The net income reported on the income statement is $85,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $800. Net income, as corrected, is
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$85,000
$82,800
$82,000
100%
$84,200
Score:
1/1
2.
The unexpired insurance at the end of the fiscal period represents
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an accrued expense
0%
a deferred expense
an accrued asset
an accrued liability
Score:
0/1
3.
If the adjustment of the unearned rent account at the end of the period to recognize the amount of rent earned is inadvertently omitted, the net income for the period will be overstated.
Student Response
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Correct Answer
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False
100%
True
Score:
1/1
4.
One of the accounting concepts upon which deferrals and accruals are based is
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price-level adjustment
matching
cost
conservatism
0%
Score:
0/1
5.
Data for an adjusting entry described as "accrued wages, $2,020" means to debit
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Accounts Receivable and credit Wages Expense
Dividends and credit Wages Payable
0%
Wages Expense and credit Wages Payable
Wages Payable and credit Wages Expense
Score:
0/1
6.
As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called
Student Response
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equipment allocation
matching
accumulation
depreciation
100%
Score:
1/1
7.
When is the adjusted trial balance prepared?
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Before adjusting journal entries are posted
After the adjusting journal entries are journalized
Before the adjusting journal entries are journalized.
After adjusting journal entries are posted.
100%
Score:
1/1
8.
If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.
Student Response
Value
Correct Answer
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False
100%
True
Score:
1/1
9.
Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies
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purchased
either used or remaining
used
100%
that are in the ending balance
Score:
1/1
10.
All adjusting entries always involve
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the cash account.
only income statement accounts.
at least one income statement account and one balance sheet account.
100%
only balance sheet accounts.
Score:
1/1
11.
The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.
Wages Expense
2,150
Wages Payable
2,150
????????????????
Student Response
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Correct Answer
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Record wages to be paid this month
Record wages paid in advance
Record the payment of wages
Record wages expense incurred and to be paid next month
100%
Score:
1/1
12.
The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.
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True
0%
False
Score:
0/1
13.
A company does not realize that the last two day's revenue for the month was not recorded. The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.
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True
False
0%
Score:
0/1
14.
Deferrals are recorded transactions that delay the recognition of an expense or revenue.
Student Response
Value
Correct Answer
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False
True
100%
Score:
1/1
15.
A company purchases a one-year insurance policy on June 1 for $1,260. The adjusting entry on December 31 is
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debit Insurance Expense, $735, and credit Prepaid Insurance, $735.
100%
debit Prepaid Insurance, $630, and credit Cash, $630.
debit Insurance Expense, $525 and credit Prepaid Insurance, $525.
debit Insurance Expense, $630 and credit Prepaid Insurance, $630.
Score:
1/1
16.
The balance in the supplies account, before adjustment at the end of the year is $725. The proper adjusting entry if the amount of supplies on hand at the end of the year is $300 would be
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debit Supplies Expense $425, credit Supplies $425
100%
debit Supplies $425, credit Supplies Expense $425
debit Cash $300, credit Supplies $300
debit Supplies Expense $300, credit Supplies $300
Score:
1/1
17.
The matching concept requires expenses be recorded in the same period that the related revenue is recorded.
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True
100%
False
Score:
1/1
18.
The general term employed to indicate a delay of the recognition of an expense already paid or of a revenue already received is
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depreciation
inventory
accrual
deferral
100%
Score:
1/1
19.
The balance in the prepaid insurance account before adjustment at the end of the year is $12,000. If the additional data for the adjusting entry is (1) "the amount of insurance expired during the year is $9,500," as compared to additional data stating (2) "the amount of unexpired insurance applicable to a future period is $2,500," for the adjusting entry:
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Correct Answer
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there is not enough information given to determine the correct accounts and amounts
the debit and credit amount for (1) would be the same as (2) but the accounts would be different
the accounts for (1) would be the same as the accounts for (2) but the amounts would be different
the accounts and amounts would be the same for both (1) and (2)
100%
Score:
1/1
20.
A contra asset account for Land will normally appear in the balance sheet.
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