Question 1

Which of the following is not a correct statement?

Accepted Answer

A)   Expense accounts are closed with credits.
B)   Revenue accounts are closed with debits.
C)   The Dividends account is closed with a credit.
D)   The Retained Earnings account is closed with a debit.E) All of the above
F) B) and C)

Question 2

If a company forgot to record depreciation on equipment for a period,Total Assets would be overstated and Total Stockholders' Equity would be understated on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

Adjustments help to ensure that all ______ are recorded in the period in which they are incurred.

Accepted Answer

A)   expenses
B)   cash transactions
C)   closing entries
D)   journal entriesE) B) and D)
F) C) and D)

Question 4

After the adjustments have been completed,the balance in the Rent Expense account represents the:

Accepted Answer

A)   amount of rent owed at the end of the accounting period
B)   mount of the future benefit remaining in the account
C)   cost of rent for the accounting period
D)   amount of cash paid this period for rent relating to any current or future periodE) All of the above
F) C) and D)

Question 5

If the Prepaid Rent account is not adjusted at the end of the period,what effect will this have on the financial statements?

Accepted Answer

A)   Liabilities will be overstated and net income will be understated.
B)   Assets will be understated and net income will be understated.
C)   Assets will be overstated and net income will be overstated.
D)   Cash will be overstated and net income will be overstated.E) A) and B)
F) None of the above

Question 6

Pinkney's Inc.had income before income tax of $164,000 last quarter and a 34% tax rate.What is the company's net income?

Accepted Answer

A)   $55,760
B)   $108,240
C)   $219,760
D)   $482,353E) All of the above
F) C) and D)

Question 7

At the end of the year,accrual adjustments could include a:

Accepted Answer

A)   debit to an expense and a credit to an asset.
B)   credit to a revenue and a debit to an expense.
C)   debit to cash and a credit to Common Stock.
D)   debit to an expense and a credit to a liability.E) A) and B)
F) A) and C)

Question 8

After the adjustments have been completed,the adjusted balance in the Accumulated Depreciation account represents the:

Accepted Answer

A)   current period's depreciation expense
B)   total depreciation taken on the long-lived assets since their purchase
C)   carrying value of the long-lived assets.
D)   decline in the market value of the long-lived assetsE) A) and B)
F) B) and D)

Question 9

Which of the following is a correct statement about the nature of equipment?

Accepted Answer

A)   While equipment is an asset, its use is recorded as an expense.
B)   While equipment is an asset, its use is recorded as a liability.
C)   While equipment is an asset; its use is recorded as affects Common Stock.
D)   Equipment and its use both affect liabilities.E) C) and D)
F) B) and D)

Question 10

A company reported Salaries and Wages Payable of $750 at the beginning of the year and $2,500 at the end of the year.The income statement for the year reported Salaries and Wages Expense of $56,200.How much cash was paid for salaries and wages during the year?

Accepted Answer

A)   $52,950
B)   $56,200
C)   $54,450
D)   $53,700E) A) and C)
F) B) and D)

Question 11

What are the effects on the accounting equation from the adjustment for salaries and wages incurred,but not yet paid,during the accounting period?

Accepted Answer

A)   Total liabilities will increase and total stockholders' equity will increase.
B)   Total liabilities will decrease and total stockholders' equity will increase.
C)   Total liabilities will decrease and total stockholders' equity will decrease.
D)   Total liabilities will increase and total stockholders' equity will decrease.E) A) and B)
F) A) and C)

Question 12

The carrying value of an asset is an approximation of the asset's market value.

Accepted Answer

A) True 
 B)False

Question 13

The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is unlikely to be affected by an adjusting entry?

Accepted Answer

A)   Interest Payable
B)   Supplies
C)   Unearned Revenue
D)   CashE) B) and D)
F) A) and B)

Question 14

If a company forgot to prepare an adjusting entry to record salaries and wages incurred but unpaid at the end of the period,Total Liabilities would be understated and Retained Earnings would be overstated on the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 15

During the company's first year of operations,supplies costing $5,800 were purchased and recorded in the Supplies account.At the end of the period,supplies costing $3,000 were left.What adjusting entry must be made to recorded?

Accepted Answer

A)   Debit Cash and credit Supplies for $3,000
B)   Debit Supplies Expense and credit Supplies for $5,800
C)   Debit Supplies and credit Supplies Expense for $2,800
D)   Debit Supplies Expense and credit Supplies for $2,800E) A) and D)
F) A) and B)

Question 16

A company billed a client for services performed on January 10.The customer paid one-half of the amount owed on January 20 and the other one-half on February 24.When should the company record the related Service Revenue?

Accepted Answer

A)   On January 10
B)   On January 20
C)   One-half on January 20 and the other half on February 24
D)   At year-end in an adjusting entryE) None of the above
F) A) and B)

Question 17

Which of these accounts would normally not be affected by an adjustment?

Accepted Answer

A)   The Supplies account.
B)   Revenue accounts.
C)   Expense accounts.
D)   The Cash Account.E) All of the above
F) B) and D)

Question 18

During the month,a company uses up $4,000 of supplies.At the end of the month,the related adjusting journal entry would result in a(n) :

Accepted Answer

A)   decrease in an asset and an equal decrease in expenses.
B)   increase in an asset and an equal increase in expenses.
C)   decrease in an asset and an equal increase in expenses.
D)   increase in an asset and a decrease in expenses.E) B) and D)
F) None of the above

Question 19

Your business purchased an investment security on April 1 that will pay $90 interest on June 30.Which of the following adjusting entries would be made on April 30?

