Question 1

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Accepted Answer

A) True 
 B)False

Question 2

Failure to record depreciation expense will overstate the asset and understate the expense.

Accepted Answer

A) True 
 B)False

Question 3

Profit margin is defined as:

Accepted Answer

A)   Revenues divided by net sales.
B)   Net sales divided by assets.
C)   Net income divided by net sales.
D)   Net income divided by assets.
E)   Net sales divided by net income.F) None of the above
G) C) and D)

Question 4

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Accepted Answer

A) True 
 B)False

Question 5

All property, plant and equipment, including land, eventually wear out or decline in usefulness.

Accepted Answer

A) True 
 B)False

Question 6

A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is ?

Accepted Answer

A)   It will have no effect on income.
B)   It will overstate assets and liabilities by $9,000.
C)   It will understate net income by $9,000.
D)   It will understate assets by $9,000.
E)   It will understate expenses and overstate net income by $9,000.F) A) and E)
G) B) and D)

Question 7

Depreciation expense for a period is the portion of the cost of an item of property, plant and equipment that is allocated to that period.

Accepted Answer

A) True 
 B)False

Exam 3: Adjusting Accounts and Preparing Financial Statements

A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is ?

Correct Answer
verified

Failure to record depreciation expense will overstate the asset and understate the expense.

Correct Answer
verified

All property, plant and equipment, including land, eventually wear out or decline in usefulness.

Correct Answer
verified

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Correct Answer
verified

Depreciation expense for a period is the portion of the cost of an item of property, plant and equipment that is allocated to that period.

Correct Answer
verified

Profit margin is defined as:

Correct Answer
verified

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Correct Answer
verified

Exam 3: Adjusting Accounts and Preparing Financial Statements

A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is ?

Correct AnswerverifiedShow Answer

Failure to record depreciation expense will overstate the asset and understate the expense.

Correct AnswerverifiedShow Answer

All property, plant and equipment, including land, eventually wear out or decline in usefulness.

Correct AnswerverifiedShow Answer

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Correct AnswerverifiedShow Answer

Depreciation expense for a period is the portion of the cost of an item of property, plant and equipment that is allocated to that period.

Correct AnswerverifiedShow Answer

Profit margin is defined as:

Correct AnswerverifiedShow Answer

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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