Question: At the end of the current year, fees of $3,700 have been earned but have not been billed to clients. Journalize the adjusting entry to record the accrued fees. If an amount box does not require an entry, leave it blank.
Answer Options:
Not applicable (short-answer journal entry)
Answer: Accounts Receivable 3,700
Fees Earned 3,700
Question: On December 15, Great Designs Company hired an independent contractor for a project. The contractor completed the project on December 29 and submitted an invoice for $2,425 which was due on January 15. The amount was duly paid on January 15.
Answer Options:
Not applicable (short-answer journal entries)
Answer: Dec. 29
Project (Contract) Expense 2,425
Accounts Payable 2,425
Jan. 15
Accounts Payable 2,425
Cash 2,425
Question: On January 1, Newman Company estimated its property tax to be $5,100 for the year.
Answer Options:
Not applicable (short-answer)
Answer: a. $425
b. $3,400
c.
Property Tax Expense 425
Property Tax Payable 425
Question: Ski Master Company pays weekly salaries of $18,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday. If an amount box does not require an entry, leave it blank.
Answer Options:
Not applicable (short-answer journal entry)
Answer: Salaries Expense 10,800
Salaries Payable 10,800
Question: A one-year insurance policy was purchased on June 1 for $2,400. Journalize the adjusting entry required on December 31. If an amount box does not require an entry, leave it blank.
Answer Options:
Not applicable (short-answer journal entry)
Answer: Dec. 31
Insurance Expense 1,400
Prepaid Insurance 1,400
Question: The supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies was on hand. Journalize the adjusting entry for supplies. If an amount box does not require an entry, leave it blank.
Answer Options:
Not applicable (short-answer journal entry)
Answer: Supplies Expense 4,900
Supplies 4,900
Question: Journalize the following transactions. If an amount box does not require an entry, leave it blank.
Answer Options:
Not applicable (short-answer journal entries)
Answer: a.
Dec. 1
Cash 18,000
Unearned Service Revenue 18,000
b.
Dec. 31
Unearned Service Revenue 3,600
Service Revenue 3,600
Question: Depreciation on an office building is $2,800. Journalize the adjusting entry required on December 31. If an amount box does not require an entry, leave it blank.
Answer Options:
Not applicable (short-answer journal entry)
Answer: Dec. 31
Depreciation Expense 2,800
Accumulated Depreciation 2,800
Second Set of 20 Questions
Question 1
Question: Comparing each line of a financial statement with a total amount from the same financial statement
Answer Options: a. is referred to as vertical analysis.
b. is referred to as horizontal analysis.
c. is referred to as profitability analysis.
d. None of these choices are correct.
Correct Answer: a. is referred to as vertical analysis.
Question: In a vertical analysis of an income statement,
Answer Options:
a. each item is stated as a percent of total expenses.
b. each item is stated as a percent of revenues or fees earned.
c. each item is stated as a percent of change from the previous period’s statement.
d. total revenues are stated as a percent of owner’s equity.
Answer: b. each item is stated as a percent of revenues or fees earned.
Question: The recording of adjusting entries is supported by the
Answer Options:
a. matching principle.
b. accuracy concept.
c. deferral concept.
d. cash basis of accounting.
Answer: a. matching principle.
Question: The $10,200 balance in Fellows Company’s prepaid insurance account represents 3 months of insurance. The insurance was purchased on December 1. Which of the following should be included in the adjusting journal entry on December 31?
Answer Options:
a. Debit to Insurance Expense for $10,200
b. Debit to Insurance Expense for $3,400
c. Debit to Prepaid Insurance for $3,400
d. Debit to Cash for $10,200
Answer: b. Debit to Insurance Expense for $3,400
Question: Unearned revenue
Answer Options:
a. represents future revenue.
b. is recorded in an asset account (other than Cash) when cash is received.
c. is recorded when services have been performed for the customer.
d. All of these choices are correct.
Answer: a. represents future revenue.
Question: If the following adjusting entry is omitted, what effect will this have on net income?
Answer Options:
a. Net income will be overstated by $8,100.
b. Net income will be understated by $8,100.
c. Net income will be overstated by $16,200.
d. It will have no effect on net income.
Answer: a. Net income will be overstated by $8,100.
Question: Using the following information, prepare a vertical analysis of 2 years’ income statements. Fees Earned is $156,500 for Year 2 and $152,200 for Year 1. Operating expenses are $126,800 for Year 2 and $131,545 for Year 1. Which of the following statements is true?
Answer Options:
a. Income from operations has decreased as a percentage of revenue.
b. Operating expenses have increased as a percentage of revenue.
c. Income from operations has increased as a percentage of revenue.
d. None of these choices are correct.
Answer: c. Income from operations has increased as a percentage of revenue.