Accepted Answer

A)   Debit Interest Receivable and credit Interest Revenue for $90
B)   Debit Interest Revenue and credit Interest Receivable for $30
C)   Debit Interest Receivable and credit Interest Revenue for $30
D)   Debit Interest Revenue and credit Interest Receivable for $90E) None of the above
F) All of the above

Question 20

All of the accounts of the Grass is Greener Company have been adjusted as of December 31,2016,with the exception of income taxes incurred but not yet recorded.Those account balances appear below.All have normal balances.The estimated income tax rate for the company is 40%.
  
Required:
Part a.Calculate the income before income tax.
Part b.Calculate the income tax expense.
Part c.Calculate the net income.

Accepted Answer

The answer of All of the accounts of the Grass...

Exam 4: Adjustments,financial Statements,and Financial Results

A company billed a client for services performed on January 10.The customer paid one-half of the amount owed on January 20 and the other one-half on February 24.When should the company record the related Service Revenue?

Correct Answer
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Which of these accounts would normally not be affected by an adjustment?

Correct Answer
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What are the effects on the accounting equation from the adjustment for salaries and wages incurred,but not yet paid,during the accounting period?

Correct Answer
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The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is unlikely to be affected by an adjusting entry?

Correct Answer
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Pinkney's Inc.had income before income tax of $164,000 last quarter and a 34% tax rate.What is the company's net income?

Correct Answer
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At the end of the year,accrual adjustments could include a:

Correct Answer
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The carrying value of an asset is an approximation of the asset's market value.

Correct Answer
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Which of the following is a correct statement about the nature of equipment?

Correct Answer
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After the adjustments have been completed,the balance in the Rent Expense account represents the:

Correct Answer
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If a company forgot to record depreciation on equipment for a period,Total Assets would be overstated and Total Stockholders' Equity would be understated on the balance sheet.

Correct Answer
verified

During the company's first year of operations,supplies costing $5,800 were purchased and recorded in the Supplies account.At the end of the period,supplies costing $3,000 were left.What adjusting entry must be made to recorded?

Correct Answer
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If the Prepaid Rent account is not adjusted at the end of the period,what effect will this have on the financial statements?

Correct Answer
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Correct Answer
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Your business purchased an investment security on April 1 that will pay $90 interest on June 30.Which of the following adjusting entries would be made on April 30?

Correct Answer
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A company reported Salaries and Wages Payable of $750 at the beginning of the year and $2,500 at the end of the year.The income statement for the year reported Salaries and Wages Expense of $56,200.How much cash was paid for salaries and wages during the year?

Correct Answer
verified

Adjustments help to ensure that all ______ are recorded in the period in which they are incurred.

Correct Answer
verified

Which of the following is not a correct statement?

Correct Answer
verified

During the month,a company uses up $4,000 of supplies.At the end of the month,the related adjusting journal entry would result in a(n) :

Correct Answer
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After the adjustments have been completed,the adjusted balance in the Accumulated Depreciation account represents the:

Correct Answer
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If a company forgot to prepare an adjusting entry to record salaries and wages incurred but unpaid at the end of the period,Total Liabilities would be understated and Retained Earnings would be overstated on the Balance Sheet.

Correct Answer
verified

Exam 4: Adjustments,financial Statements,and Financial Results

A company billed a client for services performed on January 10.The customer paid one-half of the amount owed on January 20 and the other one-half on February 24.When should the company record the related Service Revenue?

Correct AnswerverifiedShow Answer

Which of these accounts would normally not be affected by an adjustment?

Correct AnswerverifiedShow Answer

What are the effects on the accounting equation from the adjustment for salaries and wages incurred,but not yet paid,during the accounting period?

Correct AnswerverifiedShow Answer

The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is unlikely to be affected by an adjusting entry?

Correct AnswerverifiedShow Answer

Pinkney's Inc.had income before income tax of $164,000 last quarter and a 34% tax rate.What is the company's net income?

Correct AnswerverifiedShow Answer

At the end of the year,accrual adjustments could include a:

Correct AnswerverifiedShow Answer

The carrying value of an asset is an approximation of the asset's market value.

Correct AnswerverifiedShow Answer

Which of the following is a correct statement about the nature of equipment?

Correct AnswerverifiedShow Answer

After the adjustments have been completed,the balance in the Rent Expense account represents the:

Correct AnswerverifiedShow Answer

If a company forgot to record depreciation on equipment for a period,Total Assets would be overstated and Total Stockholders' Equity would be understated on the balance sheet.

Correct AnswerverifiedShow Answer

During the company's first year of operations,supplies costing $5,800 were purchased and recorded in the Supplies account.At the end of the period,supplies costing $3,000 were left.What adjusting entry must be made to recorded?

Correct AnswerverifiedShow Answer

If the Prepaid Rent account is not adjusted at the end of the period,what effect will this have on the financial statements?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Your business purchased an investment security on April 1 that will pay $90 interest on June 30.Which of the following adjusting entries would be made on April 30?

Correct AnswerverifiedShow Answer

A company reported Salaries and Wages Payable of $750 at the beginning of the year and $2,500 at the end of the year.The income statement for the year reported Salaries and Wages Expense of $56,200.How much cash was paid for salaries and wages during the year?

Correct AnswerverifiedShow Answer

Adjustments help to ensure that all ______ are recorded in the period in which they are incurred.

Correct AnswerverifiedShow Answer

Which of the following is not a correct statement?

Correct AnswerverifiedShow Answer

During the month,a company uses up $4,000 of supplies.At the end of the month,the related adjusting journal entry would result in a(n) :

Correct AnswerverifiedShow Answer

After the adjustments have been completed,the adjusted balance in the Accumulated Depreciation account represents the:

Correct AnswerverifiedShow Answer

If a company forgot to prepare an adjusting entry to record salaries and wages incurred but unpaid at the end of the period,Total Liabilities would be understated and Retained Earnings would be overstated on the Balance Sheet.

Correct AnswerverifiedShow Answer

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