Question 1

Explain how accounting adjustments affect financial statements.

Accepted Answer

Without accounting adjustments many acco...

Question 2

The account form of the balance sheet matches the accounting equation.That is,assets are on the left side of the statement and liabilities and equity are on the right side of the statement.

Accepted Answer

A) True 
 B)False

Question 3

Match the following terms with the appropriate definition.
-     Time period principle

Accepted Answer

A)   The expense created by allocating the cost of plant and equipment to the periods in which they are used 
B)   The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses 
C)   Items paid for in advance of receiving their benefits 
D)   Allocates equal amounts of an asset's cost (less any salvage value)  to depreciation expense during its useful life 
E)   The accounting system that recognizes revenues when earned and expenses when incurred F)  A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years G)  Revenues earned in a period that are both unrecorded and not yet received in cash or other assets H)  Net income divided by net sales I)  The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid J) B) and G)
K) D) and G)

Question 4

Shown below are a company's ledger accounts and their end-of-period balances before closing entries are posted.What amount will be posted to Retained Earnings in the process of closing the Income Summary account? (Assume all accounts have normal balances.) 
  Retained earnings $14,000 Dividends 19,200 Sales Revenue 58,000 Rent expense 7,200 Salaries expense 14,400 Insurance expense 840 Depr. Expense - equipment 900 Accum depr. - equipment 2,500\begin{array}{|l|r|}\hline 	ext { Retained earnings } & \$ 14,000 \\hline 	ext { Dividends } & 19,200 \\hline 	ext { Sales Revenue } & 58,000 \\hline 	ext { Rent expense } & 7,200 \\hline 	ext { Salaries expense } & 14,400 \\hline 	ext { Insurance expense } & 840 \\hline 	ext { Depr. Expense - equipment } & 900 \\hline 	ext { Accum depr. - equipment } & 2,500\\hline\end{array} Retained earnings  Dividends  Sales Revenue  Rent expense  Salaries expense  Insurance expense  Depr. Expense - equipment  Accum depr. - equipment ​$14,00019,20058,0007,20014,4008409002,500​​

Accepted Answer

A)  $16,780 debit
B)  $15,460 credit
C)  $48,660 credit
D)  $34,660 credit
E)  $17,960 credit F) C) and D)
G) B) and E)

Question 5

A trial balance prepared after the closing entries have been journalized and posted is the:

Accepted Answer

A)  Unadjusted trial balance
B)  Post-closing trial balance
C)  General ledger
D)  Adjusted trial balance
E)  Work sheetF) A) and C)
G) C) and D)

Question 6

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following:
Office supplies used during the period,$1,200.
Expiration of prepaid rent,$700.
Accrued salaries expense,$500.
Depreciation expense,$800.
Accrued service fees receivable,$400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A)  $80,400
B)  $84,000
C)  $85,700
D)  $85,900
E)  $87,600F) C) and D)
G) All of the above

Question 7

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) B) and C)
G) C) and D)

Question 8

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Accepted Answer

The answer of ______________________ are required at the end of...

Question 9

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery.
  
* $2,000 of the long-term note payable is due during the next year.

Accepted Answer

*Net income = $145,000 - $8,0...

Question 10

All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet,including the net income or net loss.

Accepted Answer

A) True 
 B)False

Question 11

Prepare an income statement from the adjusted trial balance of Hanson Storage.

Accepted Answer

The answer of Prepare an income statement from the adjusted...

Question 12

The matching principle requires that revenue not be assigned to the accounting period in which it is earned.

Accepted Answer

A) True 
 B)False

Question 13

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

Accepted Answer

A)  An expense amount entered in the Balance Sheet Debit column
B)  A revenue amount entered in the Balance Sheet Credit column
C)  An asset amount entered in the Income Statement Debit column
D)  A liability amount entered in the Income Statement Credit column
E)  An expense amount entered in the Balance Sheet Credit columnF) C) and E)
G) B) and D)

Question 14

Match between columns
                        Premises:  Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue, expense and dividends accounts to retained earnings
 Tangible long-lived assets used to produce or sell products or services
 A balance sheet that broadly groups assets, liabilities and equity items
 Long-term assets used to produce or sell products or services; these assets usually lack physical form and their benefits are uncertain
 Obligations that are due to be paid or settled within one year or the operating cycle of a business whichever is longer
 Cash or other assets that are expected to be sold, collected or used within one year or the company's operating cycle whichever is longer
 The owner's claim on the assets of a company
 A balance sheet that organizes the assets and liabilities into important subgroups
 A ratio that is used to help evaluate a company's ability to pay its short-term obligations, calculated by dividing current assets by current liabilities
 Assets such as notes receivable or investments in stocks which are held for the longer of one year or the operating cycle of the company

Accepted Answer

The Answer of Equity and Plant assets and Current assets is...

