Which of the following is not a step in the accounting process?
A. identification.
B. verification.
C. recording.
D. communication.
Verification
Which of the following statements about users of accounting information is incorrect?
A. Management is an internal user.
B. Taxing authorities are external users.
C. Present creditors are external users.
D. Regulatory authorities are internal users.
Regulatory authorities are internal users
The cost principle states that:
A. assets should be initially recorded at cost and adjusted when the market value changes.
B. activities of an entity are to be kept separate and distinct from its owner.
C. assets should be recorded at their cost.
D. only
assets should be recorded at their cost.
Which of the following statements about basic assumptions is correct?
A. Basic assumptions are the same as accounting principles.
B. The business entity concept states that there should be a particular unit of
accountability.
C. The monetary unit assumpti
The business entity concept states that there should be a particular unit of accountability.
Net income will result during a time period when:
A. assets exceed liabilities.
B. assets exceed revenues.
C. expenses exceed revenues.
D. revenues exceed expenses.
revenues exceed expenses
Performing services on account will have the following effects on the components of the basic
accounting equation:
A. increase assets and decrease owner's equity.
B. increase assets and increase owner's equity.
C. increase assets and increase liabilities.
Increase assets and owners equity
As of December 31, 2008 Stoneland Company has assets of $3,500 and owner's equity of
$2,000. What are the liabilities for Stoneland Company as of December 31, 2008?
A. $1,500.
B. $1,000.
C. $2,500.
D. $2,000.
$1500
On the last day of the period, Jim Otto Company buys a $900 machine on credit. This transaction
will affect the:
A. income statement only.
B. balance sheet only.
C. income statement and owner's equity statement only.
D. income statement, owner's equity st
balance sheet only
The financial statement that reports assets, liabilities, and owner's equity is the:
A. income statement.
B. owner's equity statement.
C. balance sheet.
D. statement of cash flow.
balance sheet
The objective of financial accounting is to:
A. provide relevant and timely information to employees and managers of the firm.
B. provide relevant and timely information for the decision-making needs of users outside
the business.
C. identify possible use
provide relevant and timely information for the decision-making needs of users outside
the business.
Which of the following best describes accounting?
A. can be thought of as the "language of business"
B. is of limited or little use to individuals outside of the business
C. records economic data but does not communicate the data to users
D. relies upon c
can be thought of as the "language of business
Within the United States, which of the following organizations has the primary responsibility for
developing accounting standards?
A. FASB
B. SEC
C. IASB
D. None of these choices
FASB
The accounting equation can be expressed in all of the following ways EXCEPT:
A. Assets = Liabilities + Owner's Equity.
B. Liabilities = Assets + Owner's Equity.
C. Liabilities = Assets - Owner's Equity.
D. Owner's Equity = Assets - Liabilities.
Liabilities = Assets + Owner's Equity.
Which of the following is true regarding business transactions?
A. All business transactions can be stated in terms of changes in the elements of the
accounting equation.
B. Business transactions do not have to be recorded in the books of the organization
All business transactions can be stated in terms of changes in the elements of the
accounting equation.
The financial statements, in the order in which they are prepared, are:
A. income statement, balance sheet, statement of owner's equity, and statement of cash
flows.
B. balance sheet, statement of owner's equity, income statement, and statement of cash
fl
income statement, statement of owner's equity, balance sheet, and statement of cash
flows.
The income statement:
A. reports the amount of an organization's assets, liabilities, and owner's equity at the end
of a period.
B. consists of three sections - (1) operating activities, (2) investing activities, and (3)
financing activities.
C. reports t
reports the revenues and expenses for a period of time based on the matching concept.
The owner's equity statement:
A. reports the amount of an organization's assets, liabilities, and owner's equity as of a
specific date.
B. consists of three sections - (1) operating activities, (2) investing activities, and (3)
financing activities.
C. re
reports the changes in owner's equity for a period of time.
Which of the following statements about an account is true?
a. In its simplest form, an account consists of two parts.
b. An account is an individual accounting record of increases and decreases in specific
asset, liability, and owner's equity items.
c. T
An account is an individual accounting record of increases and decreases in specific
asset, liability, and owner's equity items.
