Question 1

On January 1st,Power House Co.prepays the year's rent,$10,140 to its landlord.Prepare the journal entry by recording the prepayment to an asset account.

Accepted Answer

The answer of On January 1st,Power House Co.prepays the year's...

Question 2

The adjusting entry to adjust supplies was omitted at the end of the year.This would effect the income statement by having
A)expenses understated and therefore net income overstated
B)revenues understated and therefore net income understated
C)expenses understated and therefore net income understated
D)expenses overstated and therefore net income understated

Accepted Answer

The answer of The adjusting entry to adjust supplies was...

Question 3

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 were on hand.Prepare the adjusting entry for supplies.

Accepted Answer

The answer of The Supplies account had a beginning balance...

Question 4

A one-year insurance policy was purchased on June 1,2011 for $1,500.The adjusting entry on December 31,2011 would be

Accepted Answer

The answer of A one-year insurance policy was purchased on...

Question 5

For the year ending December 31,Orion,Inc.mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2)unearned revenue of $4,200 that was earned,and (3)insurance of $5,000 that expired.For the year ending December 31,what is the effect of these errors on revenues,expenses,and net income?
A)Revenues are overstated by $4,200.
B)Net income is overstated by $2,300.
C)Expenses are overstated by $6,500.
D)Expenses are understated by $3,500.

Accepted Answer

The omission of the adjusting entries for the supplies used, unearned revenue earned, and the expired insurance would result in an overstatement of assets and an understatement of expenses. This would lead to an overstated net income by $2,300 ([$4,200 - $1,500] - $5,000 = $2,300). Therefore, choice B is the correct answer.

Question 6

Protonix Corp has a payroll of $8,000 for a five-day workweek.Its employees are paid each Friday for the five-day workweek.The adjusting entry on December 31,2015 assuming the year ends on Thursday would be:

Accepted Answer

The answer of Protonix Corp has a payroll of $8,000...

Question 7

Which of the accounting steps in the accounting process below would be completed last?
A)preparing the adjusted trial balance
B)posting
C)preparing the financial statements
D)journalizing

Accepted Answer

Preparing the financial statements is typically completed as the final step in the accounting process after all other steps have been completed.

Question 8

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?
A)Fees Earned
B)Accounts Receivable
C)Unearned Fees
D)Depreciation Expense

Accepted Answer

Depreciation Expense is an example of an account that is usually adjusted at the end of an accounting period to reflect the decrease in value of a fixed asset. This adjustment is necessary because it is not recorded at the time of purchase but as time passes, the value of fixed assets decreases. Therefore, it is likely to appear on the adjusted trial balance but is not present on the unadjusted trial balance. The other accounts in the options are likely to appear on both the adjusted and unadjusted trial balances.

Question 9

Explain the difference between accrual-basis accounting and cash-basis accounting.

Accepted Answer

The answer of Explain the difference between accrual-basis accounting and...

Question 10

When is the adjusted trial balance prepared?
A)before adjusting journal entries are posted
B)after adjusting journal entries are posted
C)after the adjusting journal entries are journalized
D)before the adjusting journal entries are journalized

Accepted Answer

The adjusted trial balance is prepared after the adjusting journal entries are posted in order to ensure that all accounts have been properly adjusted and the balances are correct before creating the financial statements. Therefore, option B is the correct answer.

Question 11

On March 1,a business paid $3,600 for a twelve month liability insurance policy.On April 1 the same business entered into a two-year rental contract for equipment at a total cost of $18,000.Determine the following amounts:
(a)insurance expense for the month of March
(b)prepaid insurance as of March 31
(c)equipment rent expense for the month of April
(d)prepaid equipment rental as of April 30

Accepted Answer

The answer of On March 1,a business paid $3,600 for...

Question 12

What is the purpose of the adjusted trial balance?
A)to verify that all of the adjusting entries have been posted
B)to verify that the net income (loss)is correctly reported
C)to verify that no adjusting journal entry has been omitted
D)to verify the equality of the debit and credit balances

Accepted Answer

The purpose of the adjusted trial balance is to verify the equality of the debit and credit balances after accounting for all adjusting entries. This ensures the accuracy of the financial statements and that no errors or omissions were made. The other options are also important aspects of the accounting process, but do not specifically relate to the purpose of the adjusted trial balance.

