Question 1

On December 1,Milton Company borrowed $300,000,at 8% annual interest,from the Tennessee National Bank.Interest is paid when the loan matures one year from the issue date.What is the adjusting entry for accruing interest that Milton would need to make on December 31,the calendar year-end?

Accepted Answer

A)  debit Interest Payable,$2,000;credit Interest Expense,$2,000.
B)  debit Interest Expense,$2,000;credit Interest Payable,$2,000.
C)  debit Interest Expense,$2,000;credit Cash,$2,000.
D)  debit Interest Expense,$4,000;credit Interest Payable,$4,000.
E)  debit Interest Expense,$24,000;credit Interest Payable,$24,000.F) A) and B)
G) A) and D)

Question 2

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Accepted Answer

A)  Is referred to as depreciation expense.
B)  Is referred to as accumulated depreciation.
C)  Is shown on the income statement of the final period.
D)  Is only recorded when the asset is disposed of.
E)  Is referred to as an accrued asset.F) All of the above
G) B) and E)

Question 3

Glisten Co.leases an office to a tenant at the rate of $3,000 per month.The tenant contacted Glisten and arranged to pay the rent for December on January 8 of the following year.Glisten agrees to this arrangement.
a. )Prepare the journal entry that Glisten must make at year ended December 31 to record the accrued rent revenue.
b. )Prepare the journal entry to record the receipt of the rent on January 8 of the following year.

Accepted Answer

The answer of Glisten Co.leases an office to a tenant...

Question 4

Accrual accounting and the adjusting process rely on two principles: the ___________________ principle and the ________________________ principle.

Accepted Answer

revenue recognition ...

Question 5

Record the December 31 adjusting entries for the following transactions and events in general journal form.Assume that December 31 is the end of the annual accounting period.
a.The Prepaid Insurance account shows a debit balance of $2,340,representing the cost of a two-year fire insurance policy that was purchased on October 1 of the current year and has not been adjusted to-date.
b.The Store Supplies account has a debit balance of $400;a year-end inventory count reveals $80 of supplies still on hand.
c.On November 1 of the current year,Rent Earned was credited for $1,500.This amount represented the rent earned for a three-month period beginning November 1.
d.Estimated depreciation on store equipment is $600.
e.Accrued salaries amount to $1,400.

Accepted Answer

The answer of Record the December 31 adjusting entries for...

Question 6

On December 31,2015 Winters Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15.The adjusting entry needed on December 31 to accrue this cost is:

Accepted Answer

A)  Debit Supplies $385;credit Accounts Payable $385.
B)  Debit Accounts Payable $385;credit Supplies $385.
C)  Debit Accounts Payable $385;credit Cash $385.
D)  Debit Supplies Expense $385;credit Cash $385.
E)  Debit Supplies Expense $385;credit Supplies $385.F) A) and B)
G) A) and C)

Question 7

A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday.If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday,the month-end adjusting entry to record the salaries earned but unpaid is:

Accepted Answer

A)  Debit Unpaid Salaries $600 and credit Salaries Payable $600.
B)  Debit Salaries Expense $400 and credit Salaries Payable $400.
C)  Debit Salaries Expense $600 and credit Salaries Payable $600.
D)  Debit Salaries Payable $400 and credit Salaries Expense $400.
E)  Debit Salaries Expense $400 and credit Cash $400.F) B) and E)
G) All of the above

Question 8

Two accounting principles central to accrual accounting basis that are relied on in the adjusting process are:

Accepted Answer

A)  Revenue recognition and monetary unit.
B)  Revenue recognition and going-concern.
C)  Matching and cost.
D)  Matching and business entity.
E)  Revenue recognition and matching.F) B) and E)
G) None of the above

Question 9

On April 1,Griffith Publishing Company received $1,548 from Santa Fe,Inc.for 36-month subscriptions to several different magazines.The subscriptions started immediately.What is the amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription assuming the company uses a calendar reporting period?

Accepted Answer

A)  $0.
B)  $516.
C)  $387.
D)  $129.
E)  $430.F) A) and C)
G) D) and E)

Question 10

On December 31,2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

Accepted Answer

A)  Debit Utilities Expense $215;credit Accounts Payable $215.
B)  Debit Accounts Payable $215;credit Utilities Expense $215.
C)  Debit Prepaid Utilities $215;credit Cash $215.
D)  Debit Utilities Expense $215;credit Prepaid Utilities $215.
E)  Debit Prepaid Utilities $215;credit Accounts Payable $215.F) A) and E)
G) B) and C)

Question 11

An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n) :

Accepted Answer

A)  Accrued expense.
B)  Contra account.
C)  Accrued revenue.
D)  Intangible asset.
E)  Adjunct account.F) A) and B)
G) None of the above

Question 12

Juno Company had $500 of office supplies available at the beginning of the current year.During the year Juno Company purchased $2,750 worth of office supplies.On December 31 of this year $375 worth of office supplies remained.
a.Calculate the amount of Juno Company's office supplies expense for the current year.(Show your calculations. )
b.Prepare the journal entry to adjust the supplies account.