Debits:
a. increase both assets and liabilities.
b. decrease both assets and liabilities.
c. increase assets and decrease liabilities.
d. decrease assets and increase liabilities.
increase assets and decrease liabilities
A revenue account:
a. is increased by debits.
b. is decreased by credits.
c. has a normal balance of a debit.
d. is increased by credits.
. is increased by credits.
Accounts that normally have debit balances are:
a. assets, expenses, and revenues.
b. assets, expenses, and owner's capital.
c. assets, liabilities, and owner's drawings.
d. assets, owner's drawings, and expenses.
assets, owner's drawings, and expenses.
Which of the following statements about a journal is false?
a. It is the place where account balances are reported.
b. It provides a chronological record of transactions.
c. It helps to locate errors because the debit and credit amounts for each entry can
It is the place where account balances are reported.
. A ledger:
a. contains only asset and liability accounts.
b. should show accounts in alphabetical order.
c. is a collection of the entire group of accounts maintained by a company.
d. is a book of original entry.
is a collection of the entire group of accounts maintained by a company
Posting:
a. normally occurs before journalizing.
b. transfers ledger transaction data to the journal.
c. is an optional step in the recording process.
d. normally occurs after journalizing.
normally occurs after journalizing
A trial balance:
a. is a list of accounts with their balances at a given time.
b. proves the mathematical accuracy of journalized transactions.
c. will not balance if a correct journal entry is posted twice.
d. proves that all transactions have been recor
is a list of accounts with their balances at a given time
A trial balance will not balance if:
a. a correct journal entry is posted twice.
b. the purchase of supplies on account is debited to Supplies and credited to Cash.
c. a $100 cash drawing by the owner is debited to Owner's Drawing for $1,000 and credited
a $100 cash drawing by the owner is debited to Owner's Drawing for $1,000 and credited to Cash for $100.
An account, in its simplest form, is made up of which three parts?
a. a title, a debit side, and a credit side
b. a title, an entry side, and a balance side
c. a title, a debit side, and a balance side
d. a title, a credit side, and an entry side
a title, a debit side, and a credit side
The major types of accounts are:
a. asset, liability, drawing, revenue, and expense.
b. asset, liability, capital, drawing, revenue, and expense.
c. asset, liability, capital, revenue, and expense.
d. drawing, liability, capital, revenue, and expense.
asset, liability, capital, drawing, revenue, and expense.
Decreases in owner's equity from using up assets or consuming services attributable to business
activities are called:
a. drawings.
b. revenues.
c. expenses.
d. liabilities.
expenses.
. Every transaction affects at least two accounts. The purchase of land in exchange for cash is
recorded with which of the following entries?
a. debit to Cash and credit to Land
b. debit to Owner's Equity and credit to Cash
c. debit to Land and credit to
debit to Land and credit to Cash
A credit may represent a(n):
a. increase in an asset account.
b. increase in a liability account.
c. decrease in the capital account.
d. increase in an expense account
increase in a liability account
The process of transferring the debits and credits from the journal to the ledger accounts is
called:
a. two-column journal
b. posting
c. analysis
d. double-entry accounting
posting
A prepaid expense, such as the purchase of insurance for an upcoming period, is initially
recorded in the accounting system as:
a. an asset.
b. a liability.
c. an expense.
d. a revenue.
an asset.
Websavvy paid the electric and gas bill for the month in the amount of $325. What is the entry to
record this transaction?
a. debit to Cash, $325; credit to Utilities Expense, $325
b. debit to Utilities Expense, $325; credit to Cash, $325
c. debit to Acco
debit to Utilities Expense, $325; credit to Cash, $325
Which of the following errors will cause the trial balance totals to be unequal?
a. failing to record a transaction or post a transaction
b. recording the same erroneous amount for both the debit and the credit parts of a
transaction
c. posting a part of
posting the debit amount of the transaction correctly and posting the credit amount of the
transaction incorrectly
The revenue recognition concept states that:
A. revenue should be recognized in the accounting period in which it is earned.
B. expenses should be matched with revenues.
C. the economic life of a business can be divided into artificial time periods.
D. th
revenue should be recognized in the accounting period in which it is earned.
