Question 1

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

Accepted Answer

The answer of A _____________ account is an account linked...

Question 2

Explain how accounting adjustments affect financial statements.

Accepted Answer

Without accounting adjustments many acco...

Question 3

List the steps in the accounting cycle.

Accepted Answer

The accounting cycle consists of 10 step...

Question 4

How is a classified balance sheet different from an unclassified balance sheet? List the order of the usual classifications on a classified balance sheet.

Accepted Answer

An unclassified balance sheet broadly gr...

Question 5

An account linked with another account that has an opposite normal balance and that 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 accountF) B) and D)
G) A) and E)

Question 6

IFRS tends to be more principles-based compared with GAAP,which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

Accepted Answer

A)   A principles-based system eliminates the need for internal controls.
B)   A principles-based system is significantly weaker than a rules-based system.
C)   A principles-based system will eliminate all fraud.
D)   A principles-based system is a way to calculate interest receivable or payable.
E)   A principles-based system depends heavily on control procedures to reduce the potential for fraud or misconduct.F) B) and E)
G) A) and E)

Question 7

Match the following types of accounts with each of the following transactions.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30">_TB6312_00...

Question 8

On December 31,the balance in the Prepaid Subscription account was $648.This is the remaining balance of a 12-month subscription purchased on September 30 in the current year.How much did this subscription originally cost?

Accepted Answer

A)   $72
B)   $648
C)   $7,776
D)   $864
E)   $1,512F) All of the above
G) B) and E)

Question 9

In general journal form,record the December 31 adjusting entries for the following transactions and events.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 three-year fire insurance policy that was purchased on October 1 of the current year.
b.The Office 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 office equipment is $600.
e.Accrued salaries amount to $400.

Accepted Answer

None...

Question 10

The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.

Accepted Answer

A) True 
 B)False

Question 11

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Accepted Answer

A) True 
 B)False

Question 12

The adjusted trial balance contains information pertaining to:

Accepted Answer

A)   Asset accounts only.
B)   Balance sheet accounts only.
C)   Income statement accounts only.
D)   All general ledger accounts.
E)   Revenue accounts only.F) C) and E)
G) A) and B)

Question 13

If a company records prepayment of expenses in an asset account,the adjusting entry would:

Accepted Answer

A)   Result in a debit to an expense and a credit to an asset account.
B)   Cause an adjustment to prior expense to be overstated and assets to be understated.
C)   Cause an accrued liability account to exist.
D)   Result in a debit to a liability and a credit to an asset account.
E)   Decrease cash.F) B) and D)
G) A) and B)

Question 14

Which of the following does not require an adjusting entry at year-end?

Accepted Answer

A)   Accrued interest on notes payable.
B)   Supplies used during the period.
C)   Cash investments by stockholders.
D)   Accrued wages.
E)   Expired portion of prepaid insurance.F) A) and B)
G) C) and D)

Question 15

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Accepted Answer

A)   2%
B)   20%
C)   200%
D)   500%
E)   $8,000F) C) and E)
G) B) and C)

Question 16

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Accepted Answer

A)     Income Summary 13,000 Retained earnings 13,000\begin{array} { | c | r | r | } \hline 	ext { Income Summary } & 13,000 & \\hline 	ext { Retained earnings } & & 13,000 \\hline\end{array} Income Summary  Retained earnings ​13,000​13,000​​ 
B)     Income Summary 75,000 Revenues 75,000\begin{array} { | c | c | c | } \hline 	ext { Income Summary } & 75,000 & \\hline 	ext { Revenues } & & 75,000 \\hline\end{array} Income Summary  Revenues ​75,000​75,000​​ 
C)     Revenues 75,000 Income Summary 75,000\begin{array}{|l|r|r|}\hline 	ext { Revenues } & 75,000 & \\hline 	ext { Income Summary } & & 75,000 \\hline\end{array} Revenues  Income Summary ​75,000​75,000​​ 
D)     Income Summary 62,000 Expenses 62,000\begin{array} { | c | r | r | } \hline 	ext { Income Summary } & 62,000 & \\hline 	ext { Expenses } & & 62,000 \\hline\end{array} Income Summary  Expenses ​62,000​62,000​​ 
E)     Retained Earnings 1,000 Dividends 1,000\begin{array} { | c | r | r | } \hline 	ext { Retained Earnings } & 1,000 & \\hline 	ext { Dividends } & & 1,000 \\hline\end{array} Retained Earnings  Dividends ​1,000​1,000​​F) B) and D)
G) A) and B)

