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Exam 3: The Adjusting Process

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Question 21

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What effect will the following adjusting journal entry have on the accounting records?

A) increase net income
B) increase revenues
C) decrease expenses
D) decrease net book value

E) B) and D)
F) A) and B)

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Question 22

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Adjusting entries affect at least one

A) income statement account and one balance sheet account
B) revenue and the dividends account
C) asset and one stockholders' equity account
D) revenue and one capital stock account

E) None of the above
F) A) and C)

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Question 23

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If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)

Which of the following is not a characteristic of accrual basis of accounting?

On April 30, a business estimates depreciation on equipment used during the first year of operations to be $2,900. (a) Journalize the adjusting entry required as of April 30. (b) If the adjusting entry in (a) were omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of April 30?

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

Proper reporting of revenues and expenses in a period is due to the accounting period concept.

A fixed asset's market value is reflected in the Balance Sheet.

Encore Consulting is completing the accounting information processing at the end of the company's first fiscal year, December 31, 2011. The following trial balances are available. A. Reconstruct the adjusting entries and give a brief explanation of each. B. What is the amount of net income?

Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n)

At the end of the fiscal year, the following adjusting entries were omitted: Assuming that financial statements were prepared before the errors were discovered, indicate the effect of each error, considered individually, by inserting the dollar amount in the appropriate spaces. Insert "0" if the error does not affect the item.

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

Which of the following is an example of accrued revenue?

Which of the following is an example of an accrued expense?

The balance in the supplies account, before adjustment at the end of the year is $725. The proper adjusting entry if the amount of supplies on hand at the end of the year is $300 would be

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

Which account would normally not require an adjusting entry?

The estimated amount of depreciation on equipment for the current year is $5,300. Journalize the adjusting entry to record the depreciation.

The type of account and normal balance of Unearned Rent is