The principle or assumption dictating that efforts (expenses) be matched with accomplishments
(revenues) is the:
A. matching principle.
B. cost assumption.
C. periodicity principle.
D. revenue recognition principle.
matching principle
One of the following statements about the accrual basis of accounting is false. That statement is:
A. Events that change a company's financial statements are recorded in the periods in
which the events occur.
B. Revenue is recognized in the period in whic
Revenue is recorded only when cash is received, and expense is recorded only when
cash is paid.
Adjusting entries are made to ensure that:
A. expenses are recognized in the period in which they are incurred.
B. revenues are recorded in the period in which they are earned.
C. balance sheet and income statement accounts have correct balances at the en
all of the above
Each of the following is a major type (or category) of adjusting entries except:
A. prepaid expenses.
B. accrued revenues.
C. accrued expenses.
D. earned revenues.
earned revenue
The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on
hand at the end of the period, the adjusting entry is:
A. Supplies 600
Supplies Expense 600
B. Supplies 750
Supplies Expense 750
C. Supplies Expense 750
Supplies 7
Supplies Expense 750
Supplies 750
Adjustments for unearned revenues:
A. decrease liabilities and increase revenues.
B. have an assets and revenues account relationship.
C. increase assets and increase revenues.
D. decrease revenues and decrease assets.
decrease liabilities and increase revenues
Adjustments for accrued revenues:
A. have a liabilities and revenues account relationship.
B. have an assets and revenues account relationship.
C. decrease assets and revenues.
D. decrease liabilities and increase revenues.
have an assets and revenues account relationship
Kathy Siska earned a salary of $400 for the last week of September. She will be paid on October
1. The adjusting entry for Kathy's employer at September 30 is:
A. No entry is required.
B. Salaries Expense 400
Salaries Payable 400
C. Salaries Expense 400
C
Salaries Expense 400
Salaries Payable 400
Which of the following statements is incorrect concerning the adjusted trial balance?
A. An adjusted trial balance proves the equality of the total debit balances and the total
credit balances in the ledger after all adjustments are made.
B. The adjusted
The adjusted trial balance lists the account balances segregated by assets and liabilities.
If an adjusting journal entry to record supplies used was omitted then:
A. Assets would be understated.
B. Assets would be overstated.
C. Expenses would be overstated.
D. Net income would be understated
Assets would be overstated.
. An adjusting entry always affects:
A. at least one asset account and one liability account.
B. two different balance sheet accounts.
C. two different income statement accounts.
D. at least one income statement account and one balance sheet account
at least one income statement account and one balance sheet account.
Expense items that have been incurred but not yet recorded in the accounts are:
A. unearned revenues.
B. accrued expenses.
C. accrued revenues.
D. prepaid expenses.
accrued expenses
. Unrecorded revenues that have been earned but for which cash has not yet been received are:
A. accrued expenses.
B. unearned revenues.
C. accrued revenues.
D. prepaid expenses.
accrued revenues
Cheng Company has one year in unearned rent on the books in the amount of $3,000. The
money was received on December 1 in payment for a warehouse Cheng owns. What adjusting
entry related to unearned rent should Cheng record on the books at year-end?
A. de
debit to Unearned Rent, $250; credit to Rent Revenue, $250
Websavvy has a 5-day work week and pays weekly wages in the amount of $1,750. If December
31 falls on a Tuesday, what would be the adjusting entry to record the accrual of wages at yearend?
A. debit to Wages Expense, $350; credit to Wages Payable, $350
B.
debit to Wages Expense, $700; credit to Wages Payable, $700
Which of the following statements is NOT true about adjusting entries?
A. Adjusting entries are dated as of the last day of the period.
B. Adjusting entries are normally supported by an explanation.
C. Adjusting entries must be both journalized and posted
Omission of adjusting entries will have over- or understatement impacts on the income
statement but not the balance sheet.
Which statement about an adjusted trial balance is true?
A. An adjusted trial balance is completed after completing the financial statements.
B. If total debits equal total credits on an adjusted trial balance, it means that all account
balances are up-to
If the adjusted trial balance does not balance, then an error has been made
Which of the following statements is incorrect concerning the worksheet?
