ACC final 3

e. Adjusting entries affect the cash account.

QN= 107 Which of the following statements is incorrect? a. Adjustments to prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities. b. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded. c. Adjusting entries can be used to record both accrued expenses and accrued revenues. d. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time. e. Adjusting entries affect the cash account.

b. Closing entries.

QN= 137 Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as: a. Adjusting entries. b. Closing entries. c. Final entries. d. Work sheet entries. e. Updating entries.

b. Revenue recognition principle.

QN=101 The accounting principle that requires revenue to be reported when earned is the: a. Matching principle. b. Revenue recognition principle. c. Time period principle. d. Accrual reporting principle. e. Going-concern principle.

c. Affect both income statement and balance sheet accounts.

QN=102 Adjusting entries: a. Affect only income statement accounts. b. Affect only balance sheet accounts. c. Affect both income statement and balance sheet accounts. d. Affect only cash flow statement accounts. e. Affect only equity accounts.

c. Cash basis accounting.

QN=103 The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: a. Accrual basis accounting. b. Operating cycle accounting. c. Cash basis accounting. d. Revenue recognition accounting. e. Current basis accounting.

e. All of these.

QN=104 Adjusting entries are journal entries made at the end of an accounting period for the purpose of: a. Updating liability and asset accounts to their proper balances. b. Assigning revenues to the periods in which they are earned. c. Assigning expenses to the periods in which they are incurred. d. Assuring that financial statements reflect the revenues earned and the expenses incurred. e. All of these.

d. Accrual basis accounting.

QN=105 The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is: a. Cash basis accounting. b. The matching principle. c. The time period principle. d. Accrual basis accounting. e. Revenue basis accounting.

b. Items that require adjusting entries.

QN=106 Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of: a. Items that require contra accounts. b. Items that require adjusting entries. c. Asset and equity. d. Asset accounts. e. Income statement accounts.

c. Owner withdrawals.

QN=108 An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Owner withdrawals. d. Unearned revenues. e. Accrued revenues.

e. Owner capital

QN=109 An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Supplies d. Unearned revenues. e. Owner capital

c. Cash.

QN=110 An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Cash. d. Unearned revenues. e. Accrued revenues.

d. Account payable.

QN=111 An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Unearned revenues. d. Account payable. e. Accrued revenues.

d. Revenue.

QN=112 An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Unearned revenues. d. Revenue. e. Accrued revenues.

d. Cost of goods sold.

QN=113 An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Unearned revenues. d. Cost of goods sold. e. Accrued revenues.

d. Depreciation expense.

QN=114 The expense created by allocating the cost of fixed assets to the periods in which they are used, representing the expense of using the assets, is called a. Accumulated depreciation. b. A contra account. c. The matching principle. d. Depreciation expense. e. An accrued account.

a. Accumulated Depreciation is a contra asset account

QN=115 Which statement is correct? a. Accumulated Depreciation is a contra asset account b. Depreciation expense is a contra asset account c. Account payable is a contra asset account d. Account receivable is a contra asset account e. Unearned revenue is a contra asset account

c. Debit Office Supplies Expense $254 and credit Office Supplies $254.

QN=116 Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies showed $105 of unused supplies available. The required adjusting entry is: a. Debit Office Supplies $105 and credit Office Supplies Expense $105. b. Debit Office Supplies Expense $105 and credit Office Supplies $105. c. Debit Office Supplies Expense $254 and credit Office Supplies $254. d. Debit Office Supplies $254 and credit Office Supplies Expense $254. e. Debit Office Supplies $105 and credit Supplies Expense $254.

c. Debit Unearned Legal Fees and credit Legal Fees Earned.

QN=117 If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is: a. Debit Cash and credit Legal Fees Earned. b. Debit Cash and credit Unearned Legal Fees. c. Debit Unearned Legal Fees and credit Legal Fees Earned. d. Debit Legal Fees Earned and credit Unearned Legal Fees. e. Debit Unearned Legal Fees and credit Accounts Receivable.

d. $337.50.

