Question 1

On December 31, Chu Company had performed $3,000 of management services for clients that had not yet been billed. Prepare Chu's adjusting entry to record these fees earned.

Accepted Answer

The answer of On December 31, Chu Company had performed...

Question 2

Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working day. They are paid on Monday for the five-day workweek ending on the previous Friday. Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. The adjusting entry needed on December 31 is:

Accepted Answer

A)  Debit Salaries Expense, $5,400; credit Cash, $5,400.
B)  Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400.
C)  Debit Salaries Payable, $5,400; credit Salaries Expense, $5,400.
D)  Debit Salaries Expense, $9,000; credit Salaries Payable, $9,000.
E)  Debit Salaries Expense, $3,600; credit Salaries Payable, $3,600.F) B) and D)
G) All of the above

Question 3

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

Accepted Answer

A)  Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
B)  Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
C)  Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
D)  Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.
E)  Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.F) None of the above
G) B) and E)

Question 4

An adjusting entry could be made for each of the following except:

Accepted Answer

A)  Unearned revenues.
B)  Accrued expenses.
C)  Depreciation.
D)  Prepaid expenses.
E)  Owner investments.F) B) and C)
G) C) and E)

Question 5

A company owes its employees $5,000 for the year ended December 31. It will pay employees on January 6 for the previous two weeks' salaries. The year-end adjusting entry on December 31 will include a debit to Salaries Expense and a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 6

Torsten had total assets of $149,501,000, net income of $6,242,000, and net sales of $209,203,000. Its profit margin was 2.98%.

Accepted Answer

A) True 
 B)False

Question 7

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

Question 8

On October 15, a company received $15,000 cash as a down payment on a consulting contract. The amount was credited to Unearned Consulting Revenue. By October 31, 10% of the services required by the contract were completed. The company will record consulting revenue of $1,500 from this contract for October.

Accepted Answer

A) True 
 B)False

Question 9

The time period assumption assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.

Accepted Answer

A) True 
 B)False

Question 10

The adjusting entry to record an accrued expense is:

Accepted Answer

A)  Decrease a liability; increase revenue.
B)  Increase an expense; increase a liability.
C)  Increase an expense; decrease a liability.
D)  Increase an asset; increase revenue.
E)  Increase an expense; decrease an asset.F) A) and E)
G) A) and B)

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)  Intangible asset.
B)  Contra account.
C)  Accrued revenue.
D)  Accrued expense.
E)  Adjunct account.F) A) and E)
G) A) and B)

Question 12

The length of time covered by a set of periodic financial statements, primarily a year for most companies, is referred to as the:

Accepted Answer

A)  Calendar year.
B)  Accounting period.
C)  Business cycle.
D)  Fiscal year.
E)  Natural business year.F) None of the above
G) A) and C)

Question 13

Describe the adjusting entries, including the accounts used, for 1)prepaid expenses, 2)depreciation and 3)unearned revenues.

Accepted Answer

1)Prepaid expenses are deferrals, or exp...

Question 14

On December 14, Branch Company received $3,000 cash for 30 days of consulting services that will be completed on January 13. Branch records all such prepayments by customers in a liability account. Prepare the December 31 adjusting entry.

Accepted Answer

The answer of On December 14, Branch Company received $3,000...

Question 15

The entry to record a cash receipt from a customer when the service is to be provided in a future period involves a debit to an unearned revenue account.

Accepted Answer

A) True 
 B)False

Question 16

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 Cash $400.
C)  Debit Salaries Payable $400 and credit Salaries Expense $400.
D)  Debit Salaries Expense $600 and credit Salaries Payable $600.
E)  Debit Salaries Expense $400 and credit Salaries Payable $400.F) B) and D)
G) B) and E)

Question 17

The adjusting entry to record an accrued revenue is:

Accepted Answer

A)  Increase an expense; decrease an asset.
B)  Decrease a liability; increase revenue.
C)  Increase an expense; increase a liability.
D)  Increase an expense; decrease a liability.
E)  Increase an asset; increase revenue.F) A) and C)
G) B) and D)

Question 18

Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:

Accepted Answer

A)  Decrease a liability; increase revenue.
B)  Increase an expense; increase a liability.
C)  Increase an expense; decrease a liability.
D)  Increase an asset; increase revenue.
E)  Increase an expense; decrease an asset.F) A) and D)
G) A) and C)

Question 19

Depreciation expense is an example of an accrued expense.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following assets is not depreciated?

