Question 1

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Accepted Answer

A)   historical cost
B)   contra asset
C)   book value
D)   market valueE) A) and B)
F) None of the above

Question 2

An adjusting entry to accrue an incurred expense will affect total liabilities.

Accepted Answer

A) True 
 B)False

Question 3

The account type and normal balance of Unearned Revenue is

Accepted Answer

A)   revenue, credit
B)   expense, debit
C)   liability, credit
D)   asset, debitE) A) and B)
F) A) and C)

Question 4

The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable. This error will be detected when the Adjusted Trial Balance is prepared.

Accepted Answer

A) True 
 B)False

Question 5

On January 2nd, Dog Mart prepaid $30,000 rent for the year and recorded the prepayment in an asset account. Prepare the January 31st adjusting entry for rent expense.

Accepted Answer

The answer of On January 2nd, Dog Mart prepaid $30,000...

Question 6

A fixed asset's market value is reflected in the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 7

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Accepted Answer

A) True 
 B)False  False

Question 8

The adjusting entry to record the depreciation of equipment for the fiscal period is

Accepted Answer

A)   debit Depreciation Expense; credit Equipment
B)   debit Depreciation Expense; credit Accumulated Depreciation
C)   debit Accumulated Depreciation; credit Depreciation Expense
D)   debit Equipment; credit Depreciation ExpenseE) A) and D)
F) All of the above

Question 9

One of the accounting concepts upon which deferrals and accruals are based is

Accepted Answer

A)   matching
B)   cost
C)   price-level adjustment
D)   conservatismE) A) and B)
F) A) and C)

Question 10

The supplies account has a balance of $2,100 at the beginning of the year and was debited during the year for $2,300, representing the total of supplies purchased during the year. If $400 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is

Accepted Answer

A)   $400
B)   $200
C)   $4,800
D)   $4,000E) None of the above
F) A) and C) D

Question 11

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

Accepted Answer

A)   $56,700
B)   $58,000
C)   $55,800
D)   $54,500E) None of the above
F) B) and D)

Question 12

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

Accepted Answer

A)   expense
B)   asset
C)   contra asset
D)   liabilityE) A) and B)
F) A) and C)

Question 13

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

Accepted Answer

A)   $18,000
B)   $90,000
C)   $54,000
D)   $36,000E) A) and B)
F) B) and C)

Question 14

A company depreciates its equipment $500 a year. The adjusting entry for December 31 is credit Depreciation Expense, $500 and debit Equipment, $500.

Accepted Answer

A) True 
 B)False

Question 15

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

Accepted Answer

A)   expenses understated and therefore net income overstated
B)   revenues understated and therefore net income understated
C)   expenses understated and therefore net income understated
D)   expenses overstated and therefore net income understatedE) A) and C)
F) B) and C)

Question 16

Prior to the adjusting process, accrued expenses have

Accepted Answer

A)   not yet been incurred, paid, or recorded
B)   been incurred, not paid, but have been recorded
C)   been incurred, not paid, and not recorded
D)   been paid but have not yet been incurredE) None of the above
F) C) and D)

Question 17

Accumulated Depreciation accounts are liability accounts.

Accepted Answer

A) True 
 B)False

Question 18

Adjusting entries are

Accepted Answer

A)   the same as correcting entries
B)   needed to bring accounts up to date and match revenue and expense
C)   optional under generally accepted accounting principles
D)   rarely needed in large companiesE) B) and C)
F) C) and D)

Question 19

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

Accepted Answer

A)   records revenues when they are earned and expenses when they are paid
B)   records revenues and expenses when they are incurred.
C)   records revenues when cash is received and expenses when they are incurred.
D)   records revenues and expenses when the company needs to apply for a loan.E) A) and B)
F) None of the above B

Question 20

The entry to adjust the accounts for wages accrued at the end of the accounting period is

Accepted Answer

A)   debit Wages Payable; credit Wages Income
B)   debit Wages Income; credit Wages Payable
C)   debit Wages Payable; credit Wages Expense
D)   debit Wages Expense; credit Wages PayableE) All of the above
F) C) and D)

Exam 3: The Adjusting Process

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Correct Answer
verified

An adjusting entry to accrue an incurred expense will affect total liabilities.

Correct Answer
verified

The account type and normal balance of Unearned Revenue is

Correct Answer
verified

The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable. This error will be detected when the Adjusted Trial Balance is prepared.

Correct Answer
verified

On January 2nd, Dog Mart prepaid $30,000 rent for the year and recorded the prepayment in an asset account. Prepare the January 31st adjusting entry for rent expense.

Correct Answer
verified

A fixed asset's market value is reflected in the Balance Sheet.

Correct Answer
verified

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Correct Answer
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False

The adjusting entry to record the depreciation of equipment for the fiscal period is

Correct Answer
verified

One of the accounting concepts upon which deferrals and accruals are based is

Correct Answer
verified

Correct Answer
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D

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

Correct Answer
verified

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

Correct Answer
verified

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

Correct Answer
verified

A company depreciates its equipment $500 a year. The adjusting entry for December 31 is credit Depreciation Expense, $500 and debit Equipment, $500.

Correct Answer
verified

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

Correct Answer
verified

Prior to the adjusting process, accrued expenses have

Correct Answer
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Accumulated Depreciation accounts are liability accounts.

Correct Answer
verified

Adjusting entries are

Correct Answer
verified

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

Correct Answer
verified
B

The entry to adjust the accounts for wages accrued at the end of the accounting period is

Correct Answer
verified

Exam 3: The Adjusting Process

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Correct AnswerverifiedShow Answer

An adjusting entry to accrue an incurred expense will affect total liabilities.

Correct AnswerverifiedShow Answer

The account type and normal balance of Unearned Revenue is

Correct AnswerverifiedShow Answer

The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable. This error will be detected when the Adjusted Trial Balance is prepared.

Correct AnswerverifiedShow Answer

On January 2nd, Dog Mart prepaid $30,000 rent for the year and recorded the prepayment in an asset account. Prepare the January 31st adjusting entry for rent expense.

Correct AnswerverifiedShow Answer

A fixed asset's market value is reflected in the Balance Sheet.

Correct AnswerverifiedShow Answer

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Correct AnswerverifiedFalse

The adjusting entry to record the depreciation of equipment for the fiscal period is

Correct AnswerverifiedShow Answer

One of the accounting concepts upon which deferrals and accruals are based is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

Correct AnswerverifiedShow Answer

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

Correct AnswerverifiedShow Answer

The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is

Correct AnswerverifiedShow Answer

A company depreciates its equipment $500 a year. The adjusting entry for December 31 is credit Depreciation Expense, $500 and debit Equipment, $500.

Correct AnswerverifiedShow Answer

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

Correct AnswerverifiedShow Answer

Prior to the adjusting process, accrued expenses have

Correct AnswerverifiedShow Answer

Accumulated Depreciation accounts are liability accounts.

Correct AnswerverifiedShow Answer

Adjusting entries are

Correct AnswerverifiedShow Answer

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

Correct AnswerverifiedB

The entry to adjust the accounts for wages accrued at the end of the accounting period is

Correct AnswerverifiedShow Answer

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False

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D

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B

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