QN=118 On April 1, 2009, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31, 2009? a. $1,350. b. $450. c. $1,012.50. d. $337.50. e. $37.50.

c. $175.

QN=119 A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year? a. $75. b. $125. c. $175. d. $250. e. $325.

d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360.

QN=120 On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Prepaid Insurance, $1,800; credit Cash, $1,800. b. Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. c. Debit Prepaid Insurance, $360; credit Insurance Expense, $360. d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. e. Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440.

b. A liability on the balance sheet.

QN=121 Unearned revenue is reported in the financial statements as: a. Revenue on the balance sheet. b. A liability on the balance sheet. c. Unearned revenue on the income statement. d. An asset on the balance sheet. e. An operating activity on the statement of cash flows.

b. $4,000.

QN=122 On April 30, 2009, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31, 2009? a. $500. b. $4,000. c. $6,000. d. $14,000. e. $18,000.

d. A credit to Rent Earned for $2,400.

QN=123 PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2009, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2009 would include: a. A debit to Rent Earned for $2,400. b. A credit to Unearned Rent for $2,400. c. A debit to Cash for $6,400. d. A credit to Rent Earned for $2,400. e. A debit to Unearned Rent for $4,000.

c. A credit to Earned Fees for $1,000.

QN=124 On May 1, 2009 Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30, 2010. The Cash receipt was recorded as unearned fees and at December 31, 2009, $1,000 of the fees had been earned. The adjusting entry on December 31 Year 1 should include: a. A debit to Unearned Fees for $500. b. A credit to Unearned Fees for $500. c. A credit to Earned Fees for $1,000. d. A debit to Earned Fees for $1,000. e. A debit to Earned Fees for $500.

d. Debit Salaries Expense and credit Salaries Payable.

QN=125 The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is: a. Debit Unpaid Salaries and credit Salaries Payable. b. Debit Salaries Payable and credit Salaries Expense. c. Debit Salaries Expense and credit Cash. d. Debit Salaries Expense and credit Salaries Payable. e. Debit Cash and credit Salaries Expense.

a. $300,000.

QN=126 On January 1, Southwest College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester, which spans four months beginning on January 2. What amount of tuition revenue should the college recognize on January 31? a. $300,000. b. $600,000. c. $800,000. d. $900,000. e. $1,200,000.

e. Book Value.

QN=127 The difference between the cost of an asset and the accumulated depreciation for that asset is called a. Depreciation Expense. b. Unearned Depreciation. c. Prepaid Depreciation. d. Depreciation Value. e. Book Value.

a. $3,250.

QN=128 A company purchased a new truck at a cost of $42,000 on July 1, 2009. The truck is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the truck for the year ended December 31, 2009? a. $3,250. b. $3,500. c. $4,000. d. $6,500. e. $7,000.

b. $2,900.

QN=129 A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period? a. $2,700. b. $2,900. c. $3,300. d. $3,500. e. $3,700.

c. A debit to Salaries Payable and a credit to Cash.

QN=130 If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include: a. A debit to Cash and a credit to Salaries Payable. b. A debit to Cash and a credit to Prepaid Salaries. c. A debit to Salaries Payable and a credit to Cash. d. A debit to Salaries Payable and a credit to Salaries Expense. e. No entry would be necessary on January 5.

a. Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.

QN=131 The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is: a. Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400. b. Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400. c. Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200. d. Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200 e. Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.

b. Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.

QN=132 What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250? a. Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250. b. Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500. c. Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500. d. Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750. e. Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

b. $750

QN=133 A company purchased new computers at a cost of $14,000 on September 30, 2010. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010? a. $250 b. $750 c. $875 d. $1,000 e. $3,000

a. $1,075

QN=134 The balance in Tee Tax Services' office supplies account on February 1 and February 28 was $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February? a. $1,075 b. $1,500 c. $1,525 d. $2,325 e. $3,100

b. Temporary accounts.

QN=135 Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: a. Real accounts. b. Temporary accounts. c. Closing accounts. d. Permanent accounts. e. Balance sheet accounts.

c. Permanent accounts.

QN=136 Assets, liabilities, and equity accounts are not closed; these accounts are called: a. Nominal accounts. b. Temporary accounts. c. Permanent accounts. d. Contra accounts. e. Accrued accounts.

c. $23,400.

QN=138 The J. Godfrey, Capital account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000, what is the ending balance in the J. Godfrey, Capital account after all closing entries are made? a. $ 8,000. b. $15,400. c. $23,400. d. $17,000. e. $32,400.

b. To close the revenue and expense accounts.

QN=139 The Income Summary account is used: a. To adjust and update asset and liability accounts. b. To close the revenue and expense accounts. c. To determine the appropriate withdrawal amount. d. To replace the income statement under certain circumstances. e. To replace the capital account in some businesses.

d. Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000.

QN=140 Dina Kader withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is: a. Debit Income Summary and credit Cash for $35,000. b. Debit Dina Kader, Withdrawals and credit Cash for $35,000. c. Debit Income Summary and credit Dina Kader, Withdrawals for $35,000. d. Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000. e. Debit Dina Kader, Withdrawals and credit Dina Kader, Capital for $35,000.

d. $46,000.

QN=141 At the beginning of 2009, a company's balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner's Capital = $50,000. During 2009, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner's withdrawals for the year totaled $20,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be: a. $66,000. b. $86,000. c. $(4,000). d. $46,000. e. Cannot be determined from the information provided.

e. $123,000.

QN=142 At the beginning of 2009, Beta Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. During 2009, the company reported total revenues of $226,000 and expenses of $175,000. Also, owner withdrawals during 2009 totaled $48,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be: a. $174,000. b. $78,000. c. Cannot be determined from the information provided. d. $120,000. e. $123,000.

d. A debit of $33,000 to owner capital.

QN=143 After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses) into the income summary, the income summary account has a debit balance of $33,000. The entry to close the income summary account will include: a. A debit of $33,000 to owner withdrawals. b. A credit of $33,000 to owner withdrawals. c. A debit of $33,000 to income summary. d. A debit of $33,000 to owner capital. e. A credit of $33,000 to owner capital.

a. Revenue

QN=144 Which of the following accounts is not increased by a debit? a. Revenue b. Expense c. Asset d. Withdrawal e. None of these

a. A debit increases an asset while a credit decrease an asset

QN=145 Which of the following statements is true? a. A debit increases an asset while a credit decrease an asset b. A debit decreases an asset while a credit decrease an asset c. A debit increases a liability and a credit decreases a liability d. A debit increases revenues and a credit decreases revenues e. None of these

b. Account payable

QN=146 Which of the following is a liability? a. Account receivable b. Account payable c. Owner's capital d. Owner's withdrawal e. None of these

b. Expenses decrease Owner's equity

QN=147 Which statement is true? a. Expenses increase Owner's equity b. Expenses decrease Owner's equity c. Expenses increase Owner's withdrawal d. Expenses decrease Owner's withdrawal e. None of these

a. The double entry system requires every transaction to be recorded in at least two places

QN=148 Which statement is true? a. The double entry system requires every transaction to be recorded in at least two places b. The double entry system requires every transaction to be recorded in at least three places c. The double entry system requires every transaction to be recorded in at least one places d. The double entry system requires every transaction to be recorded in at least four places e. None of these

c. Asset

QN=149 Which of the following accounts is not increased by a credit a. Revenue b. Liability c. Asset d. Owner's equity e. None of these

a. The assigning or allocating of a fixed asset's cost to expense over the accounting periods that the asset is likely to be used.

QN=150 Depreciation is: a. The assigning or allocating of a fixed asset's cost to expense over the accounting periods that the asset is likely to be used. b. The assigning or allocating of a tangible asset's cost to expense over the accounting periods that the asset is likely to be used. c. The assigning or allocating of a intangible asset's cost to expense over the accounting periods that the asset is likely to be used. d. The assigning or allocating of a fixed asset's cost to expense over the accounting periods. e. None of these