ACG2021 Ch 4 Review (TCC)

place the steps taken at the end of the accounting period to complete the financial statement preparation process in the correct order. Prepare the financial statements Prepare an adjusted trail balance Prepare the adjusting entries

1. Prepare the adjusting entries 2. Prepare an adjusted trail balance 3. Prepare the financial statements

The adjusting entry to record depreciation on equipment includes a ___.

debit to Depreciation Expense and credit to Accumulated Depreciation

The adjusted entry a company would record for the amount of wages incurred but not yet paid will cause which of the following?

decrease stockholders' equity increase liabilities

Which of the following entries records the adjustment for income tax accrued, but not yet paid?

Debit income tax expense and credit income tax payable

Which of the following is true regarding depreciation of equipment?

accumulated depreciation is increased as the equipment is used causing the carrying value to decrease on the balance sheet accumulated depreciation is a contra-account that reports the amount of usefulness used as the balance sheet date depreciation is reported in accumulated depreciation which is netted against the related equipment account on the balance sheet

Which of the following is true about the adjusting entry to record the revenue for which the seller has performed of its obligations but not yet collected?

assets will increase stockholders' equity will increase

As of Dec 31 (the end of the accounting period), ABC Company has a profit before tax of $12,000. The company's tax rate is 25%. The adjustment will include a(n) ___ of $___ to income tax.

increase 3,000

The accounts receivable account should be ___ when adjusting at the end of the period for any revenues from fulfilling obligations to buyers which has not yet been collected or recorded.

increased

Which of the following may require an accrual adjusting entry that is recorded with a debit to an expense and credit to a liability?

interest owed on notes payable utilities to be paid in later accounting period

After the adjustments have been completed, the adjusted balance in Income Tax Payable represents the amount ___ to the government at the end of the accounting period.

owed

The adjusting entry for income taxes records income tax that is incurred and ___ by the company.

owed

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

salaries and wages expense will increase by the amount of the unpaid salaries and wages

Closing entries move the balances from the ___ accounts into the Retained Earnings account.

temporary

Which of the following statements most accurately describes the purposes of the closing entries?

to establish zero balances in the income statement and dividend accounts and to transfer net income and dividends into retained earnings

After the adjustments have been completed, the adjusted balance in Income Tax Expense account represents ___.

total income tax that has been paid or accrued during the period