A. The worksheet is essentially a working tool of the accountant.
B. The worksheet is necessary to prepare the adjusted trial balance.
C. The worksheet cannot be used as a basis for
The worksheet is necessary to prepare the adjusted trial balance.
Which of the following types of accounts is not a temporary account?
A. capital
B. drawing
C. expense
D. revenue
capital
An account that will have a zero balance after closing entries have been journalized and posted
is:
A. Service Revenue.
B. Advertising Supplies.
C. Prepaid Insurance.
D. Accumulated Depreciation
service revenue
When a net loss has occurred, Income Summary is:
A. debited and Owner's Capital is credited.
B. credited and Owner's Capital is debited.
C. debited and Owner's Drawing is credited.
D. credited and Owner's Drawing is debited.
credited and Owner's Capital is debited.
The closing process involves separate entries to close (1) expenses, (2) drawings, (3) revenues,
and (4) income summary. The correct sequencing of the entries is:
A. (4), (3), (2), (1)
B. (1), (2), (3), (4)
C. (3), (1), (4), (2)
D. (3), (2), (1), (4)
(3), (1), (4), (2)
Which types of accounts will appear in the post-closing trial balance?
A. Permanent (real) accounts.
B. Temporary (nominal) accounts.
C. Accounts shown in the income statement columns of a worksheet.
D. None of the above.
Permanent (real) accounts.
All of the following are required steps in the accounting cycle except:
A. journalizing and posting closing entries.
B. preparing financial statements.
C. journalizing the transactions.
D. preparing a worksheet.
preparing a worksheet.
Cash of $100 received at the time the service was provided was journalized and posted as a
debit to Cash $100 and a credit to Accounts Receivable $100. Assuming the incorrect entry is not
reversed, the correcting entry is:
A. debit Service Revenue $100 an
debit Accounts Receivable $100 and credit Service Revenue $100.
In a classified balance sheet, assets are usually classified using the following categories:
A. current assets; long-term assets; property, plant, and equipment; and intangible assets.
B. current assets; long-term investments; property, plant, and equipme
current assets; long-term investments; property, plant, and equipment; and intangible
assets.
Current assets are listed:
A. by liquidity.
B. by importance.
C. by longevity.
D. alphabetically.
by liquidity
. On December 31, Frank Voris Company correctly made an adjusting entry to recognize $2,000 of
accrued salaries payable. On January 8 of the next year, total salaries of $3,400 were paid.
Assuming the correct reversing entry was made on January 1, the ent
Salaries Payable $2,000 and Salaries Expense $1,400.
Which of the following is true regarding the flow of data from the Adjusted Trial Balance
columns of the end-of-period spreadsheet to the financial statements?
A. The balance of the owner's capital account will flow into the balance sheet.
B. The balance
The balance of the owner's drawing account will flow into the statement of owner's
equity.
Two common classifications of assets are:
A. current assets and current liabilities.
B. current assets and property, plant, and equipment.
C. current liabilities and long-term liabilities.
D. property, plant, and equipment and long-term liabilities.
current assets and property, plant, and equipment.
Two common classifications of liabilities are:
A. current assets and current liabilities.
B. current assets and property, plant, and equipment.
C. current liabilities and long-term liabilities.
D. property, plant, and equipment and long-term liabilities.
current liabilities and long-term liabilities.
. Which if the following is NOT true about closing entries?
A. Closing entries move the balances of temporary accounts to the owner's capital
account.
B. Closing entries are an optional step in the accounting cycle.
C. Closing entries are made later in th
Closing entries are an optional step in the accounting cycle
Which account would appear in the post-closing trial balance?
A. Salaries Payable
B. Supplies Expense
C. Depreciation Expense
D. Fees Earned
salaries payable
The entry to close revenue account(s) will include a:
A. debit to the revenue account(s).
B. credit to the revenue account(s).
C. debit to Income Summary.
D. credit to Cash.
salaries payable
The process that begins with analyzing and journalizing transactions is called the:
A. accounting cycle.
B. ledger cycle.
C. balance cycle.
D. operating cycle.
accounting cycle
Which of the following is not a step in the accounting process?
