Question 1

How does the adjustment for depreciation differ from other deferral adjustments?

Accepted Answer

A)  The depreciation adjustment results in an increase to a long-lived asset account,while the other deferral adjustments reduce asset accounts.
B)  The depreciation adjustment uses a contra-asset account rather than reducing the asset account directly.
C)  The depreciation adjustment increases a liability account rather than reducing an asset account directly.
D)  The depreciation adjustment is not a deferral adjustment,but rather an accrual adjustment.E) C) and D)
F) All of the above

Question 2

Which of the following is the usual last step in the accounting cycle?

Accepted Answer

A)  Preparing the adjusted trial balance.
B)  Preparing the financial statements.
C)  Preparing a post-closing trial balance.
D)  Preparing an unadjusted trial balance.E) A) and B)
F) A) and C)

Question 3

The asset account Office Supplies has a balance of $2,000 at the beginning of the year.The amount on hand at the end of the year is $1,250.The company has calculated the Supplies Expense for the year to be $8,750.Based on this information,what amount of office supplies was purchased during the year?

Accepted Answer

A)  $0
B)  $10,000
C)  $8,000
D)  $7,500E) A) and B)
F) None of the above

Question 4

What is the effect of the adjusting entry for depreciation on the accounting equation?

Accepted Answer

A)  No effect on assets;Decrease liabilities;Increase stockholders' equity
B)  Decrease assets;No effect on liabilities;Decrease stockholders' equity
C)  Increase assets;No effect on liabilities;Increase stockholders' equity
D)  Decrease assets;Decrease liabilities;No effect on stockholders' equityE) A) and D)
F) None of the above

Question 5

A contra-account is added to the account it offsets.

Accepted Answer

A) True 
 B)False

Question 6

The Accumulated Depreciation account is a(n) :

Accepted Answer

A)  expense account.
B)  liability account.
C)  asset account.
D)  contra-asset account.E) A) and B)
F) C) and D)

Question 7

Board Building Co.redeemed $3,850 of gift cards that customers used to pay for services that were performed by the company.The related adjusting entry would include a debit to:

Accepted Answer

A)  Accounts Receivable and a credit to Service Revenue.
B)  Deferred Revenue and a credit to Service Revenue.
C)  Cash and a credit to Deferred Revenue.
D)  Cash and a credit to Service Revenue.E) None of the above
F) All of the above

Question 8

When will Accounts Receivable be involved in an adjusting entry?

Accepted Answer

A)  Revenues are earned but have not been collected or recorded at the end of the period.
B)  Cash is collected in advance of the revenue earned at the end of the period.
C)  Revenue from cash collected earlier in the period has been earned at the end of the period.
D)  Accounts Receivable will never be used in an adjusting entry.It is only used in daily transactions.E) A) and B)
F) None of the above

Question 9

The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is likely to be affected by an adjusting entry?

Accepted Answer

A)  Cash
B)  Common Stock
C)  Retained Earnings
D)  Deferred RevenueE) A) and D)
F) All of the above

Question 10

All of the transactions of Harding Trading Co.for the year have been journalized and posted.The following information has been gathered for the adjustment process as of December 31,2018:
A.The Supplies account shows a balance of $900.A count of supplies revealed $400 on hand.
B.The $1,200 premium relating to a one-year insurance policy was paid on December 1,2018.
C.The company's equipment,which was purchased last year,depreciates at a rate of $1,000 per year.
D.On September 30,2018,a customer paid $10,000 in advance for services;as of December 31,2018,services in the amount of $3,000 had been performed for this customer.
E.Employees are paid $5,000 on Fridays for the 5-day workweek,which ends on that Friday.However,December 31,2018 falls on a Thursday.
F.The company has completed $500 of work for customers;the customers have not yet been billed and the related revenue has not been recorded.
Required:
Part a.Prepare the required adjusting entries required at December 31,2018.
Part b.For each of the adjusting items,indicate the amount and the direction of effects of the adjusting journal entry on the elements of the balance sheet and income statement.Complete the following table by entering the amount and the direction (+ for increase,− for decrease)or leave blank for no effect.

Accepted Answer

Part a.

Supplies Expense ($...

Question 11

If a contra-account of $20,000 is mistakenly included in the same column of the trial balance as the account it offsets,the error will cause the debit and credit column totals to differ by $40,000.

Accepted Answer

A) True 
 B)False

Question 12

An 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 13

Which of the following statements about financial statements and the trial balance is correct?

Accepted Answer

A)  Financial statements are prepared only after the adjusted trial balance has shown that debits equal credits.
B)  A post-closing trial balance should be prepared before temporary accounts are closed.
C)  An adjusted trial balance reflects the amount of Retained Earnings to be shown on the Balance Sheet.
D)  A post-closing trial balance lists the account balances of the accounts that are reported on the income statement.E) C) and D)
F) B) and D)

Question 14

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

Accepted Answer

A)  involve previously recorded assets and liabilities,and accrual adjustments involve previously unrecorded assets and liabilities.
B)  are made after financial statements are prepared,and accrual adjustments are made before financial statements are prepared.
C)  are made annually,and accrual adjustments are made monthly.
D)  are influenced by estimates of future events,and accrual adjustments are not.E) B) and C)
F) C) and D)

Question 15

Adjustments ensure that ________ balances are reported at amounts representing the economic benefits used during the period.

