Accounting

An adjustment to record unrecorded fees earned was posted during the current period. Which of the following would cause the adjusted trial balance totals to be unequal? a.The adjustment was posted as a debit to Accounts Receivable for $870 and a credit to Fees Earned for $780. b.The adjustment was posted as a debit to Cash and a credit to Fees Earned. c.The adjustment was completely omitted. d.The adjustment was posted as a debit to Fees Earned and a credit to Accounts Receivable.

A

The adjusting entry for accrued revenues a.is the same journal entry as recording revenue on account. b.differs from the journal entry to record revenue on account. c.includes a credit to an asset account. d.includes a debit to a revenue account.

A

Which of the following represents an accrual? a.Wages payable b.Prepaid insurance c.Accumulated depreciation d.Fees earned

A

Because collecting the adjustment data requires time, the adjusting entries are often a.entered and dated later than the last day of the period. b.entered later but dated as of the last day of the period. c.omitted. d.estimated and recorded earlier than the last day of the period.

B

Boomer Company purchased office equipment for $1,000 on December 5. The office equipment depreciated $30 during December. The adjusting entry should include a a.credit to Depreciation Expense for $30. b.debit to Depreciation Expense for $30. c.debit to Depreciation Expense for $970. d.debit to Accumulated Depreciation—Office Equipment for $30.

B

Unearned revenues a.are recorded as assets when cash is received. b.are recorded when services have been performed for the customer. c.are referred to as future revenues. d.All of these choices are correct.

C

When recording an adjusting entry for unearned revenues a.a liability account is credited. b.a revenue account is debited. c.a liability account is debited. d.an asset account is credited.

C

The balance in the unearned rent account for Jackson Co. as of December 31 is $1,500. If Jackson Co. failed to record the adjusting entry of $500 of rent earned in December, the effect on the balance sheet and income statement for December would be a.liabilities overstated $500; net income understated $500. b.liabilities overstated $1,000; net income overstated $1,000. c.assets understated $500; net income overstated $500. d.liabilities understated $500; net income understated $500.

A

The balance in the unearned rent account for Jackson Co. as of December 31 is $1,500. If Jackson Co. failed to record the adjusting entry of $500 of rent earned in December, the effect on the balance sheet and income statement for December would be a.liabilities overstated $500; net income understated $500. b.liabilities understated $500; net income understated $500. c.liabilities overstated $1,000; net income overstated $1,000. d.assets understated $500; net income overstated $500.

A

Which of the following would be classified as unearned revenue? a.Cash received for services not yet rendered b.Rent revenue earned but not yet received c.Wages owed but not yet paid d.Insurance paid for the next year

A

Which of the following would not cause the adjusted trial balance totals to be unequal? a.The adjustment for prepaid insurance was omitted. b.The adjustment for depreciation of $3,545 was journalized as debit to Depreciation Expense for $3,454 and a credit to Accumulated Depreciation of $3,545. c.The adjustment for accrued fees of $16,340 was journalized as a debit to Accounts Payable for $16,430 and a credit to Fees Earned of $16,340. d.None of these choices are correct.

A

If the adjustment for accrues expenses is not recorded a.revenues will be understated. b.net income will be overstated. c.net income will be understated. d.expenses will be overstated.

B

If the adjustment for depreciation is not recorded a.net income is correctly stated. b.net income is overstated. c.assets are understated. d.revenues are overstated.

B

Once the adjusted trial balance is balanced, it can be used to prepare a.the classified balance sheet. b.the income statement, the retained earnings statement, and the classified balance sheet. c.the classified balance sheet and the income statement. d.None of these financial statement choices are prepared with the adjusted trial balance.

B

The adjusted trial balance a.is for a period of time. b.is at a specific date. c.does not have a date. d.None of these choices are correct.

B

The adjusting entry for accrued expenses includes a.a credit to an expense account. b.a debit to an expense account. c.a debit to a liability account. d.a credit to an asset account.

B

The adjusting entry to record depreciation includes a.a debit to an asset account. b.a debit to an expense account. c.a debit to a liability account. d.None of these choices are correct.

B

When recording an adjusting entry for a prepaid expense a.a liability account is debited. b.an asset account is credited. c.an expense account is credited. d.an asset account is debited.

B

Adjusting entries are dateda. at the beginning of the accounting period.b. when an economic event occurs.c. at the end of the accounting period.d. when cash is received.

C

All of the following are types of adjustments except a.prepaid expenses. b.accrued expenses. c.cash expenses. d.accrued revenues.

C

An adjustment to record unrecorded fees earned was posted during the current period. Which of the following would cause the adjusted trial balance totals to be unequal? a.The adjustment was posted as a debit to Cash and a credit to Fees Earned. b.The adjustment was completely omitted. c.The adjustment was posted as a debit to Accounts Receivable for $870 and a credit to Fees Earned for $780. d.The adjustment was posted as a debit to Fees Earned and a credit to Accounts Receivable.

C

If the adjustment for unearned revenues is not recorded a.liabilities will be understated. b.assets will be overstated. c.net income will be understated. d.net income will be correctly stated.