A. identification.
B. verification.
C. recording.
D. communication.
Verification
Which of the following statements about users of accounting information is incorrect?
A. Management is an internal user.
B. Taxing authorities are external users.
C. Present creditors are external users.
D. Regulatory authorities are internal users.
Regulatory authorities are internal users
The cost principle states that:
A. assets should be initially recorded at cost and adjusted when the market value changes.
B. activities of an entity are to be kept separate and distinct from its owner.
C. assets should be recorded at their cost.
D. only
assets should be recorded at their cost.
Which of the following statements about basic assumptions is correct?
A. Basic assumptions are the same as accounting principles.
B. The business entity concept states that there should be a particular unit of
accountability.
C. The monetary unit assumpti
The business entity concept states that there should be a particular unit of accountability.
Net income will result during a time period when:
A. assets exceed liabilities.
B. assets exceed revenues.
C. expenses exceed revenues.
D. revenues exceed expenses.
revenues exceed expenses
Performing services on account will have the following effects on the components of the basic
accounting equation:
A. increase assets and decrease owner's equity.
B. increase assets and increase owner's equity.
C. increase assets and increase liabilities.
Increase assets and owners equity
As of December 31, 2008 Stoneland Company has assets of $3,500 and owner's equity of
$2,000. What are the liabilities for Stoneland Company as of December 31, 2008?
A. $1,500.
B. $1,000.
C. $2,500.
D. $2,000.
$1500
On the last day of the period, Jim Otto Company buys a $900 machine on credit. This transaction
will affect the:
A. income statement only.
B. balance sheet only.
C. income statement and owner's equity statement only.
D. income statement, owner's equity st
balance sheet only
The financial statement that reports assets, liabilities, and owner's equity is the:
A. income statement.
B. owner's equity statement.
C. balance sheet.
D. statement of cash flow.
balance sheet
The objective of financial accounting is to:
A. provide relevant and timely information to employees and managers of the firm.
B. provide relevant and timely information for the decision-making needs of users outside
the business.
C. identify possible use
provide relevant and timely information for the decision-making needs of users outside
the business.
Which of the following best describes accounting?
A. can be thought of as the "language of business"
B. is of limited or little use to individuals outside of the business
C. records economic data but does not communicate the data to users
D. relies upon c
can be thought of as the "language of business
Within the United States, which of the following organizations has the primary responsibility for
developing accounting standards?
A. FASB
B. SEC
C. IASB
D. None of these choices
FASB
The accounting equation can be expressed in all of the following ways EXCEPT:
A. Assets = Liabilities + Owner's Equity.
B. Liabilities = Assets + Owner's Equity.
C. Liabilities = Assets - Owner's Equity.
D. Owner's Equity = Assets - Liabilities.
Liabilities = Assets + Owner's Equity.
Which of the following is true regarding business transactions?
A. All business transactions can be stated in terms of changes in the elements of the
accounting equation.
B. Business transactions do not have to be recorded in the books of the organization
All business transactions can be stated in terms of changes in the elements of the
accounting equation.
The financial statements, in the order in which they are prepared, are:
A. income statement, balance sheet, statement of owner's equity, and statement of cash
flows.
B. balance sheet, statement of owner's equity, income statement, and statement of cash
fl
income statement, statement of owner's equity, balance sheet, and statement of cash
flows.
The income statement:
A. reports the amount of an organization's assets, liabilities, and owner's equity at the end
of a period.
B. consists of three sections - (1) operating activities, (2) investing activities, and (3)
financing activities.
C. reports t
reports the revenues and expenses for a period of time based on the matching concept.
The owner's equity statement:
A. reports the amount of an organization's assets, liabilities, and owner's equity as of a
specific date.
B. consists of three sections - (1) operating activities, (2) investing activities, and (3)
financing activities.
C. re
reports the changes in owner's equity for a period of time.
Which of the following statements about an account is true?
a. In its simplest form, an account consists of two parts.
b. An account is an individual accounting record of increases and decreases in specific
asset, liability, and owner's equity items.
c. T
An account is an individual accounting record of increases and decreases in specific
asset, liability, and owner's equity items.
