Question 1

On the balance sheet,accumulated depreciation is:

Accepted Answer

A)  added to property and equipment.
B)  subtracted from property and equipment.
C)  added to total liabilities.
D)  subtracted from total liabilities.E) None of the above
F) B) and D)

Question 2

An error is indicated if the following account appears on the post-closing trial balance with a positive balance.

Accepted Answer

A)  Office equipment.
B)  Contributed capital.
C)  Accumulated depreciation.
D)  Depreciation expense.E) B) and C)
F) C) and D)

Question 3

A company had calculated net income to be $77,550 based on the unadjusted trial balance.The following adjusting entries were then made: Salaries payable of $790 was recorded;Interest earned but not received from investments $750;Prepaid insurance decreased by $550 for insurance used up during the period;$750 of Unearned revenue has now been earned.After recording these adjustments,net income would be:

Accepted Answer

A)  $77,710.
B)  $74,710.
C)  $77,310.
D)  $79,600.E) A) and D)
F) None of the above

Question 4

As a company uses supplies,an adjustment should be made to decrease an asset account and increase an expense account.

Accepted Answer

A) True 
 B)False

Question 5

After adjusting entries are prepared and posted,but before closing entries are prepared and posted,the balance in retained earnings is equal to

Accepted Answer

A)  zero.
B)  the difference between total assets and total liabilities.
C)  the amount that is to be reported in the current year's balance sheet.
D)  the amount that was reported on the previous year's balance sheet.E) B) and C)
F) C) and D)

Question 6

The company's unadjusted trial balance includes the following account balances:  The following data are available to determine adjusting entries:
A)$4,350 of prepaid insurance expired during the period.
B)The company estimates depreciation expense of $8,150 for the period.
C)A count showed $85,700 of supplies on hand.
D)Interest earned and receivable on the outstanding notes receivable is $260 for the period.
E)Performed services,$5,600,for which customers had previously paid in advance.
F)Performed services,$2,000,not yet billed or recorded.
Prepare the adjusting entries that should be recorded.Then,prepare an adjusted trial balance using the blank columns to the right of the unadjusted trial balance.

Accepted Answer

The answer of The company's unadjusted trial balance includes the...

Question 7

Which of the following statements about an adjusted trial balance is true?

Accepted Answer

A)  Debits should equal credits both before and after adjustments are made.
B)  Debits will equal credits after adjustments are made but not necessarily before.
C)  Debits will equal credits before adjustments are made but not necessarily after.
D)  Debits do not have to equal credits in the adjusted trial balance but they must be equal in the post-closing trial balance.E) B) and C)
F) A) and B)

Question 8

Which of the following statements regarding adjusting entries is not true?

Accepted Answer

A)  Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period.
B)  Adjustments help to ensure the related accounts on the balance sheet and income statement are up to date and complete.
C)  Adjusting entries often affect the cash account.
D)  Adjusting entries generally include one balance sheet and one income statement account.E) None of the above
F) C) and D)

Question 9

Which of these accounts would normally not be affected by an adjustment?

Accepted Answer

A)  Supplies.
B)  Revenues.
C)  Expenses.
D)  Cash.E) C) and D)
F) A) and B)

Question 10

If an expense has been incurred but will be paid later,then:

Accepted Answer

A)  nothing is recorded on the financial statements.
B)  a liability account is created or increased and an expense is recorded.
C)  an asset account is decreased or eliminated and an expense is recorded.
D)  a revenue and an expense are accrued.E) None of the above
F) All of the above

Question 11

Purrfect Pets has made all the year-end adjustments.Its expense accounts total $130,000,and its revenue accounts total $190,000.The closing entry to close the income statement accounts for the year will:

Accepted Answer

A)  debit its various expense accounts for a total of $130,000,debit retained earnings for $60,000,and credit its various revenue accounts for a total of $190,000.
B)  debit its various revenue accounts for a total of $190,000,credit its various expense accounts for a total of $130,000,and credit retained earnings for $60,000.
C)  debit its various expense accounts for a total of $130,000,credit its various revenue accounts for a total of $190,000,and credit retained earnings for $60,000.
D)  debit its various revenue accounts for a total of $190,000,debit retained earnings for $60,000,and credit its various expense accounts for a total of $130,000.E) A) and C)
F) All of the above

Question 12

A company makes a deferral adjustment that reduces a liability.This must mean:

Accepted Answer

A)  an expense account is decreasing by the same amount.
B)  an expense account is increasing by the same amount.
C)  a revenue account is increasing by the same amount.
D)  a revenue account is decreasing.E) C) and D)
F) A) and B)

Question 13

A company started the year with $1,500 of supplies on hand.During the year the company purchased additional supplies of $800 and recorded them as increase to the supplies asset.At the end of the year the company determined that only $300 of supplies are still on hand.What is the adjusting journal entry to be made at the end of the period?

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option DE) B) and C)
F) A) and D)

Question 14

The December 31,2013,adjusted trial balance of a company,where all accounts have normal balances is:  Given this information,after all closing entries are made,the balance in the retained earnings account is:

Accepted Answer

A)  $2,000.
B)  $4,000.
C)  $0.
D)  $1,500.E) B) and D)
F) None of the above

Question 15

Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Accepted Answer

A)  Assets will be understated and revenues will be overstated.
B)  Revenues will be understated and assets will be overstated.
C)  Both revenues and assets will be overstated.
D)  Both revenues and assets will be understated.E) B) and D)
F) B) and C)

Question 16

The adjusted trial balance is completed to check that debits still equal credits after the income statement is prepared.

