Question 1

At the beginning of the period, the Supplies account has a balance of $700. At the end of the period, the balance in the account was $475. The adjusting entry would be:

Accepted Answer

A)  debit Supplies Expense, $475; credit Supplies, $475.
B)  debit Supplies, $475; credit Supplies Expense, $475.
C)  debit Supplies Expense, $225; credit Supplies, $225.
D)  debit Supplies, $225; credit Supplies Expense, $225.

Question 2

Supplies on hand were $800 at the start of the year. At the end of the year, it was determined that $450 of supplies had been used. What is the adjusting entry for supplies?

Accepted Answer

A)  debit Supplies, $450; credit Supplies Expense, $450
B)  debit Supplies, $350; credit Supplies Expense, $350
C)  debit Supplies Expense, $450; credit Supplies, $450
D)  debit Supplies Expense, $350; credit Supplies, $350

Question 3

The asset cost less accumulated depreciation equals salvage value.

Accepted Answer

A) True 
 B)False

Question 4

If revenues are recognized and recorded when earned, the company is using the:

Accepted Answer

A)  cash basis of accounting.
B)  accrual basis of accounting.
C)  adjustment basis of accounting.
D)  the expense basis of accounting.

Question 5

The accounts that are NOT closed are:

Accepted Answer

A)  Assets, Liabilities, and Revenues.
B)  Assets, Liabilities, and Stockholders' Equity.
C)  Assets, Liabilities, and Expenses.
D)  Revenues, Expenses and Dividends.

Question 6

A company had a normal $51,000 cash balance on their adjusted trial balance. If revenues, expenses and dividends respectively were $91,000; $20,000 and $3,000 what amount of cash will be found on the post-closing trial balance?

Accepted Answer

A)  $122,000 normal balance
B)  $51,000 normal balance
C)  $119,000 normal balance
D)  $165,000 normal balance

Question 7

The balance of Retained Earnings on the adjusted trial balance does not represent the final Retained Earnings balance on the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 8

The total revenues of $6,700, total expenses of $3,900 and dividends of $900 were recorded in the closing entries. The net income for the month was:

Accepted Answer

A)  $5,800.
B)  $2,800.
C)  $1,900.
D)  $3,700.

Question 9

The recording of depreciation is related to a(n) :

Accepted Answer

A)  deferred expense.
B)  deferred revenue.
C)  accrued expense.
D)  accrued revenue.

Question 10

Item costs that have been incurred, but not yet paid, are called:

Accepted Answer

A)  referrals.
B)  deferrals.
C)  accruals.
D)  non-cash items.

Question 11

Expense accounts are closed by crediting them and debiting Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 12

Of the following, which is NOT reported on the Balance Sheet?

Accepted Answer

A)  cash
B)  equipment
C)  Depreciation Expense
D)  account payable

Question 13

If a piece of equipment was purchased on September 1, it would have ________ months depreciation included in the adjusting entry for the calendar year.

Accepted Answer

A)  12
B)   8
C)   4
D)   6

Question 14

During a recent week, incurred wages were $800. However, $480 of the wages had not been paid. Assume no other adjusting entries have been done this fiscal year. The adjusting entry for wages would be:

Accepted Answer

A)  debit Wages Payable, $480; credit Wages Expense, $480.
B)  debit Wages Expense, $480; credit Wages Payable, $480.
C)  debit Wages Payable, $320; credit Wages Expense, $320.
D)  debit Wages Expense, $320; credit Wages Payable, $320.

Question 15

Allied, Inc. bought a 3-year insurance policy on August 1 for $3,900. Assume no other adjusting entries have been done this fiscal year. The adjusting entry on December 31 would be:

Accepted Answer

A)  debit Insurance Expense, $108; credit Prepaid Insurance, $108.
B)  debit Prepaid Insurance, $108; credit Insurance Expense, $108.
C)  debit Insurance Expense, $542; credit Prepaid Insurance, $542.
D)  debit Prepaid Insurance, $542; credit Insurance Expense, $542.

Question 16

If a business records expenses when paid, the company is using the:

Accepted Answer

A)  cash basis of accounting.
B)  accrual basis of accounting.
C)  adjustment basis of accounting.
D)  the expense basis of accounting.

Question 17

The balance in the Supplies account on the adjusted trial balance:

Accepted Answer

A)  is generally equal to the balance on the unadjusted trial balance.
B)  is generally greater than the balance on the unadjusted trial balance.
C)  is generally less than the balance on the unadjusted trial balance.
D)  has no relationship to the balance on the unadjusted trial balance.

Question 18

On January 1 Corporate Condos, Inc received $89,000 for one year's rent for building A. What would the adjusting entry be on March 31?

Accepted Answer

A)  Debit Rent Expense $7,417, credit Prepaid Rent $7,417
B)  Debit Unearned Rent Revenue $7,417, credit Rent Revenue $7,417
C)  Debit Rent Expense $22,250, credit Prepaid Rent $22,250
D)  Debit Unearned Rent Revenue $22,250, credit Rent Revenue $22,250

Question 19

Revenues, expenses and Dividends are called permanent accounts.

Accepted Answer

A) True 
 B)False

Question 20

With a deferred expense, an expense is incurred first and cash is paid later.

Accepted Answer

A) True 
 B)False

Exam 3: Adjusting and Closing Entries

Allied, Inc. bought a 3-year insurance policy on August 1 for $3,900. Assume no other adjusting entries have been done this fiscal year. The adjusting entry on December 31 would be:

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The total revenues of $6,700, total expenses of $3,900 and dividends of $900 were recorded in the closing entries. The net income for the month was:

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Supplies on hand were $800 at the start of the year. At the end of the year, it was determined that $450 of supplies had been used. What is the adjusting entry for supplies?

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The balance in the Supplies account on the adjusted trial balance:

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If a piece of equipment was purchased on September 1, it would have ________ months depreciation included in the adjusting entry for the calendar year.

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With a deferred expense, an expense is incurred first and cash is paid later.

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On January 1 Corporate Condos, Inc received $89,000 for one year's rent for building A. What would the adjusting entry be on March 31?

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The balance of Retained Earnings on the adjusted trial balance does not represent the final Retained Earnings balance on the Balance Sheet.

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During a recent week, incurred wages were $800. However, $480 of the wages had not been paid. Assume no other adjusting entries have been done this fiscal year. The adjusting entry for wages would be:

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The accounts that are NOT closed are:

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At the beginning of the period, the Supplies account has a balance of $700. At the end of the period, the balance in the account was $475. The adjusting entry would be:

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Revenues, expenses and Dividends are called permanent accounts.

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Expense accounts are closed by crediting them and debiting Retained Earnings.

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Of the following, which is NOT reported on the Balance Sheet?

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A company had a normal $51,000 cash balance on their adjusted trial balance. If revenues, expenses and dividends respectively were $91,000; $20,000 and $3,000 what amount of cash will be found on the post-closing trial balance?

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If revenues are recognized and recorded when earned, the company is using the:

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If a business records expenses when paid, the company is using the:

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The asset cost less accumulated depreciation equals salvage value.

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The recording of depreciation is related to a(n) :

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Item costs that have been incurred, but not yet paid, are called:

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