ACC 330 CSUDH, Practice Quiz 2

$240

Information related to the Jones Company for the calendar year 2007 follows: Liabilities, December 31, 2007 $300 Assets, December 31, 2007 700 Dividends Distributed during 2007 90 Liabilities, December 31, 2006 250 Assets, December 31, 2006 500 Assuming no capital stock was issued during 2007, the net income earned by the Jones Company during 2007 was

reduce all temporary accounts to zero

Closing entries help to

indicates that the company earned a net income during the period

If the credit subtotal is greater than the debit subtotal in the income statement columns of a worksheet, the difference

an entry to record the return of defective purchased merchandise for credit

Marge's Company has all of the special journals that were described in your text (other than the voucher register) as a part of its accounting system. Which of the following journal entries would therefore be recorded in Marge's general journal?

credit to Rent Revenue for $1,197

On June 1, 2006, Whiting Corporation received $4,104 in advance for a two-year rental of some land, and credited Unearned Rent. In the adjusting entry at December 31, 2006, there would be a

Insurance Expense 4,500 Prepaid Insurance 4,500

On March 31, 2004, the Tricot Company purchased a two-year fire insurance policy. Tricot recorded the purchase by debiting Prepaid Insurance and crediting Cash for $12,000. Which of the following adjusting entries should Tricot use at the end of 2004 to match insurance expense against revenues?

Interest Expense 25 Interest Payable 25

On May 1, 2007, Zachary Corporation borrowed $2,500 on a two-year, 6% note payable. Interest is due and payable at the end of each six months. Zachary makes all interest payments on schedule. The correct December 31, 2007, adjusting entry would be

Inventory, January 1

On a worksheet, which account will not be extended to the balance sheet columns?

journal to the ledger

Posting is the procedure of transferring information from the

Unearned Revenue Rent Revenue Increase Increase

Rental receipts for the period July 1, 2007 through June 30, 2008, were collected on June 30, 2007. The effect of this transaction on the 2007 financial statements for unearned revenue and rent revenue is

$12,000

The Joy Company uses the accrual basis of accounting. Joy Company's Insurance Expense account had a $10,000 balance at the end of the year. The Prepaid Insurance account had a $3,000 balance at the beginning of the year and a $5,000 balance at the end of the year. How much cash was paid for insurance during the year?

$505,000

The Maddox Company uses the cash basis of accounting. Maddox Company made $500,000 in payments to its suppliers during the year. Maddox's beginning Inventory was $20,000, and its ending Inventory was $35,000. In addition, Maddox had a beginning Accounts Payable of $50,000 and an ending Accounts Payable of $70,000. What is Maddox's Cost of Goods Sold under the accrual basis of accounting?

$488,000

The Peace Company uses the accrual basis of accounting. Peace Company's Wages Expense account had a $510,000 balance at the end of the year. The Wages Payable account had a $23,000 balance at the beginning of the year and a $45,000 balance at the end of the year. How much cash was paid for wages during the year?

$12,000

The Reed Company uses the straight-line method to depreciate its equipment. On May 1, 2007, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Reed record for the equipment in the adjusting entry on December 31, 2007?

$740,000

The Smith Company uses the cash basis of accounting. Smith Company collected $700,000 from its customers during the year. Smith had $50,000 in Accounts Receivable at the beginning of the year, and $90,000 in Accounts Receivable at the end of the year. What is Smith's Sales Revenue under the accrual basis of accounting?

owners' equity

The accountant failed to make the adjusting entry to record the amount of interest owed on a note to the bank at the end of the year. This error would cause an overstatement of:

an overstatement of assets

The accountant failed to make the adjusting entry to record the depreciation for the year. This error would cause

an understatement of liabilities and an overstatement of owners' equity

The accountant failed to make the adjusting entry to record the unpaid wages of its employees as of December 31. This error will cause

Earned Collected No Yes

The balance in deferred (unearned) revenue accounts represents amounts that are

The general ledger accounts contain the same information as in the general journal, just in a different format.

What relationship exists between the general journal and the general ledger?

Unearned Rent + | -

Which T-account is incorrect?

Prepaid Rent

Which of the following accounts would not be closed to Income Summary during the year-end closing entry process?

recognition of salaries owed to employees for work done during the current period that will be paid during the next accounting period

Which of the following adjusting entries involves the recognition of an accrued expense?

incorrectly computing the balance of the cash account

Which of the following errors will be detected by a trial balance?

equipment purchased for use in the business operations

Which of the following is an economic resource that should be depreciated over the accounting periods estimated to be benefited?

correction of an error in the general journal

Which of the following is not a type of adjusting entry?

post-closing trial balances only contain temporary accounts

Which of the following statements regarding a post-closing trial balance is not true?