Accepted Answer

A)  expense
B)  revenue
C)  asset
D)  accountE) A) and B)
F) None of the above

Question 16

A contra-account:

Accepted Answer

A)  increases the original value of the account to which it relates.
B)  always appears in the same column of the trial balance as the account to which it relates.
C)  offsets,or reduces,another account.
D)  reduce the asset to its fair value.E) A) and B)
F) A) and C)

Question 17

An adjusting journal entry that includes an increase to an expense account might also include an increase in a(n) :

Accepted Answer

A)  asset account.
B)  related expense account.
C)  revenue account.
D)  contra-asset account.E) All of the above
F) None of the above

Question 18

Match each transaction with the type of entry that will be required at April 30,the company's year-end.
-The company uses $1,600 worth of fertilizer from its stock of supplies.

Accepted Answer

A)  Closing entry
B)  Deferral adjusting entry
C)  Accrual adjusting entryD) None of the above
E) All of the above

Question 19

Which of the following is a term for the value at which an asset is reported on a financial statement?

Accepted Answer

A)  Accrual value
B)  Adjusted value
C)  Equipment,as adjusted
D)  Carrying valueE) A) and B)
F) A) and C)

Question 20

Which of the following will happen if the accrual adjustment entry is not made to record an expense incurred but not yet recorded?

Accepted Answer

A)  Both expenses and liabilities will be overstated.
B)  Both expenses and liabilities will be understated.
C)  Expenses will be understated and liabilities will be overstated.
D)  Expenses will be overstated and liabilities will be understated.E) B) and D)
F) A) and B)

Exam 4: Adjustments,Financial Statements,and Financial Results

A contra-account is added to the account it offsets.

Correct Answer
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An adjusting journal entry that includes an increase to an expense account might also include an increase in a(n) :

Correct Answer
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Which of the following statements about financial statements and the trial balance is correct?

Correct Answer
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Adjustments ensure that ________ balances are reported at amounts representing the economic benefits used during the period.

Correct Answer
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The asset account Office Supplies has a balance of $2,000 at the beginning of the year.The amount on hand at the end of the year is $1,250.The company has calculated the Supplies Expense for the year to be $8,750.Based on this information,what amount of office supplies was purchased during the year?

Correct Answer
verified

When will Accounts Receivable be involved in an adjusting entry?

Correct Answer
verified

Match each transaction with the type of entry that will be required at April 30,the company's year-end. -The company uses $1,600 worth of fertilizer from its stock of supplies.

Correct Answer
verified

What is the effect of the adjusting entry for depreciation on the accounting equation?

Correct Answer
verified

Which of the following is a term for the value at which an asset is reported on a financial statement?

Correct Answer
verified

A contra-account:

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

Correct Answer
verified

If a contra-account of $20,000 is mistakenly included in the same column of the trial balance as the account it offsets,the error will cause the debit and credit column totals to differ by $40,000.

Correct Answer
verified

The Accumulated Depreciation account is a(n) :

Correct Answer
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How does the adjustment for depreciation differ from other deferral adjustments?

Correct Answer
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Which of the following will happen if the accrual adjustment entry is not made to record an expense incurred but not yet recorded?

Correct Answer
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Correct Answer
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Part a.

Supplies Expense ($...
View Answer

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

Correct Answer
verified

Board Building Co.redeemed $3,850 of gift cards that customers used to pay for services that were performed by the company.The related adjusting entry would include a debit to:

Correct Answer
verified

The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is likely to be affected by an adjusting entry?

Correct Answer
verified

Which of the following is the usual last step in the accounting cycle?

Correct Answer
verified

Exam 4: Adjustments,Financial Statements,and Financial Results

A contra-account is added to the account it offsets.

Correct AnswerverifiedShow Answer

An adjusting journal entry that includes an increase to an expense account might also include an increase in a(n) :

Correct AnswerverifiedShow Answer

Which of the following statements about financial statements and the trial balance is correct?

Correct AnswerverifiedShow Answer

Adjustments ensure that ________ balances are reported at amounts representing the economic benefits used during the period.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When will Accounts Receivable be involved in an adjusting entry?

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 uses $1,600 worth of fertilizer from its stock of supplies.

Correct AnswerverifiedShow Answer

What is the effect of the adjusting entry for depreciation on the accounting equation?

Correct AnswerverifiedShow Answer

Which of the following is a term for the value at which an asset is reported on a financial statement?

Correct AnswerverifiedShow Answer

A contra-account:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a contra-account of $20,000 is mistakenly included in the same column of the trial balance as the account it offsets,the error will cause the debit and credit column totals to differ by $40,000.

Correct AnswerverifiedShow Answer

The Accumulated Depreciation account is a(n) :

Correct AnswerverifiedShow Answer

How does the adjustment for depreciation differ from other deferral adjustments?

Correct AnswerverifiedShow Answer

Which of the following will happen if the accrual adjustment entry is not made to record an expense incurred but not yet recorded?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedPart a. Supplies Expense ($...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Board Building Co.redeemed $3,850 of gift cards that customers used to pay for services that were performed by the company.The related adjusting entry would include a debit to:

Correct AnswerverifiedShow Answer

The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is likely to be affected by an adjusting entry?

Correct AnswerverifiedShow Answer

Which of the following is the usual last step in the accounting cycle?

Correct AnswerverifiedShow Answer

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Part a.

Supplies Expense ($...
View 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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