Question 1

The adjusting entry to record depreciation would involve a

Accepted Answer

A)  debit to Depreciation Expense.
B)  credit to Equipment.
C)  credit to Cash.
D)  debit to Accumulated Depreciation.E) A) and D)
F) B) and C)

Question 2

The entry to record expired insurance is omitted. This error causes

Accepted Answer

A)  assets to be overstated.
B)  expenses to be overstated.
C)  liabilities to be overstated.
D)  liabilities to be understated.
E)  an increase in liabilities on the balance sheet.F) A) and E)
G) C) and D)

Question 3

If revenues are larger than expenses, the resulting net income would be recorded

Accepted Answer

A)  on the credit side of the income statement columns of the work sheet.
B)  on the debit side of the balance sheet columns of the work sheet.
C)  on the debit side of the income statement columns of the work sheet.
D)  none of the answers listed.E) None of the above
F) B) and D)

Question 4

If an accountant fails to make an adjusting entry at the end of a fiscal period to record expired insurance, the omission will cause

Accepted Answer

A)  total assets to be understated.
B)  total expenses to be understated.
C)  total revenue to be understated.
D)  liabilities to be overstated.
E)  liabilities to be understated.F) C) and E)
G) A) and E)

Question 5

The balance in the Prepaid Insurance account before adjustment at the end of the year is $720, which represents twelve months' insurance purchased on December 1. The adjusting entry required for the month of December, on December 31, the end of the fiscal year, is

Accepted Answer

A)  debit Insurance Expense, $60; credit Prepaid Insurance, $60.
B)  debit Insurance Expense, $660; credit Prepaid Insurance, $660.
C)  debit Prepaid Insurance, $60; credit Insurance Expense, $60.
D)  debit Prepaid Insurance, $720; credit Insurance Expense, $720.
E)  debit Insurance Expense, $60; credit Insurance Payable, $60.F) A) and E)
G) A) and B)

Question 6

The adjusting entry to record the amount of prepaid insurance used or expired would involve a

Accepted Answer

A)  debit to Prepaid Insurance.
B)  credit to Cash.
C)  credit to Insurance Payable.
D)  debit to Insurance Expense.E) None of the above
F) All of the above

Question 7

The type of account and normal balance of Accumulated Depreciation are

Accepted Answer

A)  contra asset, debit.
B)  asset, credit.
C)  asset, debit.
D)  liability, credit.
E)  contra asset, credit.F) D) and E)
G) C) and E)

Question 8

Dowdy Co. has equipment with a cost of $30,000 and accumulated depreciation of $22,000. What is the book value of the equipment?

Accepted Answer

A)  $8,000
B)  $30,000
C)  $52,000
D)  $22,000E) B) and D)
F) A) and D)

Question 9

The adjusting entry to record the accrual of wages would involve a

Accepted Answer

A)  debit to Wages Expense.
B)  credit to Cash.
C)  debit to Wages Payable.
D)  none of the answers listedE) None of the above
F) B) and C)

Question 10

The Balance Sheet credit column of the work sheet would include which of the following account(s) ?

Accepted Answer

A)  assets, drawing
B)  expenses
C)  accumulated depreciation, liabilities, capital
D)  revenueE) None of the above
F) B) and C)

Question 11

Assume that Sophia Co. pays its employees $250 per day and that pay day falls on Friday. Sophia Co. employees work Monday through Friday. Assume the last day of the fiscal period falls on Wednesday, the adjustment for accrued wages would be recorded in the work sheet as a:

Accepted Answer

A)  credit to wages payable, $1,250.
B)  debit to wages expense, $1,250.
C)  debit to wages expense, $750.
D)  credit to cash, $750.E) A) and B)
F) A) and C)

Question 12

The adjusted trial balance debit column of the work sheet would include which of the following account(s) ?

Accepted Answer

A)  assets, liabilities, expenses
B)  assets, drawing, expenses
C)  assets, revenue, accumulated depreciation
D)  accumulated depreciation, liabilities, capitalE) A) and D)
F) C) and D)

Question 13

The amount of net income will appear on the debit side of the Income Statement columns on a work sheet,

Accepted Answer

A)  if total revenue exceeded total expenses for the period.
B)  if withdrawals have been made during the period.
C)  if total assets exceeded total liabilities for the period.
D)  if total expenses exceeded total revenue for the period.
E)  if net income exceeds the owner's withdrawals.F) B) and D)
G) C) and E)

Question 14

Accumulated depreciation appears on the income statement.

