Question 1

Depreciation expense is an example of an accrued expense.

Accepted Answer

A) True 
 B)False

Question 2

Kader Co. paid 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 $35,000F) A) and B)
G) C) and E)

Question 3

A(n) _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Accepted Answer

Unadjusted...

Question 4

A company recorded 2 days of accrued salaries of $1,400 for its employees on January 31. On February 9, it paid its employees for these accrued salaries and for other salaries earned through February 9. The January 31 and February 9 journal entries are:

Accepted Answer

A)   1/31 Salaries Expense 1,400 Salaries Payable 1,4002/9 Salaries Payable 7,000 Salaries Expense 1,400 Cash 7,000\begin{array} { | l | l | r | r | } \hline 1 / 31 & 	ext { Salaries Expense } & 1,400 & \\hline & 	ext { Salaries Payable } & & 1,400 \\hline 2 / 9 & 	ext { Salaries Payable } & 7,000 & \\hline & 	ext { Salaries Expense } & 1,400 & \\hline & 	ext { Cash } & & 7,000 \\hline\end{array}1/312/9​ Salaries Expense  Salaries Payable  Salaries Payable  Salaries Expense  Cash ​1,4007,0001,400​1,4007,000​​ 
B)   1/31 Salaries Payable 1,400 Salaries Expense 1,4002/9 Salaries Expense 5,600 Salaries Payable 1,400 Cash 7,000\begin{array} { | l | l | r | r | } \hline 1 / 31 & 	ext { Salaries Payable } & 1,400 & \\hline & 	ext { Salaries Expense } & & 1,400 \\hline 2 / 9 & 	ext { Salaries Expense } & 5,600 & \\hline & 	ext { Salaries Payable } & 1,400 & \\hline & 	ext { Cash } & & 7,000 \\hline\end{array}1/312/9​ Salaries Payable  Salaries Expense  Salaries Expense  Salaries Payable  Cash ​1,4005,6001,400​1,4007,000​​ 
C)   1/31 Salaries Expense 1,400 Cash 1,4002/9 Salaries Expense 7,000 Cash 7,000\begin{array} { | c | c | r | r | } \hline 1 / 31 & 	ext { Salaries Expense } & 1,400 & \\hline & 	ext { Cash } & & 1,400 \\hline 2 / 9 & 	ext { Salaries Expense } & 7,000 & \\hline & 	ext { Cash } & & 7,000 \\hline\end{array}1/312/9​ Salaries Expense  Cash  Salaries Expense  Cash ​1,4007,000​1,4007,000​​ 
D)   1/31 Salaries Expense 1,400 Salaries Payable 1,4002/9 Salaries Expense 7,000 Cash 7,000\begin{array} { | c | c | r | r | } \hline 1 / 31 & 	ext { Salaries Expense } & 1,400 & \\hline & 	ext { Salaries Payable } & & 1,400 \\hline 2 / 9 & 	ext { Salaries Expense } & 7,000 & \\hline & 	ext { Cash } & & 7,000 \\hline\end{array}1/312/9​ Salaries Expense  Salaries Payable  Salaries Expense  Cash ​1,4007,000​1,4007,000​​ 
E)   1/31 Salaries Expense 1,400 Salaries Payable 1,4002/9 Salaries Expense 5,600 Salaries Payable 1,400 Cash 7,000\begin{array} { | l | l | r | r | } \hline 1 / 31 & 	ext { Salaries Expense } & 1,400 & \\hline & 	ext { Salaries Payable } & & 1,400 \\hline 2 / 9 & 	ext { Salaries Expense } & 5,600 & \\hline & 	ext { Salaries Payable } & 1,400 & \\hline & 	ext { Cash } & & 7,000 \\hline\end{array}1/312/9​ Salaries Expense  Salaries Payable  Salaries Expense  Salaries Payable  Cash ​1,4005,6001,400​1,4007,000​​F) B) and D)
G) A) and C)

Question 5

The main purpose of adjusting entries is to:

Accepted Answer

A)   Record external transactions and events
B)   Record internal transactions and events
C)   Recognize assets purchased during the period
D)   Recognize debts paid during the period
E)   Correct errorsF) C) and D)
G) B) and E)

Question 6

When expenses exceed revenues, there is a net loss and the Income Summary account would have a credit balance.

Accepted Answer

A) True 
 B)False

Question 7

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets is called:

Accepted Answer

A)   Accumulated depreciation
B)   A contra account
C)   The matching principle
D)   Depreciation
E)   An accrued accountF) C) and E)
G) C) and D)

Question 8

The Income Summary account is used:

Accepted Answer

A)   To adjust and update asset and liability accounts
B)   To close the revenue and expense accounts
C)   To determine the appropriate dividend amount
D)   In some situations to replace the income statement
E)   To replace the retained earnings account in some businessesF) A) and B)
G) B) and E)

Question 9

Earned but uncollected revenues that are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account are referred to as accrued expenses.

Accepted Answer

A) True 
 B)False

Question 10

The accounting principle that requires revenue to be reported when earned is the:

Accepted Answer

A)   Matching principle
B)   Revenue recognition principle
C)   Time period principle
D)   Accrual reporting principle
E)   Going-concern principleF) None of the above
G) C) and E)

Exam 3: Adjusting Accounts and Preparing Financial Statements

The accounting principle that requires revenue to be reported when earned is the:

Correct Answer
verified

A company recorded 2 days of accrued salaries of $1,400 for its employees on January 31. On February 9, it paid its employees for these accrued salaries and for other salaries earned through February 9. The January 31 and February 9 journal entries are:

Correct Answer
verified

When expenses exceed revenues, there is a net loss and the Income Summary account would have a credit balance.

Correct Answer
verified

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets is called:

Correct Answer
verified

The main purpose of adjusting entries is to:

Correct Answer
verified

Kader Co. paid a total of $35,000 in dividends during the current year. The entry needed to close the dividends account is:

Correct Answer
verified

A(n) _______________________ 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

Earned but uncollected revenues that are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account are referred to as accrued expenses.

Correct Answer
verified

Depreciation expense is an example of an accrued expense.

Correct Answer
verified

The Income Summary account is used:

Correct Answer
verified

Exam 3: Adjusting Accounts and Preparing Financial Statements

The accounting principle that requires revenue to be reported when earned is the:

Correct AnswerverifiedShow Answer

A company recorded 2 days of accrued salaries of $1,400 for its employees on January 31. On February 9, it paid its employees for these accrued salaries and for other salaries earned through February 9. The January 31 and February 9 journal entries are:

Correct AnswerverifiedShow Answer

When expenses exceed revenues, there is a net loss and the Income Summary account would have a credit balance.

Correct AnswerverifiedShow Answer

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets is called:

Correct AnswerverifiedShow Answer

The main purpose of adjusting entries is to:

Correct AnswerverifiedShow Answer

Kader Co. paid a total of $35,000 in dividends during the current year. The entry needed to close the dividends account is:

Correct AnswerverifiedShow Answer

A(n) _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Correct AnswerverifiedUnadjusted...View AnswerShow Answer

Earned but uncollected revenues that are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account are referred to as accrued expenses.

Correct AnswerverifiedShow Answer

Depreciation expense is an example of an accrued expense.

Correct AnswerverifiedShow Answer

The Income Summary account is used:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Unadjusted...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified