Exam 4: Adjustments,Financial Statements,and Financial Results

A) It is used to prepare financial statements.
B) It is prepared to ensure assets equal liabilities.
C) It is prepared at the beginning of the year.
D) It is prepared before the adjusting journal entries have been made.

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A) Unadjusted trial balance
B) Adjusted trial balance
C) Closing entries
D) Post-closing trial balance

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A) Also known as balance sheet accounts.
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits.
C) Lists the balances of all accounts to check that revenues equal expenses.
D) The level of profit prior to considering income tax.
E) An account that is paired with another account and acts to reduce its book value.
F) Converts some of an asset's or a liability's book value into an expense or a revenue.
G) An account that must have a zero balance after closing entries have been made.
H) Adds new values into the balance sheet and income statement accounts.
I) The amount at which an asset or liability is reported in the financial statements.
J) Lists the balances of all permanent accounts to check that debits equal credits.
K) A journal entry that transfers net income or loss to the Retained Earnings account.
L) When revenue minus expenses is a negative number.
M) Entries made to update existing accounts and record new events.

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A) To record transactions for the period.
B) To set all account balances to zero.
C) To prepare the accounting records so they are ready to track results for the following year.
D) To adjust for accrual and deferral transactions.

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A) Total assets will increase and total stockholders' equity will increase.
B) Total assets will increase and total stockholders' equity will decrease.
C) Total assets will decrease and total stockholders' equity will decrease.
D) Total assets will decrease and total stockholders' equity will increase.

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A) Debit Cash $75 and credit Interest Revenue $75.
B) Debit Interest Receivable $75 and credit Interest Revenue $75.
C) Debit Interest Revenue $75 and credit Interest Receivable $75.
D) No journal entry is needed at this time.

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A) Dividends are reported on the Income Statement.
B) Dividends are reported on the Statement of Retained Earnings.
C) Dividends are reported on the Balance Sheet.
D) Dividends are not reported on any of the financial statements.

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A) Also known as balance sheet accounts.
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits.
C) Lists the balances of all accounts to check that revenues equal expenses.
D) The level of profit prior to considering income tax.
E) An account that is paired with another account and acts to reduce its book value.
F) Converts some of an asset's or a liability's book value into an expense or a revenue.
G) An account that must have a zero balance after closing entries have been made.
H) Adds new values into the balance sheet and income statement accounts.
I) The amount at which an asset or liability is reported in the financial statements.
J) Lists the balances of all permanent accounts to check that debits equal credits.
K) A journal entry that transfers net income or loss to the Retained Earnings account.
L) When revenue minus expenses is a negative number.
M) Entries made to update existing accounts and record new events.

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A) earned,but not yet collected,at the end of
B) accrued,but not yet paid,at the end of
C) paid during
D) deducted from employee's pay

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A) An accrual adjustment that increases an asset will include an increase in an expense.
B) A deferral adjustment that decreases an asset will include an increase in an expense.
C) An accrual adjustment that increases an expense will include an increase in assets.
D) A deferral adjustment that increases a contra-account will include an increase in an asset.

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A) Liabilities will be overstated and net income will be understated.
B) Assets will be understated and net income will be understated.
C) Assets will be overstated and net income will be overstated.
D) Cash will be overstated and net income will be overstated.

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A) depreciation for the current period.
B) total depreciation that has been recorded on the long-lived assets since their purchase.
C) carrying value of the long-lived assets.
D) decline in the market value of the long-lived assets.

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A) nothing is recorded on the financial statements.
B) a liability account is created or increased and an expense is recorded.
C) an asset account is decreased or eliminated and an expense is recorded.
D) a revenue and an expense are accrued.

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A) Also known as balance sheet accounts.
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits.
C) Lists the balances of all accounts to check that revenues equal expenses.
D) The level of profit prior to considering income tax.
E) An account that is paired with another account and acts to reduce its book value.
F) Converts some of an asset's or a liability's book value into an expense or a revenue.
G) An account that must have a zero balance after closing entries have been made.
H) Adds new values into the balance sheet and income statement accounts.
I) The amount at which an asset or liability is reported in the financial statements.
J) Lists the balances of all permanent accounts to check that debits equal credits.
K) A journal entry that transfers net income or loss to the Retained Earnings account.
L) When revenue minus expenses is a negative number.
M) Entries made to update existing accounts and record new events.

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A) decreases total assets because cash is paid at the time of the adjustment.
B) expenses the amount used during the period.
C) increases total assets because costs are incurred.
D) increases total assets because cash will be received in the future.

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