accumulated depreciation plus depreciation expense.E) A) and D)
F) All of the above

Question 13

A company forgot to make an adjusting entry to record wages incurred but unpaid at the end of the period.This would understate Total Liabilities and overstate Retained Earnings on the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 14

Accrued salaries at 12/31/13 are $2,000.The adjusting entry would include

Accepted Answer

A)  a debit to salaries payable for $2,000.
B)  a debit to salaries expense for $28,000.
C)  a credit to salaries payable for $2,000.
D)  a credit to salaries expense for $28,000.E) A) and C)
F) B) and D)

Question 15

Assuming 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 be adjusted to 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.E) B) and C)
F) B) and D)

Question 16

Contra-accounts:

Accepted Answer

A)  are used to increase the original value of the account they offset.
B)  always appear in the same column of the trial balance as the account they offset.
C)  are used to decrease the original value of the account they offset.
D)  reduce the asset to its fair value.E) B) and D)
F) B) and C)

Question 17

Which of the following is performed first at the end of each accounting period?

Accepted Answer

A)  Prepare adjusting entries.
B)  Prepare a post closing trial balance.
C)  Prepare closing journal entries.
D)  Prepare the statement of retained earnings.E) B) and C)
F) A) and C)

Question 18

After posting the closing entries,all the revenue accounts and all the expense accounts are zero and the Retained Earnings account has been debited for $4,000.This implies that the company had a net income of $4,000.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following actions would not be considered unethical?

Accepted Answer

A)  Overstating the cost of machinery purchased in 2014.
B)  Prepaying 2014 expenses in 2013.
C)  Deferring 2014 expenses to 2015 and accruing revenues in 2014 that don't exist.
D)  Recording 2014 revenue as unearned revenue.E) A) and B)
F) A) and C)

Question 20

Accrual adjustments involve:

Accepted Answer

A)  increasing assets and revenues or increasing liabilities and expenses moving in the same direction.
B)  increasing assets and expenses or increasing liabilities and revenues.
C)  increasing assets and decreasing revenues or increasing liabilities and decreasing expenses.
D)  increasing assets and decreasing expenses or increasing liabilities and decreasing revenues.E) A) and C)
F) B) and D)

Exam 4: Adjustments, Financial Statements, and Financial Results

Accumulated depreciation:

Correct Answer
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Which of the following accounts would be classified as a current liability?

Correct Answer
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After posting the closing entries,all the revenue accounts and all the expense accounts are zero and the Retained Earnings account has been debited for $4,000.This implies that the company had a net income of $4,000.

Correct Answer
verified

Which of the following actions would not be considered unethical?

Correct Answer
verified

Which of the following errors cause net income to be understated?

Correct Answer
verified

Three-fifths (60%) of the amount recorded as unearned revenue remains unearned as of 12/31/13.The adjusting entry would include

Correct Answer
verified

A company forgot to make an adjusting entry to record wages incurred but unpaid at the end of the period.This would understate Total Liabilities and overstate Retained Earnings on the Balance Sheet.

Correct Answer
verified

A company owes rent at a rate of $6,000 per month.The company pays the rent owed on the tenth of each month for the previous month.At the end of each month,what kind of adjustment is required?

Correct Answer
verified

Accrued salaries at 12/31/13 are $2,000.The adjusting entry would include

Correct Answer
verified

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

Correct Answer
verified

Contra-accounts:

Correct Answer
verified

Unearned insurance premiums were $5,500 at the beginning of the year and $7,500 at the end of the year.Insurance premiums collected were $42,000.How much in insurance premiums were earned this year?

Correct Answer
verified

Correct Answer
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CJE = Clos...
View Answer

What is the amount of insurance expense that would be reported on the income statement for the year ended December 31,2014?

Correct Answer
verified

Which of the following will happen if the accrual adjustment entry is not made to record expenses incurred but not yet recorded?

Correct Answer
verified

The first financial statement prepared after the adjusted trial balance is:

Correct Answer
verified

Accrual adjustments involve:

Correct Answer
verified

Which of the following is performed first at the end of each accounting period?

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

The book value of equipment is equal to which of the following?

Correct Answer
verified

Exam 4: Adjustments, Financial Statements, and Financial Results

Accumulated depreciation:

Correct AnswerverifiedShow Answer

Which of the following accounts would be classified as a current liability?

Correct AnswerverifiedShow Answer

After posting the closing entries,all the revenue accounts and all the expense accounts are zero and the Retained Earnings account has been debited for $4,000.This implies that the company had a net income of $4,000.

Correct AnswerverifiedShow Answer

Which of the following actions would not be considered unethical?

Correct AnswerverifiedShow Answer

Which of the following errors cause net income to be understated?

Correct AnswerverifiedShow Answer

Three-fifths (60%) of the amount recorded as unearned revenue remains unearned as of 12/31/13.The adjusting entry would include

Correct AnswerverifiedShow Answer

A company forgot to make an adjusting entry to record wages incurred but unpaid at the end of the period.This would understate Total Liabilities and overstate Retained Earnings on the Balance Sheet.

Correct AnswerverifiedShow Answer

A company owes rent at a rate of $6,000 per month.The company pays the rent owed on the tenth of each month for the previous month.At the end of each month,what kind of adjustment is required?

Correct AnswerverifiedShow Answer

Accrued salaries at 12/31/13 are $2,000.The adjusting entry would include

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Contra-accounts:

Correct AnswerverifiedShow Answer

Unearned insurance premiums were $5,500 at the beginning of the year and $7,500 at the end of the year.Insurance premiums collected were $42,000.How much in insurance premiums were earned this year?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCJE = Clos...View AnswerShow Answer

What is the amount of insurance expense that would be reported on the income statement for the year ended December 31,2014?

Correct AnswerverifiedShow Answer

Which of the following will happen if the accrual adjustment entry is not made to record expenses incurred but not yet recorded?

Correct AnswerverifiedShow Answer

The first financial statement prepared after the adjusted trial balance is:

Correct AnswerverifiedShow Answer

Accrual adjustments involve:

Correct AnswerverifiedShow Answer

Which of the following is performed first at the end of each accounting period?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

The book value of equipment is equal to which of the following?

Correct AnswerverifiedShow Answer

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CJE = Clos...
View Answer

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