Debits:
a. increase both assets and liabilities.
b. decrease both assets and liabilities.
c. increase assets and decrease liabilities.
d. decrease assets and increase liabilities.
increase assets and decrease liabilities
A revenue account:
a. is increased by debits.
b. is decreased by credits.
c. has a normal balance of a debit.
d. is increased by credits.
. is increased by credits.
Accounts that normally have debit balances are:
a. assets, expenses, and revenues.
b. assets, expenses, and owner's capital.
c. assets, liabilities, and owner's drawings.
d. assets, owner's drawings, and expenses.
assets, owner's drawings, and expenses.
Which of the following statements about a journal is false?
a. It is the place where account balances are reported.
b. It provides a chronological record of transactions.
c. It helps to locate errors because the debit and credit amounts for each entry can
It is the place where account balances are reported.
. A ledger:
a. contains only asset and liability accounts.
b. should show accounts in alphabetical order.
c. is a collection of the entire group of accounts maintained by a company.
d. is a book of original entry.
is a collection of the entire group of accounts maintained by a company
Posting:
a. normally occurs before journalizing.
b. transfers ledger transaction data to the journal.
c. is an optional step in the recording process.
d. normally occurs after journalizing.
normally occurs after journalizing
A trial balance:
a. is a list of accounts with their balances at a given time.
b. proves the mathematical accuracy of journalized transactions.
c. will not balance if a correct journal entry is posted twice.
d. proves that all transactions have been recor
is a list of accounts with their balances at a given time
A trial balance will not balance if:
a. a correct journal entry is posted twice.
b. the purchase of supplies on account is debited to Supplies and credited to Cash.
c. a $100 cash drawing by the owner is debited to Owner's Drawing for $1,000 and credited
a $100 cash drawing by the owner is debited to Owner's Drawing for $1,000 and credited to Cash for $100.
An account, in its simplest form, is made up of which three parts?
a. a title, a debit side, and a credit side
b. a title, an entry side, and a balance side
c. a title, a debit side, and a balance side
d. a title, a credit side, and an entry side
a title, a debit side, and a credit side
The major types of accounts are:
a. asset, liability, drawing, revenue, and expense.
b. asset, liability, capital, drawing, revenue, and expense.
c. asset, liability, capital, revenue, and expense.
d. drawing, liability, capital, revenue, and expense.
asset, liability, capital, drawing, revenue, and expense.
Decreases in owner's equity from using up assets or consuming services attributable to business
activities are called:
a. drawings.
b. revenues.
c. expenses.
d. liabilities.
expenses.
. Every transaction affects at least two accounts. The purchase of land in exchange for cash is
recorded with which of the following entries?
a. debit to Cash and credit to Land
b. debit to Owner's Equity and credit to Cash
c. debit to Land and credit to
debit to Land and credit to Cash
A credit may represent a(n):
a. increase in an asset account.
b. increase in a liability account.
c. decrease in the capital account.
d. increase in an expense account
increase in a liability account
The process of transferring the debits and credits from the journal to the ledger accounts is
called:
a. two-column journal
b. posting
c. analysis
d. double-entry accounting
posting
A prepaid expense, such as the purchase of insurance for an upcoming period, is initially
recorded in the accounting system as:
a. an asset.
b. a liability.
c. an expense.
d. a revenue.
an asset.
Websavvy paid the electric and gas bill for the month in the amount of $325. What is the entry to
record this transaction?
a. debit to Cash, $325; credit to Utilities Expense, $325
b. debit to Utilities Expense, $325; credit to Cash, $325
c. debit to Acco
debit to Utilities Expense, $325; credit to Cash, $325
Which of the following errors will cause the trial balance totals to be unequal?
a. failing to record a transaction or post a transaction
b. recording the same erroneous amount for both the debit and the credit parts of a
transaction
c. posting a part of
posting the debit amount of the transaction correctly and posting the credit amount of the
transaction incorrectly
The revenue recognition concept states that:
A. revenue should be recognized in the accounting period in which it is earned.
B. expenses should be matched with revenues.
C. the economic life of a business can be divided into artificial time periods.
D. th
revenue should be recognized in the accounting period in which it is earned.
