Question 1

Match the terms below with the correct definitions.
 
-Steps in the accounting process, completed during the fiscal year

Accepted Answer

The accounting cycle refers to the steps taken during the fiscal year to complete the accounting process, including recording transactions, preparing financial statements, and adjusting entries.

Answer: A 
 The fiscal year is the 12-month period for which a business or organization prepares its financial statements.

Answer: H 
 Adjusting entries are made at the end of the accounting cycle to ensure that accounts accurately reflect financial transactions and events that occurred during the period.

Answer: I 
 Depreciation refers to the gradual decrease in value of a long-term asset over time, due to wear and tear or obsolescence.

Answer: B 
 Trade-in value is the amount of credit a business may receive when trading in an asset, such as a vehicle, for a new one.

Answer: C 
 Accrued wages refer to unpaid wages that have been earned by employees but have not yet been paid out by the business.

Answer: D 
 A work sheet is a document used during the accounting process to summarize data and prepare financial statements.

Answer: E 
 A contra account is a type of account used in the double-entry accounting system to offset the balance of another account.

Answer: G 
 Mixed accounts are accounts that represent a combination of different types of transactions or events, such as interest earned on investments and service fees charged to customers.

Question 2

A company produced a net income of $28,000 but failed to adjust for $1,600 in depreciation of equipment and $1,400 in accrued wages. Explain how these errors have affected net income. What will be the corrected net income?

Accepted Answer

The answer of A company produced a net income of...

Question 3

Match the terms below with the correct definitions.
 
-Amount that one would expect to be the value of an asset when its estimated life is over

Accepted Answer

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

Question 4

Match the terms below with the correct definitions.
 
-Working paper that is used to record adjustments and gather information to prepare the financial statements

Accepted Answer

A work sheet is a working paper used to record adjustments and gather information to prepare the financial statements.

Answer: H 
 Adjusting refers to the process of making entries in the books to reflect the true financial position of a company as of the end of the accounting period.

Answer: I 
 Depreciation refers to the process of allocating the cost of a tangible asset over its useful life.

The other terms are defined as follows:

A) Fiscal year - a 12-month period that a company or organization uses for accounting purposes

B) Trade-in value - the value that a dealer will pay for a used car or other asset when it is traded in as part of a new purchase

C) Accrued wages - wages that have been earned by employees but not yet paid by the employer

E) Contra account - an account that is used to offset another account on the balance sheet

F) Accounting cycle - the process of recording, classifying, and summarizing financial transactions to prepare financial statements

G) Mixed accounts - accounts that contain both debit and credit entries, which can make them difficult to analyze and reconcile.

Question 5

Match the terms below with the correct definitions.
 
-Amount of unpaid wages owed to employees for wages earned between the last pay period end and the end of the fiscal period

Accepted Answer

Accrued wages are the amount of unpaid wages owed to employees for wages earned between the last pay period end and the end of the fiscal period.

Question 6

Explain the differences between net income and net loss.

Accepted Answer

The answer of Explain the differences between net income and...

Question 7

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

Accepted Answer

A contra account is an account used in an accounting system that is opposite to another account. It is used to reduce the value of the original account directly to show the net balance. For example, "Accumulated Depreciation" is a contra asset account used to reduce the value of asset accounts.

Question 8

The trial balance of B. C. Towe, Quick Cleaners, for the year ended December 31 is presented below.
  Data for the adjustments are as follows: 
a.Depreciation of equipment, $3,010.
b.Depreciation of van, $2,200.
c.Accrued wages, $660.
d.Insurance expired, $450.
e.Supplies remaining, $170.Instructions:

Accepted Answer

The answer of The trial balance of B. C. Towe,...

Question 9

Why are adjusting entries necessary to portray a more accurate picture of a company's financial position?

Accepted Answer

The answer of Why are adjusting entries necessary to portray...

Question 10

Explain the matching principle and provide two examples of how it is applied in accounting records.

Accepted Answer

The answer of Explain the matching principle and provide two...

Question 11

Match the terms below with the correct definitions.
 
-Twelve consecutive months used by a business as its annual accounting period

Accepted Answer

A fiscal year is a consecutive 12-month period that a business chooses to use as its annual accounting period.