Question 13

A one-year insurance policy was purchased on October 1,2011 for $4,200.The adjusting entry on December 31,2011 would be

Accepted Answer

The answer of A one-year insurance policy was purchased on...

Question 14

Match between columns
                        Premises: Fees received but not yet earned.
Property tax accrual
Fees earned but not yet received.
Accumulated depreciation.

Accepted Answer

The Answer of unearned revenue and accrued expense and accrued is...

Question 15

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a:
A)debit to Salary Expense of $8,000.
B)debit to Salary Payable of $8,000
C)credit to Salary Expense of $16,000
D)credit to Salary Payable of $16,000

Accepted Answer

The answer of A business pays bi-weekly salaries of $20,000...

Question 16

Two income statements for PS Enterprises are shown below:

Prepare a vertical analysis of PS Enterprises' income statements.Has operating income increased or decreased as a percentage of revenue?
A)Yes,increased by 5%
B)Yes,increased by 111%
C)No,decreased by 5%.
D)None are correct.

Accepted Answer

To prepare a vertical analysis of PS Enterprises' income statements, each item on the income statements is expressed as a percentage of sales. In the 20X2 income statement, operating income is $370,000 and revenue is $6,800,000, which results in an operating income percentage of 5.44%. In the 20X1 income statement, operating income is $390,000 and revenue is $8,000,000, which results in an operating income percentage of 4.88%. Therefore, operating income has decreased as a percentage of revenue by approximately 5%. Therefore, the correct answer is C.

Question 17

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Accepted Answer

The answer of On January 1, DogMart Company purchased a...

Question 18

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The last pay day of December is Friday,December 27.Assuming the next pay period begins on Monday,December 30 and the proper adjusting entry is journalized at the end of the fiscal period (December 31).The entry for the payment of the payroll on Friday,January 10 includes a:
A)debit to Salary Expense of $16,000
B)debit to Salary Expense of $4,000
C)credit to Salary Payable of $16,000
D)credit to Salary Payable of $4,000

Accepted Answer

The answer of A business pays bi-weekly salaries of $20,000...

Question 19

Depreciation on Office Equipment is $3,300.The adjusting entry on December 31,2011 would be

Accepted Answer

The answer of Depreciation on Office Equipment is $3,300.The adjusting...

Question 20

The net income reported on the income statement is $58,000.However,adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is
A)$56,700
B)$58,000
C)$55,800
D)$54,500

Accepted Answer

The answer of The net income reported on the income...

Quiz 3: The Adjusting Process

On January 1st,Power House Co.prepays the year's rent,$10,140 to its landlord.Prepare the journal entry by recording the prepayment to an asset account.

The adjusting entry to adjust supplies was omitted at the end of the year.This would effect the income statement by having

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 were on hand.Prepare the adjusting entry for supplies.

A one-year insurance policy was purchased on June 1,2011 for $1,500.The adjusting entry on December 31,2011 would be

Protonix Corp has a payroll of $8,000 for a five-day workweek.Its employees are paid each Friday for the five-day workweek.The adjusting entry on December 31,2015 assuming the year ends on Thursday would be:

Which of the accounting steps in the accounting process below would be completed last?

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Explain the difference between accrual-basis accounting and cash-basis accounting.

When is the adjusted trial balance prepared?

What is the purpose of the adjusted trial balance?

A one-year insurance policy was purchased on October 1,2011 for $4,200.The adjusting entry on December 31,2011 would be

Classify the following items as:

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a:

Two income statements for PS Enterprises are shown below: Prepare a vertical analysis of PS Enterprises' income statements.Has operating income increased or decreased as a percentage of revenue?

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Depreciation on Office Equipment is $3,300.The adjusting entry on December 31,2011 would be

The net income reported on the income statement is $58,000.However,adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300.Net income,as corrected,is