The principle or assumption dictating that efforts (expenses) be matched with accomplishments
(revenues) is the:
A. matching principle.
B. cost assumption.
C. periodicity principle.
D. revenue recognition principle.
matching principle
One of the following statements about the accrual basis of accounting is false. That statement is:
A. Events that change a company's financial statements are recorded in the periods in
which the events occur.
B. Revenue is recognized in the period in whic
Revenue is recorded only when cash is received, and expense is recorded only when
cash is paid.
Adjusting entries are made to ensure that:
A. expenses are recognized in the period in which they are incurred.
B. revenues are recorded in the period in which they are earned.
C. balance sheet and income statement accounts have correct balances at the en
all of the above
Each of the following is a major type (or category) of adjusting entries except:
A. prepaid expenses.
B. accrued revenues.
C. accrued expenses.
D. earned revenues.
earned revenue
The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on
hand at the end of the period, the adjusting entry is:
A. Supplies 600
Supplies Expense 600
B. Supplies 750
Supplies Expense 750
C. Supplies Expense 750
Supplies 7
Supplies Expense 750
Supplies 750
Adjustments for unearned revenues:
A. decrease liabilities and increase revenues.
B. have an assets and revenues account relationship.
C. increase assets and increase revenues.
D. decrease revenues and decrease assets.
decrease liabilities and increase revenues
Adjustments for accrued revenues:
A. have a liabilities and revenues account relationship.
B. have an assets and revenues account relationship.
C. decrease assets and revenues.
D. decrease liabilities and increase revenues.
have an assets and revenues account relationship
Kathy Siska earned a salary of $400 for the last week of September. She will be paid on October
1. The adjusting entry for Kathy's employer at September 30 is:
A. No entry is required.
B. Salaries Expense 400
Salaries Payable 400
C. Salaries Expense 400
C
Salaries Expense 400
Salaries Payable 400
Which of the following statements is incorrect concerning the adjusted trial balance?
A. An adjusted trial balance proves the equality of the total debit balances and the total
credit balances in the ledger after all adjustments are made.
B. The adjusted
The adjusted trial balance lists the account balances segregated by assets and liabilities.
If an adjusting journal entry to record supplies used was omitted then:
A. Assets would be understated.
B. Assets would be overstated.
C. Expenses would be overstated.
D. Net income would be understated
Assets would be overstated.
. An adjusting entry always affects:
A. at least one asset account and one liability account.
B. two different balance sheet accounts.
C. two different income statement accounts.
D. at least one income statement account and one balance sheet account
at least one income statement account and one balance sheet account.
Expense items that have been incurred but not yet recorded in the accounts are:
A. unearned revenues.
B. accrued expenses.
C. accrued revenues.
D. prepaid expenses.
accrued expenses
. Unrecorded revenues that have been earned but for which cash has not yet been received are:
A. accrued expenses.
B. unearned revenues.
C. accrued revenues.
D. prepaid expenses.
accrued revenues
Cheng Company has one year in unearned rent on the books in the amount of $3,000. The
money was received on December 1 in payment for a warehouse Cheng owns. What adjusting
entry related to unearned rent should Cheng record on the books at year-end?
A. de
debit to Unearned Rent, $250; credit to Rent Revenue, $250
Websavvy has a 5-day work week and pays weekly wages in the amount of $1,750. If December
31 falls on a Tuesday, what would be the adjusting entry to record the accrual of wages at yearend?
A. debit to Wages Expense, $350; credit to Wages Payable, $350
B.
debit to Wages Expense, $700; credit to Wages Payable, $700
Which of the following statements is NOT true about adjusting entries?
A. Adjusting entries are dated as of the last day of the period.
B. Adjusting entries are normally supported by an explanation.
C. Adjusting entries must be both journalized and posted
Omission of adjusting entries will have over- or understatement impacts on the income
statement but not the balance sheet.
Which statement about an adjusted trial balance is true?
A. An adjusted trial balance is completed after completing the financial statements.
B. If total debits equal total credits on an adjusted trial balance, it means that all account
balances are up-to
If the adjusted trial balance does not balance, then an error has been made
Which of the following statements is incorrect concerning the worksheet?