Answer: B 
 Trade-in value refers to the value of an old asset that is being traded in for a new one.

Answer: C 
 Accrued wages are wages that have been earned by employees but have not yet been paid out.

Answer: D 
 A worksheet is a document used by accountants to organize and summarize data during the accounting cycle.

Answer: E 
 A contra account is an account that is used to offset another account.

Answer: F 
 The accounting cycle is a series of steps that accountants follow to properly record business transactions and prepare financial statements.

Answer: G 
 Mixed accounts are accounts that have both a debit and credit balance.

Answer: H 
 Adjusting entries are made at the end of an accounting period to ensure that financial statements accurately reflect the company's financial position.

Answer: I 
 Depreciation is the gradual loss of an asset's value over time due to wear and tear, obsolescence, or other factors.

Question 12

Newkirk Company began operations on January 1. The trial balance as of December 31 is presented below.
  Data for the adjustments are as follows: 
a.The office equipment has a life of five years with an estimated trade-in value of $600 at the end of five years.
b.Weekly wages amount to $180 for a five-day week.As of December 31, three days' wages have accrued.
c.Prepaid Insurance represents a twelve-month policy beginning March 1 of the year.
d.Supplies used during December, $215.Instructions:
Record the adjusting entries for Newkirk Company in general journal form.

Accepted Answer

The answer of Newkirk Company began operations on January 1....

Question 13

Match the terms below with the correct definitions.
 
-Allocation of the cost of a plant asset over its estimated life

Accepted Answer

Depreciation is the allocation of the cost of a plant asset over its estimated life.

Question 14

Classify each of the following accounts as to whether they would appear on a balance sheet (BS) or income statement (IS).

Accepted Answer

The answer of Classify each of the following accounts as...

Question 15

Match the terms below with the correct definitions.
 
-Accounts that are partly income statement and partly balance sheet accounts

Accepted Answer

Mixed accounts, also known as nominal accounts, have characteristics of both income statement accounts (which record revenues and expenses) and balance sheet accounts (which record assets, liabilities, and equity). This makes them partly income statement and partly balance sheet accounts.

Question 16

Explain what book value is and provide an example of how it is calculated.

Accepted Answer

The answer of Explain what book value is and provide...

Question 17

Match the terms below with the correct definitions.
 
-Process of recording internal transactions at the end of the fiscal period for updating some accounts

Accepted Answer

Adjusting entries are made at the end of the fiscal period to update accounts and ensure that they reflect the correct balances.

Quiz 4: Adjusting Entries and the Work Sheet

Match the terms below with the correct definitions. -Steps in the accounting process, completed during the fiscal year

A company produced a net income of $28,000 but failed to adjust for $1,600 in depreciation of equipment and $1,400 in accrued wages. Explain how these errors have affected net income. What will be the corrected net income?

Match the terms below with the correct definitions. -Amount that one would expect to be the value of an asset when its estimated life is over

Match the terms below with the correct definitions. -Working paper that is used to record adjustments and gather information to prepare the financial statements

Match the terms below with the correct definitions. -Amount of unpaid wages owed to employees for wages earned between the last pay period end and the end of the fiscal period

Explain the differences between net income and net loss.

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

The trial balance of B. C. Towe, Quick Cleaners, for the year ended December 31 is presented below. Data for the adjustments are as follows: a.Depreciation of equipment, $3,010. b.Depreciation of van, $2,200. c.Accrued wages, $660. d.Insurance expired, $450. e.Supplies remaining, $170.Instructions:

Why are adjusting entries necessary to portray a more accurate picture of a company's financial position?

Explain the matching principle and provide two examples of how it is applied in accounting records.

Match the terms below with the correct definitions. -Twelve consecutive months used by a business as its annual accounting period

Match the terms below with the correct definitions. -Allocation of the cost of a plant asset over its estimated life

Classify each of the following accounts as to whether they would appear on a balance sheet (BS) or income statement (IS).

Match the terms below with the correct definitions. -Accounts that are partly income statement and partly balance sheet accounts

Explain what book value is and provide an example of how it is calculated.

Match the terms below with the correct definitions. -Process of recording internal transactions at the end of the fiscal period for updating some accounts