Question 1

Deferred Revenue,which represents the company's obligation to honor gift cards previously issued to customers,totaled $6,600 at the beginning of the year and $9,000 at the end of the year.Customers purchased gift cards amounting to $50,400 during the year.What was the amount of gift cards redeemed by customers during the year?

Accepted Answer

A)  $48,000
B)  $52,800
C)  $66,000
D)  $34,800E) A) and C)
F) All of the above

Question 2

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

Accepted Answer

A)  Salaries and Wages Payable will decrease by the amount of the unpaid wages.
B)  Salaries and Wages Expense will be recorded as a credit for the amount of the unpaid salaries and wages.
C)  Salaries and Wages Payable will be recorded as a debit for the amount of the unpaid salaries and wages.
D)  Salaries and Wages Expense will increase by the amount of the unpaid salaries and wages.E) B) and D)
F) B) and C) D

Question 3

At the end of the month,the adjusting journal entry to record the use of supplies would include a debit to:

Accepted Answer

A)  Supplies and a credit to Supplies Expense.
B)  Supplies Expense and a credit to Supplies.
C)  Supplies and a credit to Service Revenue.
D)  Supplies and a credit to Cash.E) C) and D)
F) B) and C)

Question 4

Adjusting entries often involve cash.

Accepted Answer

A) True 
 B)False  False

Question 5

Which of the following statements about net income and net losses is not correct?

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 increases the balance in Retained Earnings.E) A) and C)
F) A) and D)

Question 6

Match the term and its definition.There are more definitions than terms.
-Carrying Value

Accepted Answer

A)  Also known as balance sheet accounts.
B)  Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits.
C)  Lists the balances of all accounts to check that revenues equal expenses.
D)  The level of profit prior to considering income tax.
E)  An account that is paired with another account and acts to reduce its book value.F) Converts some of an asset's or a liability's book value into an expense or a revenue.G) An account that must have a zero balance after closing entries have been made.H) Adds new values into the balance sheet and income statement accounts.I) The amount at which an asset or liability is reported in the financial statements.J) Lists the balances of all permanent accounts to check that debits equal credits.K) A journal entry that transfers net income or loss to the Retained Earnings account.L) When revenue minus expenses is a negative number.M) Entries made to update existing accounts and record new events.N) C) and D)
O) A) and I)

Question 7

A closing entry includes a:

Accepted Answer

A)  debit to Sales Revenue.
B)  credit to Cash.
C)  credit to Accounts Receivable.
D)  debit to Interest Expense.E) C) and D)
F) A) and D)

Question 8

Parker,Inc.had a beginning balance in its Retained Earnings account of $192,800.During the year,the company declared and paid a $2,350 dividend and,at the end of the year,it reported Retained Earnings of $199,930.The company's net income for the year was:

Accepted Answer

A)  $7,130.
B)  $9,480.
C)  $4,780.
D)  $0.E) B) and D)
F) A) and B)

Question 9

Which of the following entries records the adjustment for revenue earned,but not yet collected?

Accepted Answer

A)  Debit Accounts Receivable and credit Sales Revenue.
B)  Debit Sales Revenue and credit Accounts Receivable.
C)  Debit Deferred Revenue and credit Sales Revenue.
D)  Debit Accounts Receivable and credit Deferred Revenue.E) A) and C)
F) All of the above

Question 10

One major difference between deferral and accrual adjustments is that:

Accepted Answer

A)  accrual adjustments affect income statement accounts,and deferral adjustments affect balance sheet accounts.
B)  deferral adjustments increase net income,and accrual adjustments decrease net income.
C)  deferral adjustments are made under the cash basis of accounting,and accrual adjustments are made under the accrual basis of accounting.
D)  accounts affected by an accrual adjustment always go in the same direction (i.e. ,both accounts are increased or both accounts are decrease
D)  ,and accounts affected by a deferral adjustment always go in opposite directions (one account is increased and one account is decrease
D)  .E) All of the above
F) B) and D)

Question 11

Match each transaction with the type of entry that will be required at April 30,the company's year-end.
-The company provides lawn care in April for customers who paid in March.

