Question 1

Why is the balance in the Depreciation Expense account generally different from the balance in the Accumulated Depreciation account?

Accepted Answer

A)   The adjusting entry contains a different amount for Depreciation Expense and Accumulated Depreciation. The Accumulated Depreciation account contains the value of the long-lived asset as well as the depreciation.
B)   Depreciation expense only reflects the current period depreciation. Accumulated
C)   Depreciation contains depreciation since the asset was purchased.
D)   The balances in the two accounts should be the same amount.E) None of the above
F) A) and D)

Question 2

The following items are taken from an adjusted trial balance prepared as of December 31,2015.All accounts have normal balances.
  
Required:
Part a.Determine the Credits column total on the adjusted trial balance.
Part b.Determine that amount of net income (net loss)for the year.
Part c.Determine the Total Assets amount that will be reported on the Balance Sheet at December 31,2015.
Part d.Determine the Total Liabilities amount that will be reported on the Balance Sheet at December 31,2015.
Part e.Determine the amount of Retained Earnings that will be reported on the Balance Sheet at December 31,2015.

Accepted Answer

Part a
Credit balance accounts = Account...

Question 3

The accrual adjustment recorded to adjust for expenses incurred but not yet paid will cause:

Accepted Answer

A)   assets to increase
B)   assets to decrease
C)   liabilities to increase
D)   liabilities to decreaseE) A) and D)
F) B) and C)

Question 4

The Prepaid Insurance account has a normal balance of $3,750 at the beginning of the month.The company used $980 of insurance coverage during the month.Which of the following statements is correct?

Accepted Answer

A)   The company should credit Insurance Expense for $980 and debit Prepaid Insurance for $980.
B)   Retained earnings will decrease and stockholders' equity will increase.
C)   The company should debit Insurance Expense for $980 and credit Prepaid Insurance for $980.
D)   Retained earnings and stockholders' equity will both increase.E) A) and B)
F) B) and C)

Question 5

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 6

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 7

If the total amount that should have been debited to Insurance Expense is mistakenly debited instead to Prepaid Insurance,what will be the effect on the financial statements for the year?

Accepted Answer

A)   Revenues will be overstated.
B)   Assets will be overstated.
C)   Stockholders' equity will be understated.
D)   Expenses will be overstated.E) B) and D)
F) A) and B)

Question 8

Amortization is the concept that applies to the:

Accepted Answer

A)   expensing of long-term assets that lack physical substance over their useful lives
B)   depreciation of prepaids and supplies as they are used
C)   recording of amounts collected in advance that have not yet been earned
D)   recording of unearned revenue in the period cash is collected in advance of being earnedE) All of the above
F) A) and B)

Question 9

The purpose of adjusting entries is to transfer net income and dividends to Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 10

Accounts Receivable should be increased for:

Accepted Answer

A)   revenues earned during the period but not yet collected
B)   inventory purchased during the period but not yet paid
C)   cash collected from customers in advance of being earned
D)   cash collected from customers for revenues earned during the periodE) None of the above
F) A) and B)

Question 11

The Treasure Chest Corporation had Retained Earnings at the end of December 31,2015 of $450,000.During 2016,the company had net income of $170,000 and declared dividends of $20,000.The amount of Retained Earnings reported on the balance sheet as of December 31,2016 will be:

Accepted Answer

A)   $430,000.
B)   $600,000.
C)   $620,000.
D)   $640,000.E) B) and C)
F) A) and B)

Question 12

Which of the following types of transactions could be an accrual adjustment?

Accepted Answer

A)   An increase to an asset account and an increase to a liability account
B)   An increase to a revenue account and an increase to an expense account
C)   An increase to a liability account and an increase to a revenue account
D)   An increase to an asset account and an increase to a revenue accountE) B) and C)
F) A) and D)

Question 13

A company started the year with $1,500 of supplies on hand.During the year the company purchased additional supplies of $800 and recorded them as increase to the supplies asset.At the end of the year the company determined that only $300 of supplies are still on hand.What is the adjusting journal entry to be made at the end of the period?

Accepted Answer

A)   Debit Supplies Expense and credit Supplies for $2,000
B)   Debit Supplies and credit Supplies Expense for $300
C)   Debit Supplies Expense and credit Supplies for $1,200
D)   Debit Supplies and credit Supplies Expense for $1,000E) C) and D)
F) None of the above

Question 14

One of the purposes of the closing entries is to bring the balances in all asset,liability,revenue,and expense accounts down to zero to start the next accounting period.

Accepted Answer

A) True 
 B)False

Question 15

After the adjustments have been completed,the adjusted balance in the Supplies Expense account represents the cost of supplies:

Accepted Answer

A)   on hand at the end of the accounting period
B)   purchased during the accounting period
C)   used during the accounting period
D)   purchased, but not yet paid for, at the end of the accounting periodE) B) and C)
F) A) and C)

Question 16

The table below describes the five adjustments that will be required and the accounts that will appear in each adjusting entry.
Required:
Complete the table by indicating whether the related adjusting entry will include a debit (Debit)or credit (Credit)to the accounts listed.Then,indicate whether the related adjusting entry will increase

Accepted Answer

The answer of The table below describes the five adjustments...