Accepted Answer

A)  Land.
B)  Buildings.
C)  Equipment.
D)  Store fixtures.
E)  Computers.F) None of the above
G) C) and E)

Exam 3: Adjusting Accounts and Preparing Financial Statements

The entry to record a cash receipt from a customer when the service is to be provided in a future period involves a debit to an unearned revenue account.

Correct Answer
verified

The adjusting entry to record an accrued revenue is:

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
verified

An adjusting entry could be made for each of the following except:

Correct Answer
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The adjusting entry to record an accrued expense is:

Correct Answer
verified

A company owes its employees $5,000 for the year ended December 31. It will pay employees on January 6 for the previous two weeks' salaries. The year-end adjusting entry on December 31 will include a debit to Salaries Expense and a credit to Cash.

Correct Answer
verified

Depreciation expense is an example of an accrued expense.

Correct Answer
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Correct Answer
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Correct Answer
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On December 14, Branch Company received $3,000 cash for 30 days of consulting services that will be completed on January 13. Branch records all such prepayments by customers in a liability account. Prepare the December 31 adjusting entry.

Correct Answer
verified

Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:

Correct Answer
verified

Which of the following assets is not depreciated?

Correct Answer
verified

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

Correct Answer
verified

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
verified

The time period assumption assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.

Correct Answer
verified

Torsten had total assets of $149,501,000, net income of $6,242,000, and net sales of $209,203,000. Its profit margin was 2.98%.

Correct Answer
verified

On December 31, Chu Company had performed $3,000 of management services for clients that had not yet been billed. Prepare Chu's adjusting entry to record these fees earned.

Correct Answer
verified

The length of time covered by a set of periodic financial statements, primarily a year for most companies, is referred to as the:

Correct Answer
verified

Correct Answer
verified

Describe the adjusting entries, including the accounts used, for 1)prepaid expenses, 2)depreciation and 3)unearned revenues.

Correct Answer
verified
1)Prepaid expenses are deferrals, or exp...
View Answer

Exam 3: Adjusting Accounts and Preparing Financial Statements

The entry to record a cash receipt from a customer when the service is to be provided in a future period involves a debit to an unearned revenue account.

Correct AnswerverifiedShow Answer

The adjusting entry to record an accrued revenue is:

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

An adjusting entry could be made for each of the following except:

Correct AnswerverifiedShow Answer

The adjusting entry to record an accrued expense is:

Correct AnswerverifiedShow Answer

A company owes its employees $5,000 for the year ended December 31. It will pay employees on January 6 for the previous two weeks' salaries. The year-end adjusting entry on December 31 will include a debit to Salaries Expense and a credit to Cash.

Correct AnswerverifiedShow Answer

Depreciation expense is an example of an accrued expense.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On December 14, Branch Company received $3,000 cash for 30 days of consulting services that will be completed on January 13. Branch records all such prepayments by customers in a liability account. Prepare the December 31 adjusting entry.

Correct AnswerverifiedShow Answer

Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:

Correct AnswerverifiedShow Answer

Which of the following assets is not depreciated?

Correct AnswerverifiedShow Answer

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

Correct AnswerverifiedShow Answer

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 time period assumption assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.

Correct AnswerverifiedShow Answer

Torsten had total assets of $149,501,000, net income of $6,242,000, and net sales of $209,203,000. Its profit margin was 2.98%.

Correct AnswerverifiedShow Answer

On December 31, Chu Company had performed $3,000 of management services for clients that had not yet been billed. Prepare Chu's adjusting entry to record these fees earned.

Correct AnswerverifiedShow Answer

The length of time covered by a set of periodic financial statements, primarily a year for most companies, is referred to as the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Describe the adjusting entries, including the accounts used, for 1)prepaid expenses, 2)depreciation and 3)unearned revenues.

Correct Answerverified1)Prepaid expenses are deferrals, or exp...View AnswerShow Answer

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1)Prepaid expenses are deferrals, or exp...
View Answer