Accepted Answer

A)  Closing entry
B)  Deferral adjusting entry
C)  Accrual adjusting entryD) A) and B)
E) A) and C)

Question 12

At the beginning of its first year of operations,Bumper Corp.purchased $4,000 of supplies,which were debited to the Supplies account.They did not purchase any other supplies during the year.At the end of the year,it has $800 of supplies left.The appropriate adjusting journal entry is:

Accepted Answer

A)  Debit Supplies Expense $3,200 and credit Supplies $3,200.
B)  Debit Supplies $3,200 and credit Supplies Expense $3,200.
C)  Debit Supplies $800 and credit Supplies Expense $800.
D)  Debit Supplies Expense $800 and credit Supplies $800.E) None of the above
F) A) and C)

Question 13

Closing entries:

Accepted Answer

A)  are prepared before financial statements are prepared.
B)  reduce the number of permanent accounts.
C)  cause the revenue and expense accounts to have zero balances.
D)  summarize the activity in every account.E) B) and C)
F) B) and D)

Question 14

The closing process includes a transfer of the Dividends account balance to the Retained Earnings account.

Accepted Answer

A) True 
 B)False

Question 15

The asset,liability,and stockholders' equity accounts are referred to as permanent accounts.

Accepted Answer

A) True 
 B)False

Question 16

When a trial balance is prepared,a contra-account appears immediately:

Accepted Answer

A)  before the account it offsets but in the opposite column.
B)  after the account it offsets and in the same column.
C)  after the account it offsets but in the opposite column.
D)  before the account it offsets and in the same column.E) A) and D)
F) All of the above

Question 17

What are the effects on the accounting equation from the adjustment for revenue earned during the accounting period that had previously been recorded as a liability?

Accepted Answer

A)  Total liabilities will increase and total stockholders' equity will decrease.
B)  Total liabilities will increase and total stockholders' equity will increase.
C)  Total liabilities will decrease and total stockholders' equity will increase.
D)  Total liabilities will decrease and total stockholders' equity will decrease.E) A) and B)
F) A) and C)

Question 18

Which of the following transactions constitutes an accrual adjustment involving a revenue account?

Accepted Answer

A)  Revenue earned,but not yet collected,on investments.
B)  Cash collected in advance of the revenue being earned.
C)  Wages incurred,but not yet paid to employees,at the end of the accounting period.
D)  Interest owed,but not yet paid,on a note payable.E) B) and C)
F) A) and B)

Question 19

The company uses up $5,000 of an existing asset and the company adjusts its accounts accordingly.This is an example of a(n) :

Accepted Answer

A)  accrual adjustment.
B)  closing adjustment.
C)  deferral adjustment.
D)  unethical adjustment.E) A) and B)
F) B) and C) C

Question 20

On April 30,2018,Hawes Co.purchased a three-year insurance policy with a cash payment of $25,200.Coverage began immediately.
Required:
Part a.What is the amount of Insurance Expense relating to this insurance policy that will be reported for the year ended December 31,2018?
Part b.What is the balance of the Prepaid Insurance account at December 31,2018?

Accepted Answer

Part a.
Monthly insurance cost = $25,200...

Exam 4: Adjustments,Financial Statements,and Financial Results

Correct Answer
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Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

Correct Answer
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D

At the end of the month,the adjusting journal entry to record the use of supplies would include a debit to:

Correct Answer
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Adjusting entries often involve cash.

Correct Answer
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False

Which of the following statements about net income and net losses is not correct?

Correct Answer
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Match the term and its definition.There are more definitions than terms. -Carrying Value

Correct Answer
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A closing entry includes a:

Correct Answer
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Parker,Inc.had a beginning balance in its Retained Earnings account of $192,800.During the year,the company declared and paid a $2,350 dividend and,at the end of the year,it reported Retained Earnings of $199,930.The company's net income for the year was:

Correct Answer
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Which of the following entries records the adjustment for revenue earned,but not yet collected?

