Question 1

A trial balance prepared before any adjustments have been recorded is

Accepted Answer

A)   An adjusted trial balance
B)   Used to prepare the financial statements
C)   An unadjusted trial balance
D)   Correct with respect to proper balance sheet and income statement amounts
E)   Will not have the debits equal to the creditsF) A) and E)
G) B) and D)

Question 2

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Accepted Answer

A) True 
 B)False

Question 3

Discuss the purpose of an adjusted trial balance.

Accepted Answer

An adjusted trial balance is a...

Question 4

Below is the adjusted trial balance of Reuben's Cubic Storage at December 31, 2020:
  Use the adjusted trial balance to answer the following questions:
-Prepare an income statement for the year ended December 31, 2020.

Accepted Answer

The answer of Below is the adjusted trial balance of...

Question 5

Premium revenue for 2023 is

Accepted Answer

A)   $540
B)   $1,440
C)   $900
D)   $60
E)   $360F) A) and E)
G) A) and D)

Question 6

Financial statements are prepared in the following order

Accepted Answer

A)   Balance sheet, statement of changes in equity, income statement
B)   Statement of changes in equity, balance sheet, income statement
C)   Income statement, balance sheet, statement of changes in equity
D)   Income statement, statement of changes in equity, balance sheet
E)   Balance sheet, income statement, statement of changes in equityF) C) and E)
G) C) and D)

Question 7

Under the alternative method for recording unearned revenue, the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

Accepted Answer

A) True 
 B)False

Question 8

Sweet Massage Co. unadjusted trial balance is as follows:
  Use the following information to prepare any adjusting entries required:

Accepted Answer

The answer of Sweet Massage Co. unadjusted trial balance is...

Question 9

An adjusting entry can only affect income statement accounts.

Accepted Answer

A) True 
 B)False

Question 10

A Company received a $10,000 deposit from a customer for goods to be delivered the following month. Under the accrual and cash basis of accounting respectively the deposit would be recorded as

Accepted Answer

A)   Accrual Basis: a liability | Cash Basis: a liability
B)   Accrual Basis: a liability | Cash Basis: income
C)   Accrual Basis: income | Cash Basis: a liability
D)   Accrual Basis: income | Cash Basis: income
E)   Accrual Basis: an asset | Cash Basis: an assetF) All of the above
G) A) and B)

Question 11

Which of the following statements is correct?

Accepted Answer

A)   Prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities.
B)   Accrued expenses and accrued revenues involve assets and liabilities that have not yet been recorded.
C)   Adjusting entries are used to record both accrued expenses and accrued revenues
D)   Prepaid expenses, depreciation, and unearned revenues require adjusting entries to record the effects of the passage of time.
E)   All of theseF) A) and C)
G) A) and E)

Question 12

Before an adjusting entry for expired insurance is made, the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

Accepted Answer

A) True 
 B)False

Question 13

On July 1, 2020, Nuby Trucking Company purchased a new truck for $52,000. The truck is estimated to have a useful life of six years and a residual value of $10,000. How much depreciation expense will be recorded for the truck during the year ended December 31, 2020?

Accepted Answer

A)   $3,000
B)   $3,500
C)   $4,000
D)   $6,000
E)   $7,000F) A) and E)
G) A) and D)

Question 14

Using the schedule below, indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements, and a "0" for no effect.

Accepted Answer

The answer of Using the schedule below, indicate the impact...

Question 15

An adjusting entry may include an entry to Cash.

Accepted Answer

A) True 
 B)False

Question 16

The length of time covered by periodic financial statements and other reports is the

Accepted Answer

A)   Fiscal year
B)   Natural business year
C)   Accounting period
D)   Business cycle
E)   Operating cycleF) A) and E)
G) C) and D)

Question 17

All items of plant and equipment, including land, eventually wear out or lose their usefulness.

Accepted Answer

A) True 
 B)False

Question 18

Identify the types of adjusting entries and explain the purpose of each type.

Accepted Answer

There are two major types of adjusting e...

Question 19

Adjusting entries are used to record the effects of internal economic events.

Accepted Answer

A) True 
 B)False

Question 20

Sally Company's unadjusted and adjusted trial balances on December 31, 2020, are as follows: In general journal form, prepare the adjusting entries that were recorded by Sally Company.

Accepted Answer

The answer of Sally Company's unadjusted and adjusted trial balances...

Exam 3: Adjusting Accounts for Financial Statements

On July 1, 2020, Nuby Trucking Company purchased a new truck for $52,000. The truck is estimated to have a useful life of six years and a residual value of $10,000. How much depreciation expense will be recorded for the truck during the year ended December 31, 2020?

Correct AnswerverifiedShow Answer

Premium revenue for 2023 is

Correct AnswerverifiedShow Answer

A trial balance prepared before any adjustments have been recorded is

Correct AnswerverifiedShow Answer

An adjusting entry may include an entry to Cash.

Correct AnswerverifiedShow Answer

The length of time covered by periodic financial statements and other reports is the

Correct AnswerverifiedShow Answer

Sally Company's unadjusted and adjusted trial balances on December 31, 2020, are as follows: In general journal form, prepare the adjusting entries that were recorded by Sally Company.

Correct AnswerverifiedShow Answer

Under the alternative method for recording unearned revenue, the receipt of cash in advance of performing services would be recorded as a credit to Unearned Revenue and a debit to Cash.

Correct AnswerverifiedShow Answer

Using the schedule below, indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements, and a "0" for no effect.

Correct AnswerverifiedShow Answer

Discuss the purpose of an adjusted trial balance.

Correct AnswerverifiedAn adjusted trial balance is a...View AnswerShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

All items of plant and equipment, including land, eventually wear out or lose their usefulness.

Correct AnswerverifiedShow Answer

Below is the adjusted trial balance of Reuben's Cubic Storage at December 31, 2020: Use the adjusted trial balance to answer the following questions: -Prepare an income statement for the year ended December 31, 2020.

Correct AnswerverifiedShow Answer

Adjusting entries are used to record the effects of internal economic events.

Correct AnswerverifiedShow Answer

Sweet Massage Co. unadjusted trial balance is as follows: Use the following information to prepare any adjusting entries required:

Correct AnswerverifiedShow Answer

A Company received a $10,000 deposit from a customer for goods to be delivered the following month. Under the accrual and cash basis of accounting respectively the deposit would be recorded as

Correct AnswerverifiedShow Answer

Before an adjusting entry for expired insurance is made, the amount in Prepaid Insurance is overstated and Insurance Expense is overstated.

Correct AnswerverifiedShow Answer

Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period.

Correct AnswerverifiedShow Answer

Financial statements are prepared in the following order

Correct AnswerverifiedShow Answer

An adjusting entry can only affect income statement accounts.

Correct AnswerverifiedShow Answer

Identify the types of adjusting entries and explain the purpose of each type.

Correct AnswerverifiedThere are two major types of adjusting e...View AnswerShow Answer

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An adjusted trial balance is a...
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There are two major types of adjusting e...
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