ACG 2021 Ch. 4 Focus Practice Set

The entry to record income tax a crude, but unpaid, at the end of the accounting. Includes both a _____ and a _______. (check all that apply.)

Credit to income tax payable and debit to income tax expense

The deferral adjustment to record the amount of unearned service revenue that is now earned includes a ______. (Select all that apply.)

Credit to service revenue, debit to unearned service revenue

During the closing process, the closing entry to reduce the sales revenue normal account balance to zero requires the revenue account be _______ (debited or credited.)

Debited

Balance sheet accounts, such as supplies or prepaid rent, _______ as a result of tea for all adjustments. Parentheses enter one word per blank.)

Decrease

Prepaid expenses should be _______ by the benefits that were used up during the accounting period.

Decreased

Which of the following types of transactions represent to deferral adjustments that are recorded to adjust or amounts expired or used during the period? (Select all that apply.)

Decreased to prepaid insurance and increased to insurance expense. Decreased to supplies and increased to supplies expense.

_______ Expense should be recorded to recognize the use of and benefit received from long-lived assets, such as equipment, during the accounting period. (Enter one word per blank.)

Depreciation

Temporary accounts include ______, _______, and ________. These accounts only track the current results.

Dividends, expenses, revenues

The unearned revenue account should be reduced in the revenue account increased for the amount of revenue ______ during the period.

Earned

Why is an adjustment necessary for interest accrued on a note payable at the end of the. The interest will not be paid until the note is to? (Check all that apply.)

Even though interest will not be paid until a future., The expense was actually incurred during the current accounting period. The adjustment is needed to accurately pretrade the interest liability of the company, all amounts of that should be reported on the balance sheet.

Adjustments made to expense account at the end of the accounting. Adhere to the ______ recognition (matching) principle. (Enter one word per blank.)

Expense

He adjusting entry to record interest owed on obligations at the end of the accounting. Includes a debit to "Interest _______" and a credit to "Interest ______."

Expense, payable

Which of the following types of transactions represent accrual adjustments? (Select all that apply.)

Increase to interest payable and increase to interest expense. Increase to Income Taxes Payable and Increase to Income Taxes Expense.

He accounts receivable account should be ______ when adjusting at the end of the period for any revenues that happen earned but not yet collected or recorded. (Enter one word per blank.)

Increased

The accounts receivable account should be ______ when adjusting at the end of the period for any revenues that have been earned but not yet collected or recorded. (Enter one word per blank.)

Increased

Place the steps in the adjustment process in order.

1. Analyze the accounts to determine the amount of the adjustment. 2. Record the adjusting entry in the journal. 3. Summarize the adjusting entries in the accounts.

Places steps in the adjustment process at the end of the accounting period in the correct order.

1. Using the unadjusted trial balance, determine the accounts requiring adjustments. 2. Record the adjusting entries in the journal. 3. Post the adjusting journal entries to the T accounts 4. Prepare and adjusted trial balance to check the quality of the debits and credits

A prepayment that is originally recorded as an asset will be _____.

Allocated to future accounting periods based on the value of the benefit used during the period.

Supplies are recorded as a(n) _______ when purchased.

Assets

Which of the following statements correctly analyzes the impact of declaring and paying a dividend on the financial condition of a company?

Both assets and stockholders' equity will decrease.

Accrual adjustments are needed when a company has earned revenue or incurred an expense but _____ has not been exchanged. (Enter one word per blank.)

Cash

Which type of adjusting entry recorded last because the amount is calculated after taking into account effect on net income of all other adjustments recorded at the end of the period?

Income tax incurred

The adjustment for supplies used during the period will result in a(n) ______ to the Supplies Expense account.

Increase

In accrual accounting, to defer means to ______ Recording the other side of the cash transaction as a revenue or expense. Instead the other side of the cash entry is recorded as liability or prepaid. (Enter one word per blank.)

Postpone

How does the adjustment for depreciation differ from other defferal adjustments?

The depreciation adjustment uses a contra-asset account rather than reducing the asset accounts directly.

What are the effects on the financial condition of the business from the adjustment for revenues earned, but not yet collected, during the accounting period ?

Total assets will increase in total stockholders equity will increase.

As of December 31, the un-adjusted balance in unearned revenue contains $5,600 for un-redeemed gift cards. An analysis of the monthly sales indicates that $3,200 gift cards were redeemed during the month but not yet recorded. How will these transactions affect the adjustments at the end of the period?

Unearned Revenue needs to be decreased by the amount of gift cards redeemed during the month. Sales Revenue needs to be increased by the amount of gift cards redeemed during the month.

Which of the following Transactions constitute an accrual adjustment involving an expense account?

Wages incurred, but not yet paid to employees, at the end of the accounting period. Taxes accrued, but not yet paid to the government, at the end of the accounting period.

The accrual adjustment recorded to adjust for revenues earned but not yet collected will cause ______.

Assets to increase

For companies that generate net income during the current period, the closing entries will result in a net _____ entry to retained earnings.

Credit

I didn't buy the entries needed for the closing process. (Select all that apply.)

Credit to begins to cleared and debit retain earnings. Debit each revenue, credit each expense, and record the difference in retained earnings.

Adjustments help to ensure that all revenues are recorded in the period in which they are ______. (Enter one word per blank.)

Made

Bristol, Inc. Paid $800 for a four month insurance policy on August 1 of the current year. On August 31, Bristol, Inc. Made an adjusting entry to account for the insurance that expired during the month of August. The adjusting entry contain a debit to insurance expense in the amount of $200 and a credit to prepaid insurance in the amount of $200. The remaining balance in the prepaid insurance account after the adjustment was $600.

N/A

Permanent accounts are found on ______.

Only the balance sheet

Taggert Company paid $1,800 for a 6-month insurance premium on September 1. Which of the following statements are correct regarding the accounting for this insurance over the six-month period? (Check all that apply.)

Taggert will debit Insurance Expense for $300 on Sept. 30. Taggert will credit Prepaid Insurance for $300 on Sept. 30. Taggert will debit Prepaid Insurance for $1,800 on Sept.1.

After the adjustments have been completed, the adjusted balance of accumulated depreciation account represents the

Total depreciation taking on the long-lived assets since their purchase

What are the effects on the accounting equation from the adjustment for revenue earned during the accounting. That had previously been recorded as a liability?

Total liabilities will decrease and total stockholders equity will increase.

What are the effects on the accounting equation from the adjustment for wages incurred, but not yet paid, during the accounting period?

Total liabilities will increase and total stockholders' equity will decrease.

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

After the adjustments have been completed the adjusted balance in the wages payable account represents wages earned by employees, but not yet ______ by the company.

Paid

Wages payable is recorded for wages earned, but not yet ______ two employees, at the end of the accounting period.

Paid

Why is it necessary to make adjustments to revenue accounts at the end of the accounting period? (Select all that apply.)

Payments received in advance and originally recorded as a liability should be reduced for any portion earned during the current period. Revenues earned at the end of the period that have not been billed two accounts receivable should be recorded as a revenue

In an accrual adjustment for expenses incurred but not yet paid _____.

Reliability is increasing since cash will be paid in the future due to the expense incurred.

The closing entry for dividends involves a debit to______ and a credit to ______ . (Select all that apply)

Retain earnings, dividends declared