Correct Answer
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One major difference between deferral and accrual adjustments is that:

Correct Answer
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Match each transaction with the type of entry that will be required at April 30,the company's year-end. -The company provides lawn care in April for customers who paid in March.

Correct Answer
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At the beginning of its first year of operations,Bumper Corp.purchased $4,000 of supplies,which were debited to the Supplies account.They did not purchase any other supplies during the year.At the end of the year,it has $800 of supplies left.The appropriate adjusting journal entry is:

Correct Answer
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Closing entries:

Correct Answer
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The closing process includes a transfer of the Dividends account balance to the Retained Earnings account.

Correct Answer
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The asset,liability,and stockholders' equity accounts are referred to as permanent accounts.

Correct Answer
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When a trial balance is prepared,a contra-account appears immediately:

Correct Answer
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What are the effects on the accounting equation from the adjustment for revenue earned during the accounting period that had previously been recorded as a liability?

Correct Answer
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Which of the following transactions constitutes an accrual adjustment involving a revenue account?

Correct Answer
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The company uses up $5,000 of an existing asset and the company adjusts its accounts accordingly.This is an example of a(n) :

Correct Answer
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C

Correct Answer
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Part a.
Monthly insurance cost = $25,200...
View Answer

Exam 4: Adjustments,Financial Statements,and Financial Results

Correct AnswerverifiedShow Answer

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

Correct AnswerverifiedD

At the end of the month,the adjusting journal entry to record the use of supplies would include a debit to:

Correct AnswerverifiedShow Answer

Adjusting entries often involve cash.

Correct AnswerverifiedFalse

Which of the following statements about net income and net losses is not correct?

Correct AnswerverifiedShow Answer

Match the term and its definition.There are more definitions than terms. -Carrying Value

Correct AnswerverifiedShow Answer

A closing entry includes a:

Correct AnswerverifiedShow Answer

Parker,Inc.had a beginning balance in its Retained Earnings account of $192,800.During the year,the company declared and paid a $2,350 dividend and,at the end of the year,it reported Retained Earnings of $199,930.The company's net income for the year was:

Correct AnswerverifiedShow Answer

Which of the following entries records the adjustment for revenue earned,but not yet collected?

Correct AnswerverifiedShow Answer

One major difference between deferral and accrual adjustments is that:

Correct AnswerverifiedShow Answer

Match each transaction with the type of entry that will be required at April 30,the company's year-end. -The company provides lawn care in April for customers who paid in March.

Correct AnswerverifiedShow Answer

At the beginning of its first year of operations,Bumper Corp.purchased $4,000 of supplies,which were debited to the Supplies account.They did not purchase any other supplies during the year.At the end of the year,it has $800 of supplies left.The appropriate adjusting journal entry is:

Correct AnswerverifiedShow Answer

Closing entries:

Correct AnswerverifiedShow Answer

The closing process includes a transfer of the Dividends account balance to the Retained Earnings account.

Correct AnswerverifiedShow Answer

The asset,liability,and stockholders' equity accounts are referred to as permanent accounts.

Correct AnswerverifiedShow Answer

When a trial balance is prepared,a contra-account appears immediately:

Correct AnswerverifiedShow Answer

What are the effects on the accounting equation from the adjustment for revenue earned during the accounting period that had previously been recorded as a liability?

Correct AnswerverifiedShow Answer

Which of the following transactions constitutes an accrual adjustment involving a revenue account?

Correct AnswerverifiedShow Answer

The company uses up $5,000 of an existing asset and the company adjusts its accounts accordingly.This is an example of a(n) :

Correct AnswerverifiedC

Correct AnswerverifiedPart a.Monthly insurance cost = $25,200...View AnswerShow Answer

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D

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False

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C

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Part a.
Monthly insurance cost = $25,200...
View Answer