Accepted Answer

A) True 
 B)False

Question 17

On December 31,2013,interest of $500 is owed on a bank loan that will not be paid until June 30,2014.What is the necessary adjusting journal entry on December 31,2013?

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option DE) None of the above
F) All of the above

Question 18

Which of the following statements is not true?

Accepted Answer

A)  Net income implies that revenues are greater than expenses.
B)  A net loss causes retained earnings to decrease.
C)  Net income causes stockholders' equity to increase.
D)  A net loss prevents a company from declaring dividends.E) B) and C)
F) None of the above

Question 19

Purrfect Pets had income before income tax of $164,000 last quarter and a 34% tax rate.Its net income should be reported as:

Accepted Answer

A)  $55,760.
B)  $108,240.
C)  $219,760.
D)  $482,353.E) A) and B)
F) B) and D)

Question 20

A company declared and paid a dividend of $8,000 this year.The entry to close the dividend account at the end of the year is:

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option DE) A) and D)
F) C) and D)

Exam 4: Adjustments, Financial Statements, and Financial Results

Which of the following statements about an adjusted trial balance is true?

Correct Answer
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Purrfect Pets had income before income tax of $164,000 last quarter and a 34% tax rate.Its net income should be reported as:

Correct Answer
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Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Correct Answer
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On December 31,2013,interest of $500 is owed on a bank loan that will not be paid until June 30,2014.What is the necessary adjusting journal entry on December 31,2013?

Correct Answer
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Correct Answer
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After adjusting entries are prepared and posted,but before closing entries are prepared and posted,the balance in retained earnings is equal to

Correct Answer
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Correct Answer
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A company makes a deferral adjustment that reduces a liability.This must mean:

Correct Answer
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If an expense has been incurred but will be paid later,then:

Correct Answer
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Which of the following statements is not true?

Correct Answer
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As a company uses supplies,an adjustment should be made to decrease an asset account and increase an expense account.

Correct Answer
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Which of these accounts would normally not be affected by an adjustment?

Correct Answer
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Correct Answer
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Purrfect Pets has made all the year-end adjustments.Its expense accounts total $130,000,and its revenue accounts total $190,000.The closing entry to close the income statement accounts for the year will:

Correct Answer
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The adjusted trial balance is completed to check that debits still equal credits after the income statement is prepared.

Correct Answer
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A company declared and paid a dividend of $8,000 this year.The entry to close the dividend account at the end of the year is:

Correct Answer
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An error is indicated if the following account appears on the post-closing trial balance with a positive balance.

Correct Answer
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The December 31,2013,adjusted trial balance of a company,where all accounts have normal balances is: Given this information,after all closing entries are made,the balance in the retained earnings account is:

Correct Answer
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On the balance sheet,accumulated depreciation is:

Correct Answer
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Which of the following statements regarding adjusting entries is not true?

Correct Answer
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Exam 4: Adjustments, Financial Statements, and Financial Results

Which of the following statements about an adjusted trial balance is true?

Correct AnswerverifiedShow Answer

Purrfect Pets had income before income tax of $164,000 last quarter and a 34% tax rate.Its net income should be reported as:

Correct AnswerverifiedShow Answer

Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Correct AnswerverifiedShow Answer

On December 31,2013,interest of $500 is owed on a bank loan that will not be paid until June 30,2014.What is the necessary adjusting journal entry on December 31,2013?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

After adjusting entries are prepared and posted,but before closing entries are prepared and posted,the balance in retained earnings is equal to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company makes a deferral adjustment that reduces a liability.This must mean:

Correct AnswerverifiedShow Answer

If an expense has been incurred but will be paid later,then:

Correct AnswerverifiedShow Answer

Which of the following statements is not true?

Correct AnswerverifiedShow Answer

As a company uses supplies,an adjustment should be made to decrease an asset account and increase an expense account.

Correct AnswerverifiedShow Answer

Which of these accounts would normally not be affected by an adjustment?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Purrfect Pets has made all the year-end adjustments.Its expense accounts total $130,000,and its revenue accounts total $190,000.The closing entry to close the income statement accounts for the year will:

Correct AnswerverifiedShow Answer

The adjusted trial balance is completed to check that debits still equal credits after the income statement is prepared.

Correct AnswerverifiedShow Answer

A company declared and paid a dividend of $8,000 this year.The entry to close the dividend account at the end of the year is:

Correct AnswerverifiedShow Answer

An error is indicated if the following account appears on the post-closing trial balance with a positive balance.

Correct AnswerverifiedShow Answer

The December 31,2013,adjusted trial balance of a company,where all accounts have normal balances is: Given this information,after all closing entries are made,the balance in the retained earnings account is:

Correct AnswerverifiedShow Answer

On the balance sheet,accumulated depreciation is:

Correct AnswerverifiedShow Answer

Which of the following statements regarding adjusting entries is not true?

Correct AnswerverifiedShow Answer

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