Question: Which of the following accounts will never require an adjusting entry?
Answer Options:
a. Salaries Expense
b. Cash
c. Fees Earned
d. Salaries Payable
Answer: b. Cash
Question: The adjusting entry for accrued expenses
Answer Options:
a. differs from the journal entry for an expense payable on account.
b. includes a debit to a payable account.
c. includes a credit to an expense account.
d. is the same as the journal entry for expenses on account.
Answer: d. is the same as the journal entry for expenses on account.
Question: Because collecting the adjustment data requires time, the adjusting entries are often
Answer Options:
a. entered and dated later than the last day of the period.
b. omitted.
c. estimated and recorded earlier than the last day of the period.
d. entered later but dated as of the last day of the period.
Answer: d. entered later but dated as of the last day of the period.
Question: The accumulated depreciation account is called a(n)
Answer Options:
a. prepaid asset account.
b. expense account.
c. liability account.
d. contra asset account.
Answer: d. contra asset account.
Question: Adjusting entries are dated
Answer Options:
a. at the beginning of the accounting period.
b. when an economic event occurs.
c. when cash is received.
d. at the end of the accounting period.
Answer: d. at the end of the accounting period.
Question: The adjusting entry for accrued revenue
Answer Options:
a. differs from the journal entry for revenue on account.
b. includes a debit to a revenue account.
c. includes a credit to an asset account.
d. is the same journal entry as for revenue on account.
Answer: d. is the same journal entry as for revenue on account.
Question: The book value of an asset is determined as
Answer Options:
a. cost of asset plus accumulated depreciation.
b. cost of asset minus accumulated depreciation.
c. cost of asset minus depreciation expense.
d. cost of asset plus depreciation expense.
Answer: b. cost of asset minus accumulated depreciation.
Question: The adjusted trial balance
Answer Options:
a. is for a period of time.
b. is at a specific date.
c. does not have a date.
d. None of these choices are correct.
Answer: b. is at a specific date.
Question: A month-end review of work performed during the month at an accounting firm for tax clients indicates there are a total of 80 tax returns completed for which customers owe $200 each. They remain unbilled at the end of the period. The adjusting journal entry should include a
Answer Options:
a. credit to Tax Preparation Revenue for $16,000.
b. debit to Tax Preparation Revenue for $16,000.
c. credit to Cash for $16,000.
d. debit to Cash for $16,000.
Answer: a. credit to Tax Preparation Revenue for $16,000.
Question: If the beginning balance of Accumulated Depreciation—Equipment is $18,000 and an adjusting journal entry for depreciation on the equipment for $3,000 is omitted at the end of the period, Accumulated Depreciation on the income statement will
Answer Options:
a. be overstated by $3,000.
b. be understated by $3,000.
c. be overstated by $18,000.
d. not be impacted because Accumulated Depreciation is reported on the balance sheet.
Answer: d. not be impacted because Accumulated Depreciation is reported on the balance sheet.
Question: Prepaid expenses
Answer Options:
a. are an advance payment of cash.
b. are an advance receipt of cash.
c. do not require an adjusting entry.
d. are similar to accrued expenses because both have been recorded.
Answer: a. are an advance payment of cash.
Question: Once the adjusted trial balance is balanced, it can be used to prepare
Answer Options:
a. the classified balance sheet and the income statement only.
b. the classified balance sheet only.
c. the income statement, the statement of owner’s equity, and the classified balance sheet.
d. None of these choices are correct.
Answer: c. the income statement, the statement of owner’s equity, and the classified balance sheet.
Question: An adjustment for unrecorded fees earned was posted during the current period. Which of the following would cause the adjusted trial balance totals to be unequal?
Answer Options:
a. The adjustment was completely omitted.
b. The adjustment was posted as a debit to Accounts Receivable for $950 and a credit to Fees Earned for $820.
c. The adjustment was posted as a debit to Fees Earned and a credit to Accounts Receivable.
d. The adjustment was posted as a debit to Cash and a credit to Fees Earned.
Answer: b. The adjustment was posted as a debit to Accounts Receivable for $950 and a credit to Fees Earned for $820.
Question: A specimen sent to the lab for examination, must be accompanied by
Answer Options:
A. a doctor’s order
B. a laboratory slip
C. the resident’s admission sheet
D. the nurse’s progress note
Answer: B. a laboratory slip