A. The worksheet is essentially a working tool of the accountant.
B. The worksheet is necessary to prepare the adjusted trial balance.
C. The worksheet cannot be used as a basis for
The worksheet is necessary to prepare the adjusted trial balance.
Which of the following types of accounts is not a temporary account?
A. capital
B. drawing
C. expense
D. revenue
capital
An account that will have a zero balance after closing entries have been journalized and posted
is:
A. Service Revenue.
B. Advertising Supplies.
C. Prepaid Insurance.
D. Accumulated Depreciation
service revenue
When a net loss has occurred, Income Summary is:
A. debited and Owner's Capital is credited.
B. credited and Owner's Capital is debited.
C. debited and Owner's Drawing is credited.
D. credited and Owner's Drawing is debited.
credited and Owner's Capital is debited.
The closing process involves separate entries to close (1) expenses, (2) drawings, (3) revenues,
and (4) income summary. The correct sequencing of the entries is:
A. (4), (3), (2), (1)
B. (1), (2), (3), (4)
C. (3), (1), (4), (2)
D. (3), (2), (1), (4)
(3), (1), (4), (2)
Which types of accounts will appear in the post-closing trial balance?
A. Permanent (real) accounts.
B. Temporary (nominal) accounts.
C. Accounts shown in the income statement columns of a worksheet.
D. None of the above.
Permanent (real) accounts.
All of the following are required steps in the accounting cycle except:
A. journalizing and posting closing entries.
B. preparing financial statements.
C. journalizing the transactions.
D. preparing a worksheet.
preparing a worksheet.
Cash of $100 received at the time the service was provided was journalized and posted as a
debit to Cash $100 and a credit to Accounts Receivable $100. Assuming the incorrect entry is not
reversed, the correcting entry is:
A. debit Service Revenue $100 an
debit Accounts Receivable $100 and credit Service Revenue $100.
In a classified balance sheet, assets are usually classified using the following categories:
A. current assets; long-term assets; property, plant, and equipment; and intangible assets.
B. current assets; long-term investments; property, plant, and equipme
current assets; long-term investments; property, plant, and equipment; and intangible
assets.
Current assets are listed:
A. by liquidity.
B. by importance.
C. by longevity.
D. alphabetically.
by liquidity
. On December 31, Frank Voris Company correctly made an adjusting entry to recognize $2,000 of
accrued salaries payable. On January 8 of the next year, total salaries of $3,400 were paid.
Assuming the correct reversing entry was made on January 1, the ent
Salaries Payable $2,000 and Salaries Expense $1,400.
Which of the following is true regarding the flow of data from the Adjusted Trial Balance
columns of the end-of-period spreadsheet to the financial statements?
A. The balance of the owner's capital account will flow into the balance sheet.
B. The balance
The balance of the owner's drawing account will flow into the statement of owner's
equity.
Two common classifications of assets are:
A. current assets and current liabilities.
B. current assets and property, plant, and equipment.
C. current liabilities and long-term liabilities.
D. property, plant, and equipment and long-term liabilities.
current assets and property, plant, and equipment.
Two common classifications of liabilities are:
A. current assets and current liabilities.
B. current assets and property, plant, and equipment.
C. current liabilities and long-term liabilities.
D. property, plant, and equipment and long-term liabilities.
current liabilities and long-term liabilities.
. Which if the following is NOT true about closing entries?
A. Closing entries move the balances of temporary accounts to the owner's capital
account.
B. Closing entries are an optional step in the accounting cycle.
C. Closing entries are made later in th
Closing entries are an optional step in the accounting cycle
Which account would appear in the post-closing trial balance?
A. Salaries Payable
B. Supplies Expense
C. Depreciation Expense
D. Fees Earned
salaries payable
The entry to close revenue account(s) will include a:
A. debit to the revenue account(s).
B. credit to the revenue account(s).
C. debit to Income Summary.
D. credit to Cash.
salaries payable
The process that begins with analyzing and journalizing transactions is called the:
A. accounting cycle.
B. ledger cycle.
C. balance cycle.
D. operating cycle.
accounting cycle