Accepted Answer

A) True 
 B)False

Question 15

Match the terms below with the correct definitions.
 
-Account that is contrary to or a deduction from another account

Accepted Answer

The answer of Match the terms below with the correct...

Question 16

Assuming a normal balance, which of the following is correct concerning the balance sheet columns of the work sheet?

Accepted Answer

A)  Assets are shown as debits.
B)  Liabilities are shown as debits.
C)  The drawing account is shown as a credit.
D)  Revenues are shown as credits.E) A) and B)
F) A) and C)

Question 17

A net loss should be shown as a(n)

Accepted Answer

A)  addition on the Balance Sheet.
B)  addition on the Income Statement.
C)  subtraction on the Statement of Owner's Equity.
D)  addition on the Statement of Owner's Equity.E) A) and B)
F) A) and C)

Question 18

Foster Company bought equipment on January 3 of this year for $10,000. At the time of purchase, the equipment was estimated to have a useful life of nine years and a trade-in value of $1,000 at the end of nine years. Using the straight-line method, the amount of one year's depreciation is

Accepted Answer

A)  $1,111.
B)  $1,222.
C)  $1,000.
D)  $9,000.
E)  $2,000.F) None of the above
G) B) and E)

Question 19

Explain the differences between net income and net loss.

Accepted Answer

Net income or net loss is calc...

Question 20

If the amount of net income for the current period is less than the amount of the owner's withdrawals, there will be a(n)

Accepted Answer

A)  decrease in the Cash account.
B)  increase in the owner's Capital account.
C)  decrease in the owner's Capital account.
D)  increase in the Cash account.
E)  increase in liabilities on the balance sheet.F) C) and D)
G) A) and E)

Exam 4: Adjusting Entries and the Work Sheet

Match the terms below with the correct definitions. -Account that is contrary to or a deduction from another account

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If revenues are larger than expenses, the resulting net income would be recorded

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The balance in the Prepaid Insurance account before adjustment at the end of the year is $720, which represents twelve months' insurance purchased on December 1. The adjusting entry required for the month of December, on December 31, the end of the fiscal year, is

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If an accountant fails to make an adjusting entry at the end of a fiscal period to record expired insurance, the omission will cause

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Accumulated depreciation appears on the income statement.

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The amount of net income will appear on the debit side of the Income Statement columns on a work sheet,

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The adjusted trial balance debit column of the work sheet would include which of the following account(s) ?

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Foster Company bought equipment on January 3 of this year for $10,000. At the time of purchase, the equipment was estimated to have a useful life of nine years and a trade-in value of $1,000 at the end of nine years. Using the straight-line method, the amount of one year's depreciation is

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The entry to record expired insurance is omitted. This error causes

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Explain the differences between net income and net loss.

Correct AnswerverifiedNet income or net loss is calc...View AnswerShow Answer

A net loss should be shown as a(n)

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If the amount of net income for the current period is less than the amount of the owner's withdrawals, there will be a(n)

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The adjusting entry to record depreciation would involve a

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Dowdy Co. has equipment with a cost of $30,000 and accumulated depreciation of $22,000. What is the book value of the equipment?

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Assuming a normal balance, which of the following is correct concerning the balance sheet columns of the work sheet?

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The adjusting entry to record the accrual of wages would involve a

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The adjusting entry to record the amount of prepaid insurance used or expired would involve a

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The type of account and normal balance of Accumulated Depreciation are

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The Balance Sheet credit column of the work sheet would include which of the following account(s) ?

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Assume that Sophia Co. pays its employees $250 per day and that pay day falls on Friday. Sophia Co. employees work Monday through Friday. Assume the last day of the fiscal period falls on Wednesday, the adjustment for accrued wages would be recorded in the work sheet as a:

Correct AnswerverifiedShow Answer

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Net income or net loss is calc...
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