Exam 3: Adjusting Accounts and Preparing Financial Statements

List the steps in the accounting cycle.

Correct Answer
verified
The accounting cycle consists of 10 step...
View Answer

Explain how accounting adjustments affect financial statements.

Correct Answer
verified
Without accounting adjustments many acco...
View Answer

How is a classified balance sheet different from an unclassified balance sheet? List the order of the usual classifications on a classified balance sheet.

Correct Answer
verified
An unclassified balance sheet broadly gr...
View Answer

Which of the following does not require an adjusting entry at year-end?

Correct Answer
verified

The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.

Correct Answer
verified

If a company records prepayment of expenses in an asset account,the adjusting entry would:

Correct Answer
verified

IFRS tends to be more principles-based compared with GAAP,which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

Correct Answer
verified

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Correct Answer
verified

Correct Answer
verified
None...
View Answer

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Correct Answer
verified

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

Correct Answer
verified

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Correct Answer
verified

The adjusted trial balance contains information pertaining to:

Correct Answer
verified

Match the following types of accounts with each of the following transactions.

Correct Answer
verified
_TB6312_00...
View Answer

On December 31,the balance in the Prepaid Subscription account was $648.This is the remaining balance of a 12-month subscription purchased on September 30 in the current year.How much did this subscription originally cost?

Correct Answer
verified

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

Correct Answer
verified

Exam 3: Adjusting Accounts and Preparing Financial Statements

List the steps in the accounting cycle.

Correct AnswerverifiedThe accounting cycle consists of 10 step...View AnswerShow Answer

Explain how accounting adjustments affect financial statements.

Correct AnswerverifiedWithout accounting adjustments many acco...View AnswerShow Answer

How is a classified balance sheet different from an unclassified balance sheet? List the order of the usual classifications on a classified balance sheet.

Correct AnswerverifiedAn unclassified balance sheet broadly gr...View AnswerShow Answer

Which of the following does not require an adjusting entry at year-end?

Correct AnswerverifiedShow Answer

The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.

Correct AnswerverifiedShow Answer

If a company records prepayment of expenses in an asset account,the adjusting entry would:

Correct AnswerverifiedShow Answer

IFRS tends to be more principles-based compared with GAAP,which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

Correct AnswerverifiedShow Answer

A company earned $2,000 in net income for October.Its net sales for October were $10,000.Its profit margin is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Correct AnswerverifiedShow Answer

A _____________ account is an account linked with another account,having an opposite normal balance and reported as a subtraction from that other account's balance.

Correct AnswerverifiedShow Answer

A company had revenues of $75,000 and expenses of $62,000 and paid $1,000 dividends during the accounting period.Which of the following entries could not be a closing entry for this company?

Correct AnswerverifiedShow Answer

The adjusted trial balance contains information pertaining to:

Correct AnswerverifiedShow Answer

Match the following types of accounts with each of the following transactions.

Correct Answerverified_TB6312_00...View AnswerShow Answer

On December 31,the balance in the Prepaid Subscription account was $648.This is the remaining balance of a 12-month subscription purchased on September 30 in the current year.How much did this subscription originally cost?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
The accounting cycle consists of 10 step...
View Answer

Correct Answer
verified
Without accounting adjustments many acco...
View Answer

Correct Answer
verified
An unclassified balance sheet broadly gr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
None...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
_TB6312_00...
View Answer

Correct Answer
verified

Correct Answer
verified