Accepted Answer

The answer of Juno Company had $500 of office supplies...

Question 13

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Accepted Answer

A)  Debit Unpaid Salaries and credit Salaries Payable.
B)  Debit Salaries Payable and credit Salaries Expense.
C)  Debit Salaries Expense and credit Cash.
D)  Debit Salaries Expense and credit Salaries Payable.
E)  Debit Cash and credit Salaries Expense.F) B) and C)
G) A) and B)

Question 14

________________ refer to costs incurred in a period that are both unpaid and unrecorded.___________ refer to revenues earned in a period that are both unrecorded and not yet received in cash (or other assets).

Accepted Answer

Accrued expenses ;ac...

Question 15

Profit margin is defined as:

Accepted Answer

A)  Revenues divided by net sales.
B)  Net sales divided by assets.
C)  Net income divided by net sales.
D)  Net income divided by assets.
E)  Net sales divided by net income.F) A) and D)
G) C) and D)

Question 16

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Accepted Answer

A) True 
 B)False

Question 17

Adjusting entries made at the end of an accounting period accomplish all of the following except:

Accepted Answer

A)  Updating liability and asset accounts to their proper balances.
B)  Assigning revenues to the periods in which they are earned.
C)  Assigning expenses to the periods in which they are incurred.
D)  Assuring that financial statements reflect the revenues earned and the expenses incurred.
E)  Assuring that external transaction amounts remain unchanged.F) None of the above
G) A) and D)

Question 18

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Accepted Answer

A)  Accumulated depreciation.
B)  A contra account.
C)  The matching principle.
D)  Depreciation expense.
E)  An accrued account.F) B) and E)
G) B) and D)

Question 19

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  Intangible expenses.
B)  Prepaid expenses.
C)  Unearned expenses.
D)  Net expenses.
E)  Accrued expenses.F) A) and D)
G) A) and C)

Exam 3: Adjusting Accounts and Preparing Financial Statements

An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n) :

Correct Answer
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The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Correct Answer
verified

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

Correct Answer
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Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Correct Answer
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Profit margin is defined as:

Correct Answer
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On December 1,Milton Company borrowed $300,000,at 8% annual interest,from the Tennessee National Bank.Interest is paid when the loan matures one year from the issue date.What is the adjusting entry for accruing interest that Milton would need to make on December 31,the calendar year-end?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

On December 31,2015 Winters Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15.The adjusting entry needed on December 31 to accrue this cost is:

Correct Answer
verified

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Correct Answer
verified

Adjusting entries made at the end of an accounting period accomplish all of the following except:

Correct Answer
verified

Correct Answer
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The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Correct Answer
verified

Two accounting principles central to accrual accounting basis that are relied on in the adjusting process are:

Correct Answer
verified

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Correct Answer
verified

Accrual accounting and the adjusting process rely on two principles: the _ principle and the ______ principle.

Correct Answer
verified
revenue recognition ...
View Answer

______ refer to costs incurred in a period that are both unpaid and unrecorded._ refer to revenues earned in a period that are both unrecorded and not yet received in cash (or other assets).

Correct Answer
verified
Accrued expenses ;ac...
View Answer

On December 31,2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

Correct Answer
verified

Exam 3: Adjusting Accounts and Preparing Financial Statements

An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n) :

Correct AnswerverifiedShow Answer

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

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:

Correct AnswerverifiedShow Answer

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Correct AnswerverifiedShow Answer

Profit margin is defined as:

Correct AnswerverifiedShow Answer

On December 1,Milton Company borrowed $300,000,at 8% annual interest,from the Tennessee National Bank.Interest is paid when the loan matures one year from the issue date.What is the adjusting entry for accruing interest that Milton would need to make on December 31,the calendar year-end?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On December 31,2015 Winters Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15.The adjusting entry needed on December 31 to accrue this cost is:

Correct AnswerverifiedShow Answer

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Correct AnswerverifiedShow Answer

Adjusting entries made at the end of an accounting period accomplish all of the following except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Correct AnswerverifiedShow Answer

Two accounting principles central to accrual accounting basis that are relied on in the adjusting process are:

Correct AnswerverifiedShow Answer

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Correct AnswerverifiedShow Answer

Accrual accounting and the adjusting process rely on two principles: the ___________________ principle and the ________________________ principle.

Correct Answerverifiedrevenue recognition ...View AnswerShow Answer

________________ refer to costs incurred in a period that are both unpaid and unrecorded.___________ refer to revenues earned in a period that are both unrecorded and not yet received in cash (or other assets).

Correct AnswerverifiedAccrued expenses ;ac...View AnswerShow Answer

On December 31,2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

Correct AnswerverifiedShow 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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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Accrual accounting and the adjusting process rely on two principles: the _ principle and the ______ principle.

Correct Answer
verified
revenue recognition ...
View Answer

______ refer to costs incurred in a period that are both unpaid and unrecorded._ refer to revenues earned in a period that are both unrecorded and not yet received in cash (or other assets).

Correct Answer
verified
Accrued expenses ;ac...
View Answer

Correct Answer
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