Question 15

Which of the following statements is incorrect?

Accepted Answer

A)  Prepaid expenses,depreciation and unearned revenues involve previously recorded assets and liabilities
B)  Accrued expenses and accrued revenues involve assets and liabilities that were not previously been recorded
C)  Adjusting entries can be used to record both accrued expenses and accrued revenues
D)  Prepaid expenses,depreciation and unearned revenues often require adjusting entries to record the effects of the passage of time
E)  Adjusting entries affect the cash accountF) A) and B)
G) A) and C)

Question 16

List the steps in the accounting cycle.

Accepted Answer

The accounting cycle consists of ten ste...

Question 17

Profit margin can also be called return on sales.

Accepted Answer

A) True 
 B)False

Question 18

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.
On June 30,2011 Apricot should record:

Accepted Answer

A)  A credit to an expense for $5,000
B)  A debit to an expense for $5,000
C)  A credit to a prepaid expense for $5,000
D)  A debit to a prepaid expense for $5,000
E)  A debit to Cash for $5,000F) A) and D)
G) B) and D)

Question 19

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet.Prepare the necessary closing entries.

Accepted Answer

None...

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 3: Adjusting Accounts and Preparing Financial Statements

Correct Answer
verified

Profit margin can also be called return on sales.

Correct Answer
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On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On June 30,2011 Apricot should record:

Correct Answer
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Explain how accounting adjustments affect financial statements.

Correct Answer
verified
Without accounting adjustments many acco...
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A trial balance prepared after the closing entries have been journalized and posted is the:

Correct Answer
verified

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Correct Answer
verified

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

Correct Answer
verified

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

Correct Answer
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Which of the following statements is incorrect?

Correct Answer
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Match each definition to its term

Correct Answer
verified

Prepare an income statement from the adjusted trial balance of Hanson Storage.

Correct Answer
verified

The account form of the balance sheet matches the accounting equation.That is,assets are on the left side of the statement and liabilities and equity are on the right side of the statement.

Correct Answer
verified

Match the following terms with the appropriate definition. - Time period principle

Correct Answer
verified

The matching principle requires that revenue not be assigned to the accounting period in which it is earned.

Correct Answer
verified

All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet,including the net income or net loss.

Correct Answer
verified

List the steps in the accounting cycle.

Correct Answer
verified
The accounting cycle consists of ten ste...
View Answer

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet.Prepare the necessary closing entries.

Correct Answer
verified
None...
View Answer

The main purpose of adjusting entries is to:

Correct Answer
verified

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

Correct Answer
verified

*Net income = $145,000 - $8,0...
View Answer

Exam 3: Adjusting Accounts and Preparing Financial Statements

Correct AnswerverifiedShow Answer

Profit margin can also be called return on sales.

Correct AnswerverifiedShow Answer

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On June 30,2011 Apricot should record:

Correct AnswerverifiedShow Answer

Explain how accounting adjustments affect financial statements.

Correct AnswerverifiedWithout accounting adjustments many acco...View AnswerShow Answer

A trial balance prepared after the closing entries have been journalized and posted is the:

Correct AnswerverifiedShow Answer

______________________ are required at the end of the accounting period because certain internal transactions and events remain unrecorded.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the Balance Sheet columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet Credit column,the cause could be:

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

Match each definition to its term

Correct AnswerverifiedShow Answer

Prepare an income statement from the adjusted trial balance of Hanson Storage.

Correct AnswerverifiedShow Answer

The account form of the balance sheet matches the accounting equation.That is,assets are on the left side of the statement and liabilities and equity are on the right side of the statement.

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition. - Time period principle

Correct AnswerverifiedShow Answer

The matching principle requires that revenue not be assigned to the accounting period in which it is earned.

Correct AnswerverifiedShow Answer

All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet,including the net income or net loss.

Correct AnswerverifiedShow Answer

List the steps in the accounting cycle.

Correct AnswerverifiedThe accounting cycle consists of ten ste...View AnswerShow Answer

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet.Prepare the necessary closing entries.

Correct AnswerverifiedNone...View AnswerShow Answer

The main purpose of adjusting entries is to:

Correct AnswerverifiedShow Answer

Based on the adjusted trial balance shown below,prepare a classified balance sheet for Focus Package Delivery. * $2,000 of the long-term note payable is due during the next year.

Correct Answerverified*Net income = $145,000 - $8,0...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Without accounting adjustments many acco...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The accounting cycle consists of ten ste...
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Correct Answer
verified
None...
View Answer

Correct Answer
verified

Correct Answer
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*Net income = $145,000 - $8,0...
View Answer