Question 1

Calculate the current ratio in each of the following separate cases.
 $$\begin{array} { | l | r | r | } 
\hline & \text { Curent Assets } & \text { Curent Liabilities } \
\hline \text { Case1 } & \$ 75,000 & \$ 30,000 \
\hline \text { Case 2 } & \$ 161,500 & \$ 85,000 \
\hline \text { Case 3 } & \$ 45,000 & \$ 53,000 \
\hline \text { Case 4 } & \$ 132,000 & \$ 127,000 \
\hline \text { Case 5 } & \$ 99,000 & \$ 110,000 \
\hline
\end{array}$$

Accepted Answer

Case 1: 2.5
Case 2.1...

Question 2

Western Company had $500 of store supplies available at the beginning of the current year.During the year Western Company purchased $2,750 worth of store supplies.On December 31 of this year $375 worth of store supplies remained.
a. Calculate the amount of Western Company's store supplies expense for the current year. (Show your calculations.)
b. Prepare the journal entry to adjust the supplies account.

Accepted Answer

None...

Question 3

When expenses exceed revenues,there is a net loss and the Income Summary account would have a credit balance.

Accepted Answer

A) True 
 B)False

Question 4

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Accepted Answer

A)  Depreciation Expense
B)  Unearned Depreciation
C)  Prepaid Depreciation
D)  Depreciation Value
E)  Book ValueF) D) and E)
G) A) and E)

Question 5

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.
The adjusting entry on December 31,2011 for Apricot would include:

Accepted Answer

A)  A debit to an expense for $1,250
B)  A debit to a prepaid expense for $1,250
C)  A credit to an expense for $3,750
D)  A debit to a prepaid expense for $3,750
E)  A credit to a liability for $1,250F) D) and E)
G) A) and E)

Question 6

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Accepted Answer

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Question 7

Which of the following is the usual final step in the accounting cycle?

Accepted Answer

A)  Journalizing transactions
B)  Preparing an adjusted trial balance
C)  Preparing a post-closing trial balance
D)  Preparing the financial statements
E)  Preparing a work sheetF) A) and D)
G) A) and B)

Question 8

Based on the following information,what would be the total on the Credit side of a post closing trial balance,assuming all accounts have a normal balance?
  Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,71 Office supplies 2,625 Rent expense 3,67 Land 37,153 Salaries expense 6,64 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained Earnings ?\begin{array}{lrlr}	ext { Cash } & \$ 6,754 & 	ext { Dividends } & \$ 2,000 \	ext { Accounts receivable } & 13,733 & 	ext { Consulting fees earned } & 13,71 \	ext { Office supplies } & 2,625 & 	ext { Rent expense } & 3,67 \	ext { Land } & 37,153 & 	ext { Salaries expense } & 6,64 \	ext { Office equipment } & 14,535 & 	ext { Telephone expense } & 560 \	ext { Accounts payable } & 6,463 & 	ext { Miscellaneous expense } & 280 \	ext { Common stock } & 54,490 & 	ext { Retained Earnings } & ?\end{array} Cash  Accounts receivable  Office supplies  Land  Office equipment  Accounts payable  Common stock ​$6,75413,7332,62537,15314,5356,46354,490​ Dividends  Consulting fees earned  Rent expense  Salaries expense  Telephone expense  Miscellaneous expense  Retained Earnings ​$2,00013,713,676,64560280?​

Accepted Answer

A)  $61,516
B)  $74,671
C)  $74,800
D)  $87,955
E)  $81,263 F) B) and C)
G) A) and E)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The Income Summary account is used to close the permanent accounts at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Question 11

The length of time covered by a set of periodic financial statements is referred to as the:

Accepted Answer

A)  Fiscal cycle
B)  Natural business year
C)  Accounting period
D)  Business cycle
E)  Operating cycleF) B) and E)
G) None of the above

Question 12

A company has 20 employees who each earn $500 per week for a 5-day week that begins on Monday.December 31 of 2011 is a Monday and all 20 employees worked that day.
a. Prepare the required adjusting journal entry to record accrued salaries on December 31,
2011.
b. Prepare the journal entry to record the payment of salaries on January 4, 2012.

Accepted Answer

a.
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Question 13

The accrual basis of accounting is a system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.

Accepted Answer

A) True 
 B)False

Question 14

An adjusting entry was made on December 31,2011 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2012 in the amount of $3,000?

Accepted Answer

A)    Salaries Expense 3,000 Cash 3,000\begin{array} { | l | r | r | } \hline 	ext { Salaries Expense } & 3,000 & \\hline 	ext { Cash } & & 3 , 0 0 0 \\hline\end{array} Salaries Expense  Cash ​3,000​3,000​​ 
B)    Salaries Payable 3,000 Cash 3,000\begin{array} { | l | r | r | } \hline 	ext { Salaries Payable } & 3,000 & \\hline 	ext { Cash } & & 3,000 \\hline\end{array} Salaries Payable  Cash ​3,000​3,000​​ 
C)    Salaries Payable 1,200 Cash 1,200\begin{array} { | l | r | r | } \hline 	ext { Salaries Payable } & 1,200 & \\hline 	ext { Cash } & & 1,200 \\hline\end{array} Salaries Payable  Cash ​1,200​1,200​​ 
D)    Salaries Expense 1,200 Salaries Payable 1,200\begin{array} { |l | r | r | } \hline 	ext { Salaries Expense } & 1,200 & \\hline 	ext { Salaries Payable } & & 1,200 \\hline\end{array} Salaries Expense  Salaries Payable ​1,200​1,200​​ 
E)    Salaries Payable 1,200 Salaries Expense 1,800 Cash 3,000\begin{array} { | l | r | r | } \hline 	ext { Salaries Payable } & 1,200 & \\hline 	ext { Salaries Expense } & 1,800 & \\hline 	ext { Cash } & & 3, 000 \\hline\end{array} Salaries Payable  Salaries Expense  Cash ​1,2001,800​3,000​​F) B) and C)
G) A) and E)