C

If the estimated amount of depreciation on equipment for a period is $3,500, the adjusting entry to record depreciation would be a.debit Depreciation Expense $3,500; credit Equipment $3,500. b.debit Equipment $3,500; credit Depreciation Expense $3,500. c.debit Depreciation Expense $3,500; credit Accumulated Depreciation $3,500. d.debit Accumulated Depreciation $3,500; credit Depreciation Expense $3,500.

C

The adjusted trial balance is prepared a.prior to completing the adjusting entries. b.only if errors are suspected when problems arise while preparing the financial statements. c.after adjusting entries are posted but before financial statements are prepared. d.after financial statements are prepared.

C

The adjusted trial balance is prepared a.prior to completing the adjusting entries. b.after financial statements are prepared. c.only if errors are suspected when problems arise while preparing the financial statements. d.after adjusting entries are posted but before financial statements are prepared.

D

When recording the adjusting entry for depreciation expense, the fixed asset account balance a.is decreased by its book value. b.is increased by the amount of the depreciation. c.is decreased by the amount of the depreciation. d.stays the same.

D

If the adjustment for accrues expenses is not recorded a.net income will be understated. b.net income will be overstated. c.expenses will be overstated. d.revenues will be understated.

b

The adjusting entry for accrued revenues includes a a.credit to an asset account. b.debit to an asset account. c.credit to an expense account. d.debit to a revenue account.

b

If the following adjusting entry is omitted, what effect will it have on net income? Depreciation Expense4,300 Accumulated Depreciation4,300 a.Net income will be overstated by $4,300. b.Net income will be understated by $4,300. c.Net income will be overstated by $8,600. d.It will have no effect on net income.

A

The purpose of the adjusted trial balance is to verify a.the equality of the total debit balances and the total credit balances before adjustments have been recorded. b.the equality of the total debit balances and the total credit balances after adjustments have been recorded. c.that the net income reported is accurate. d.that all of the accounts are correct.

B

Which of the following represents a deferral? a.Wages payable b.Prepaid insurance c.Fees earned d.Accumulated depreciation

B

The adjusted trial balance is prepared a.to determine whether the balance sheet is in balance. b.to determine the net income or loss. c.to verify the equality of total debit and credit balances. d.for all of these reasons.

C

The adjusting entry to record depreciation includes a.a debit to an asset account. b.a debit to a liability account. c.a debit to an expense account. d.None of these choices are correct.

C

The difference between the cost of a fixed asset and its accumulated depreciation is known as its a.market value. b.contra value. c.book value. d.depreciation expense.

C

The purpose of the adjusted trial balance is to verify a.the equality of the total debit balances and the total credit balances before adjustments have been recorded. b.that the net income reported is accurate. c.the equality of the total debit balances and the total credit balances after adjustments have been recorded. d.that all of the accounts are correct.

C

When recording an adjusting entry for unearned revenues a.a liability account is credited. b.an asset account is credited. c.a liability account is debited. d.a revenue account is debited.

C

repaid expenses a.are similar to accrued expenses because both have been recorded. b.are an advance receipt of cash. c.are an advance payment of cash. d.do not require an adjusting entry.

C

After which of the following errors would the adjusted trial balance totals not agree? a.Supplies were miscounted and adjusted for the wrong amount. b.The adjustment for depreciation was omitted. c.A debit to Accounts Receivable was inadvertently posted as a debit to Accounts Payable. d.A debit to Accounts Receivable was inadvertently posted as a credit to Accounts Payable.

D

After which of the following errors would the adjusted trial balance totals not agree? a.The adjustment for depreciation was omitted. b.A debit to Accounts Receivable was inadvertently posted as a debit to Accounts Payable. c.Supplies were miscounted and adjusted for the wrong amount. d.A debit to Accounts Receivable was inadvertently posted as a credit to Accounts Payable.

D

If an adjustment for salaries earned but not recorded or paid in the amount of $85,000 were to be omitted, how would this affect the financial statements? a.Liabilities would be understated on the balance sheet for $85,000. b.Net income would be overstated on the income statement by $85,000. c.Expenses would be understated on the income statement by $85,000. d.All of these effects would occur.

D

If the adjustment for prepaid expenses is not recorded a.net income will be correctly stated. b.assets will be understated. c.expenses will be overstated. d.net income will be overstated.

D

The unearned subscriptions account reflected a balance of $32,500 prior to any adjustments. It is determined that $9,800 in subscriptions remain unearned at the end of the period. The adjusting journal entry should include a a.debit to Unearned Subscriptions for $9,800. b.credit to Subscriptions Earned for $9,800. c.credit to Unearned Subscriptions for $22,700. d.credit to Subscriptions Revenue for $22,700.

D

Which of the following is true regarding adjusting entries? a.Adjusting entries are optional with accrual-basis accounting. b.Adjusting entries are not posted to the ledger. c.Adjusting entries are dated as of the first day of the new accounting period. d.None of these statements are true.

D

When a company has incurred an expense =, but hasn't yet paid cash or recorded an obligation to pay.-Adjusting entry for an accrued expense always includes a debit to an expense account (increase an expense) and a credit to a liability account (increase a liability).-Ex: Salaries expense debited and salaries payable credited.

When a company has incurred an expense =, but hasn't yet paid cash or recorded an obligation to pay.-Adjusting entry for an accrued expense always includes a debit to an expense account (increase an expense) and a credit to a liability account (increase a liability).-Ex: Salaries expense debited and salaries payable credited.