Accounting Summer At-Home Test 3

16 March 2023
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question
1.A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is
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debit Salaries Expense, $8,000; credit Salaries Payable, $8,000
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2.Unearned revenue is revenue that:rect
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the business has collected, but not yet earned.
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3.How do the adjusting entries differ from other journal entries?Adjusting entries always include debits or credits to at least one income statement account and at least one balance sheet account. Adjusting entries are made only at the end of the period. Adjusting entries never affect cash. All of these are true.
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all of these are true
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4.If a company is using the cash-basis method of accounting, when is revenue recorded?
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When cash is received, either prior to the services being rendered or at a time after the services were rendered
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5.If a company is using the accrual method of accounting, when is revenue recorded?
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When services are rendered, even though cash may be received at a later date
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6.In accounting, the matching principle means to match which of the following?
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Expenses to revenues
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7.Which of the following is the time-period concept?
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The concept that ensures that information is reported at regular intervals
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8.The purposes of the adjusting process are:
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to adjust expenses and revenues as well as asset and liability balances to the proper accrual basis.
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9.Real Losers, a diet magazine, collected $360,000 in subscription revenue in May. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned revenue account at the end of December?
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$150,00
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10.An entry that reflects the using up of a portion of a fixed asset's value would be a(n) ________ entry.
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depreciation
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11.Accrued revenue is revenue that
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the business has earned, but not collected.
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12.On September 1, 2011, Joy Company paid $4,000 in advance for an 8-month rental space covering the period of September, 2011 through April, 2012. The business makes adjusting entries once a year at year-end. The adjusting entry at December 31, 2011 would include a:
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debit of $2,000 to Rent expense on December 31, 2011. Calculations: $4,000/8 = $500 x 4 = $2,000
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13.A business pays salaries of $140,000 on the first and fifteenth day of every month. Which of the following is the adjusting entry required on December 31, 2011?
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A debit $140,000 to Salaries expense and a credit $140,000 to Salaries payable.
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14.A business acquires equipment for $140,000 on January 1, 2011. The equipment depreciation will be $20,000 each year for the seven years of the asset's expected life. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required on December 31, 2011?
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A debit $20,000 to Depreciation expense and a credit $20,000 to Accumulated depreciation.
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15.What type of account is Prepaid rent and what is its normal balance?
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Asset and debit
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16.What type of account is Unearned revenue and what is its normal balance?
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Liability and credit
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17.What is the term for the difference between the Equipment account and the Accumulated depreciation account?
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book value
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18.The table below represents Able Company's supplies account. Please supply the missing amount.
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$10,000 Calculations: $1,000 + $12,000 - $3,000 = $10,000
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19.The accountant for Barnes Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following is TRUE?
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Total assets are overstated.
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20.The accountant for Duman Legal Services failed to make an adjusting entry for supplies that had been used for the year. Which of the following is TRUE?
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Total assets are overstated.
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21.The balance in the prepaid rent account before adjustment at the end of the year is $24,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is
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debit Rent Expense, $6,000; credit Prepaid Rent, $6,000
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22.Adjusting entries are
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needed to bring accounts up to date and match revenue and expense
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23.Which of the following is TRUE?Accrual accounting is required by generally accepted accounting principles Accrual accounting records expenses when incurred. Cash-basis accounting records expenses when cash is paid. Accrual accounting records revenue when services are rendered. Cash-basis accounting records revenue when cash is received. Correct! All of these are true.
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all of these are true
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24.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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the accounts and amounts would be the same for both (1) and (2)