Question 15

The adjusted trial balance of E.Pace,Consultant is entered on the partial work sheet below.Complete the worksheet using the following information:
a. Salaries earned by employees that are unpaid and unrecorded, $500.
b. An inventory of supplies showed $800 of unused supplies still on hand.
c. Depreciation on equipment, $1,300.

Accepted Answer

The answer of The adjusted trial balance of E.Pace,Consultant is...

Question 16

What is the purpose of closing entries? Describe the closing process.

Accepted Answer

The purpose of closing entries is to tra...

Question 17

If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be:

Accepted Answer

A)  An overstatement of net income
B)  An overstatement of assets
C)  An overstatement of liabilities
D)  An overstatement of equity
E)  An understatement of liabilitiesF) All of the above
G) D) and E)

Question 18

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day to day operations of the business:

Accepted Answer

A)  Is referred to as depreciation expense
B)  Is referred to as accumulated depreciation
C)  Is shown on the income statement of the final period
D)  Is only recorded when the asset is disposed of
E)  Is referred to as an accrued assetF) A) and B)
G) A) and C)

Question 19

On January 1,Able Company purchased equipment costing $195,000 with an estimated salvage value of $15,000,and an estimated useful life of eight years.What is the amount that should be recorded as depreciation on December 31?

Accepted Answer

A)  $22,900
B)  $26,250
C)  $22,500
D)  $195,000
E)  $180,000F) A) and D)
G) B) and E)

Question 20

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Accepted Answer

A) True 
 B)False

Exam 3: Adjusting Accounts and Preparing Financial Statements

The length of time covered by a set of periodic financial statements is referred to as the:

Correct Answer
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Correct Answer
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Case 1: 2.5
Case 2.1...
View Answer

What is the purpose of closing entries? Describe the closing process.

Correct Answer
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The purpose of closing entries is to tra...
View Answer

When expenses exceed revenues,there is a net loss and the Income Summary account would have a credit balance.

Correct Answer
verified

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2011 for Apricot would include:

Correct Answer
verified

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Correct Answer
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View Answer

The Income Summary account is used to close the permanent accounts at the end of an accounting period.

Correct Answer
verified

The accrual basis of accounting is a system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.

Correct Answer
verified

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day to day operations of the business:

Correct Answer
verified

Correct Answer
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a.
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View Answer

Which of the following is the usual final step in the accounting cycle?

Correct Answer
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Correct Answer
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Correct Answer
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None...
View Answer

An adjusting entry was made on December 31,2011 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2012 in the amount of $3,000?

Correct Answer
verified

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Correct Answer
verified

If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be:

Correct Answer
verified

On January 1,Able Company purchased equipment costing $195,000 with an estimated salvage value of $15,000,and an estimated useful life of eight years.What is the amount that should be recorded as depreciation on December 31?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Correct Answer
verified

Exam 3: Adjusting Accounts and Preparing Financial Statements

The length of time covered by a set of periodic financial statements is referred to as the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCase 1: 2.5Case 2.1...View AnswerShow Answer

What is the purpose of closing entries? Describe the closing process.

Correct AnswerverifiedThe purpose of closing entries is to tra...View AnswerShow Answer

When expenses exceed revenues,there is a net loss and the Income Summary account would have a credit balance.

Correct AnswerverifiedShow Answer

On June 30,2011,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2011 for Apricot would include:

Correct AnswerverifiedShow Answer

On December 14 Bench Company received $3,700 cash for consulting services that will be performed in January.Bench records all such prepayments in a liability account.Prepare a general journal entry to record the $3,700 cash receipt.

Correct Answerverified\[\begin{array} { | l | l | r ...View AnswerShow Answer

The Income Summary account is used to close the permanent accounts at the end of an accounting period.

Correct AnswerverifiedShow Answer

The accrual basis of accounting is a system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.

Correct AnswerverifiedShow Answer

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day to day operations of the business:

Correct AnswerverifiedShow Answer

Correct Answerverified a. \[\begin{array} { | c | c | c | c | ...View AnswerShow Answer

Which of the following is the usual final step in the accounting cycle?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

An adjusting entry was made on December 31,2011 to accrue a salary expense of $1,200.Which of the following entries would be prepared to record the next payment of salaries on January,2012 in the amount of $3,000?

Correct AnswerverifiedShow Answer

A company paid $6,000 for a six-month insurance policy.The policy coverage began on February 1.On February 28,$100 of insurance expense must be recorded.

Correct AnswerverifiedShow Answer

If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be:

Correct AnswerverifiedShow Answer

On January 1,Able Company purchased equipment costing $195,000 with an estimated salvage value of $15,000,and an estimated useful life of eight years.What is the amount that should be recorded as depreciation on December 31?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Case 1: 2.5
Case 2.1...
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The purpose of closing entries is to tra...
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