Question 1

On July 1,2015,Nuby Trucking Company purchased a new truck for $52,000.The truck is estimated to have a useful life of six years and a residual value of $10,000.How much depreciation expense will be recorded for the truck during the year ended December 31,2015?

Accepted Answer

A)   $3,000.
B)   $3,500.
C)   $4,000.
D)   $6,000.
E)   $7,000.F) B) and D)
G) A) and E)

Question 2

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

Accepted Answer

A)   Operating expenses.
B)   Prepaid expenses.
C)   Unearned expenses.
D)   Accounts payable.
E)   Accrued expenses.F) B) and E)
G) C) and D)

Question 3

At year-end,the accountant for Del Carpio Diaper Service noted the following errors in the trial balance:  Using the form below,indicate if each error would cause the trial balance to be out of balance,the amount of any imbalance,and if a correcting entry is required.

Accepted Answer

The answer of At year-end,the accountant for Del Carpio Diaper...

Question 4

Failure to record depreciation expense will overstate the asset and understate the expense.

Accepted Answer

A) True 
 B)False

Question 5

Discuss the two alternate methods used to account for prepaid expenses.

Accepted Answer

The first method places all prepaid expe...

Question 6

A company's fiscal year must correspond with the calendar year.

Accepted Answer

A) True 
 B)False

Question 7

A balance sheet that places the assets above the liabilities and equity is called a(n) :

Accepted Answer

A)   Report form balance sheet.
B)   Account form balance sheet.
C)   Adjusted balance sheet.
D)   Unadjusted balance sheet.
E)   The accounting equation.F) A) and B)
G) A) and C)

Question 8

Using the schedule below,indicate the impact of the following errors made during the adjusting entry process.Use a "+" for overstatements,a "-" for understatements,and a "0" for no effect.

Accepted Answer

The answer of Using the schedule below,indicate the impact of...

Question 9

Identify and explain the reasons for the order in which financial statements are prepared.

Accepted Answer

The income statement is prepared first.T...

Question 10

The cost of an asset less its accumulated depreciation is called the _____________.

Accepted Answer

The answer of The cost of an asset less its...

Question 11

Unearned revenue is reported in the financial statements as:

Accepted Answer

A)   A revenue on the balance sheet.
B)   A liability on the balance sheet.
C)   An unearned revenue on the income statement.
D)   An asset on the balance sheet.
E)   An operating activity on the statement of cash flows.F) C) and E)
G) B) and C)

Question 12

A(n)_______________________ is a listing of all of the accounts in the ledger with balances before adjustments are made.

Accepted Answer

Unadjusted...

Question 13

Internal transactions have no effect on the accounting equation.

Accepted Answer

A) True 
 B)False

Question 14

If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees,the end-of-period adjusting entry to record the portion of these fees that has been earned is:

Accepted Answer

A)   Debit Cash and credit Legal Fees Earned.
B)   Debit Cash and credit Unearned Legal Fees.
C)   Debit Unearned Legal Fees and credit Legal Fees Earned.
D)   Debit Legal Fees Earned and credit Unearned Legal Fees.
E)   Some other entry.F) B) and E)
G) A) and E)

Question 15

For a prepaid expense,the adjusting entry would:

Accepted Answer

A)   Result in a debit to an expense account and a credit to an asset account.
B)   Cause a prepaid expense to be overstated and liabilities to be understated.
C)   Result in a credit to an expense account and a debit to an asset account.
D)   Result in a debit to a liability account and a credit to an asset account.
E)   Decrease cash.F) D) and E)
G) A) and B)

Question 16

The adjusted trial balance contains information pertaining to:

Accepted Answer

A)   Asset accounts only.
B)   Balance sheet accounts only.
C)   Income statement accounts only.
D)   All general ledger accounts.
E)   Revenue accounts only.F) C) and D)
G) None of the above

Question 17

Adjusting entries may affect only balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 18

The accounting principle that requires revenue to be reported when earned is the:

Accepted Answer

A)   Matching principle.
B)   Revenue recognition principle.
C)   Timeliness principle.
D)   Cost principle.
E)   Going concern principle.F) None of the above
G) A) and D)

Question 19

The Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the year?

Accepted Answer

A)   $2,700.
B)   $2,900.
C)   $3,300.
D)   $3,500.
E)   $3,700.F) A) and B)
G) A) and E)

Question 20

Which of the following does not require an adjusting entry at year-end?

Accepted Answer

A)   Accrued interest on notes payable.
B)   Supplies used during the period.
C)   Cash invested by owner.
D)   Accrued wages.
E)   Expired portion of prepaid insurance.F) B) and C)
G) A) and E)

Exam 3: Adjusting Accounts for Financial Statements

A(n)_______________________ is a listing of all of the accounts in the ledger with balances before adjustments are made.

Correct AnswerverifiedUnadjusted...View AnswerShow Answer

Which of the following does not require an adjusting entry at year-end?

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Internal transactions have no effect on the accounting equation.

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For a prepaid expense,the adjusting entry would:

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On July 1,2015,Nuby Trucking Company purchased a new truck for $52,000.The truck is estimated to have a useful life of six years and a residual value of $10,000.How much depreciation expense will be recorded for the truck during the year ended December 31,2015?

Correct AnswerverifiedShow Answer

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called

Correct AnswerverifiedShow Answer

Failure to record depreciation expense will overstate the asset and understate the expense.

Correct AnswerverifiedShow Answer

The Office Supplies account shows a beginning balance of $600 and an ending balance of $400.If office supplies expense for the year is $3,100,what amount of office supplies was purchased during the year?

Correct AnswerverifiedShow Answer

The adjusted trial balance contains information pertaining to:

Correct AnswerverifiedShow Answer

The cost of an asset less its accumulated depreciation is called the _____________.

Correct AnswerverifiedShow Answer

A balance sheet that places the assets above the liabilities and equity is called a(n) :

Correct AnswerverifiedShow Answer

A company's fiscal year must correspond with the calendar year.

Correct AnswerverifiedShow Answer

Using the schedule below,indicate the impact of the following errors made during the adjusting entry process.Use a "+" for overstatements,a "-" for understatements,and a "0" for no effect.

Correct AnswerverifiedShow Answer

Unearned revenue is reported in the financial statements as:

Correct AnswerverifiedShow Answer

If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees,the end-of-period adjusting entry to record the portion of these fees that has been earned is:

Correct AnswerverifiedShow Answer

Discuss the two alternate methods used to account for prepaid expenses.

Correct AnswerverifiedThe first method places all prepaid expe...View AnswerShow Answer

At year-end,the accountant for Del Carpio Diaper Service noted the following errors in the trial balance: Using the form below,indicate if each error would cause the trial balance to be out of balance,the amount of any imbalance,and if a correcting entry is required.

Correct AnswerverifiedShow Answer

Identify and explain the reasons for the order in which financial statements are prepared.

Correct AnswerverifiedThe income statement is prepared first.T...View AnswerShow Answer

The accounting principle that requires revenue to be reported when earned is the:

Correct AnswerverifiedShow Answer

Adjusting entries may affect only balance sheet accounts.

Correct AnswerverifiedShow Answer

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The first method places all prepaid expe...
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The income statement is prepared first.T...
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