Question 17

Corporate income taxes cannot be calculated until all other adjustments are made.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

Accepted Answer

A)   Salaries and Wages Payable will decrease by the amount of the unpaid wages.
B)   Salaries and Wages Expense will be recorded as a credit for the amount of the unpaid salaries and wages.
C)   Salaries and Wages Payable will be recorded as a debit for the amount of the unpaid salaries and wages.
D)   Salaries and Wages Expense will increase by the amount of the unpaid salaries and wages.E) C) and D)
F) A) and B)

Question 19

The balance in retained earnings prior to the closing process equals:

Accepted Answer

A)   the balance at the end of the previous accounting period
B)   beginning retained earnings plus the current period's net income
C)   beginning retained earnings plus the current period's net income minus the current
D)   period's dividends declared the cash balance on the balance sheetE) B) and C)
F) C) and D)

Question 20

What is the purpose of the adjusted trial balance?

Accepted Answer

A)   To ensure that all transactions have been recorded
B)   To ensure that total debits equal total credits after the adjustments have been recorded
C)   To ensure that the correct accounts have been adjusted
D)   To ensure that there have been no errors in recording the transactionsE) C) and D)
F) A) and D)

Exam 4: Adjustments,financial Statements,and Financial Results

Corporate income taxes cannot be calculated until all other adjustments are made.

Correct Answer
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What is the purpose of the adjusted trial balance?

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

Correct Answer
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The Treasure Chest Corporation had Retained Earnings at the end of December 31,2015 of $450,000.During 2016,the company had net income of $170,000 and declared dividends of $20,000.The amount of Retained Earnings reported on the balance sheet as of December 31,2016 will be:

Correct Answer
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Correct Answer
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If the total amount that should have been debited to Insurance Expense is mistakenly debited instead to Prepaid Insurance,what will be the effect on the financial statements for the year?

Correct Answer
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After the adjustments have been completed,the adjusted balance in the Supplies Expense account represents the cost of supplies:

Correct Answer
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Correct Answer
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The balance in retained earnings prior to the closing process equals:

Correct Answer
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The Prepaid Insurance account has a normal balance of $3,750 at the beginning of the month.The company used $980 of insurance coverage during the month.Which of the following statements is correct?

Correct Answer
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Which of the following types of transactions could be an accrual adjustment?

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 purpose of adjusting entries is to transfer net income and dividends to Retained Earnings.

Correct Answer
verified

One of the purposes of the closing entries is to bring the balances in all asset,liability,revenue,and expense accounts down to zero to start the next accounting period.

Correct Answer
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Why is the balance in the Depreciation Expense account generally different from the balance in the Accumulated Depreciation account?

Correct Answer
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The accrual adjustment recorded to adjust for expenses incurred but not yet paid will cause:

Correct Answer
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Correct Answer
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Part a
Credit balance accounts = Account...
View Answer

Accounts Receivable should be increased for:

Correct Answer
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Amortization is the concept that applies to the:

Correct Answer
verified

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

Correct Answer
verified

Exam 4: Adjustments,financial Statements,and Financial Results

Corporate income taxes cannot be calculated until all other adjustments are made.

Correct AnswerverifiedShow Answer

What is the purpose of the adjusted trial balance?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Treasure Chest Corporation had Retained Earnings at the end of December 31,2015 of $450,000.During 2016,the company had net income of $170,000 and declared dividends of $20,000.The amount of Retained Earnings reported on the balance sheet as of December 31,2016 will be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the total amount that should have been debited to Insurance Expense is mistakenly debited instead to Prepaid Insurance,what will be the effect on the financial statements for the year?

Correct AnswerverifiedShow Answer

After the adjustments have been completed,the adjusted balance in the Supplies Expense account represents the cost of supplies:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The balance in retained earnings prior to the closing process equals:

Correct AnswerverifiedShow Answer

The Prepaid Insurance account has a normal balance of $3,750 at the beginning of the month.The company used $980 of insurance coverage during the month.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following types of transactions could be an accrual adjustment?

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 purpose of adjusting entries is to transfer net income and dividends to Retained Earnings.

Correct AnswerverifiedShow Answer

One of the purposes of the closing entries is to bring the balances in all asset,liability,revenue,and expense accounts down to zero to start the next accounting period.

Correct AnswerverifiedShow Answer

Why is the balance in the Depreciation Expense account generally different from the balance in the Accumulated Depreciation account?

Correct AnswerverifiedShow Answer

The accrual adjustment recorded to adjust for expenses incurred but not yet paid will cause:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedPart aCredit balance accounts = Account...View AnswerShow Answer

Accounts Receivable should be increased for:

Correct AnswerverifiedShow Answer

Amortization is the concept that applies to the:

Correct AnswerverifiedShow Answer

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

Correct AnswerverifiedShow Answer

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Part a
Credit balance accounts = Account...
View Answer

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Correct Answer
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