Account Test Review

Adjusted Trial Balance Cr. column

A credit to an asset account for the expired portion of the asset will appear on the worksheet in the

True

A portion of an asset that has been used up becomes an expense.

True

Adjusting entries are made at the end of an accounting period to bring certain accounts up to date.

False

Adjusting entries are referred to as external transactions because they involve parties outside the business.

False

Adjusting entries are required to correct errors made when recording routine business transactions.

True

Adjusting entries will be recorded in the journal and posted to the ledger in the same manner as routine journal entries.

True

An adjusting entry for unpaid salaries will be required if the end of the accounting period falls in the middle of the payroll period.

Statement of owner's equity

Any additional investments made by the owner in the business appear on the

True

As time passes and a prepayment gradually expires, the asset becomes an expense.

True

Assets such as office furniture and office equipment are referred to as long-term because they are expected to remain useful for several years

False

Assets will appear on a worksheet in the Trail Balance Dr. column, the Adjusted Trial Balance Dr. column, and the Income Statement Dr. column. (No asset in income statement)

False

Depreciation is a term to describe the loss in usefulness of assets such as office supplies and insurance policies.

False

Depreciation is recorded by debiting the accumulated depreciation account and crediting the depreciation expense account.

False

Examples of long-term assets include land, office equipment, and office supplies.

False

Expenses will appear on the Trial Balance Dr. column of a worksheet as well as the Adjusted Trial Balance Dr. column and the Balance Sheet Dr. column. (Balance Sheet does not have expenses)

True

Failure to record an expired asset results in an overstated of assets.

False

Failure to record unpaid salaries results in an overstated (C.A. Understated) of liabilities.

False

If an asset account has been adjusted, its balance in the Adjusted Trial Balance Dr. Column of the worksheet will be the same( C.A. different) as its balance in the Trial Balance Dr. column of the worksheet.

Total expenses are understated

If the adjusting entry for expired insurance is not recorded,

Net income is overstated

If the adjusting entry for unpaid salaries is not recorded,

True

If the total of the Income Statement Dr. column of a worksheet exceeds the total of the Income Statement Cr. column, a net loss exists.

False

Increases in expense accounts are recorded as credits.

False

Matching expenses with revenue means to add the expenses to the revenue in order to calculate the amount of net income.

True

Net income is shown in the Income Statement Cr. column and the Balance Sheet Dr. column of a worksheet.

Income statement Cr. column

Net income on a 10- column worksheet appears in the

Income Statement Dr. column

On a 10- column worksheet, Rent Expense appears in the

Trial Balance Dr. Column

On a 10- column worksheet, which column would contain a large balance for the supplies account?

True

On the balance sheet, the balance of the accumulated depreciation (Contra asset) account is subtracted from the related asset account.

True

Recording a credit to the accumulated depreciation account allows the original cost of the asset to be shown in the asset account.

Income statement Cr. Column

Revenue from Services would appear on the worksheet in the

Balance Sheet Dr. Column

The Equipment account will appear on the worksheet in the

Contra asset with a credit balance

The accumulated depreciation account is classified as a

True

The accumulated depreciation account is referred to as a contra account (increases credit and decrease debit).

False

The adjusting entry for expired insurance involves transferring the amount that has expired to the owner's capital account.

True

The adjusting entry for office supplies used involves a debit to the Office Supplies Expense account and a credit to the Office Supplies account.

False

The adjusting entry for unpaid salaries requires a debit to the Salaries Payable account and a credit to the Salaries Expense account.

Is transfered to an expense account

The expired portion of an asset

credit to an asset account

The journal entry for supplies used includes a

revenue and expenses be recorded in the accounting period in which they occured.

The matching principle of accounting requires that

True

The matching principle requires that revenue and expenses be recorded in the accounting period in which they occurred.

True

The original cost of an asset less the trade-in value is referred to as the book value.

True

The purpose of depreciation is to spread the cost of an asset over its useful life.

True

Unpaid salaries occur when the last day of the accounting period is not the same as the last day payroll period.

False

Unrecorded expenses result in an understatement (C.A. overstated) of net income and owner's equity.

True

When depreciation is recorded for more than one type of asset, it is common to have depreciation expense account for each type of asset.

In all credit colums except the Income Statement Cr. column

Where on the worksheet will an accumulated depreciation account be found?