FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: Adjusting Accounts for Financial Statements

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Short Answer

Review LaterAdd Note

Review Later

An _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Correct Answer

verified

unadjusted...

View Answer

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

Income Summary is a temporary account only used for the closing process.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

The adjusted trial balance contains information pertaining to:

Adjusting entries result in a better matching of revenues and expenses for the period.

What is an adjusted trial balance? Why is it prepared?

The difference between the cost of an asset and the accumulated depreciation for that asset is called

__________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. _____________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.

The Income Statement columns of the work sheet prepared for Jolly Auto Service, Inc. at current year-end are shown below. In addition, Retained Earnings had a credit balance of $235,000 and Dividends had a debit balance of $40,000 at year end. Prepare closing journal entries for this company.

The accounting principle that requires revenue to be recorded when earned is the:

A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.

A company's December 31 work sheet for the current period appears below. Based on the information provided, what is net income for the current period? Unadjusted Trial Balance Adjustments Debit Credit Debit Credit Cash 975 Prepaid insurance 3,600 150 Supplies 180 70 Equipment 10,320 Accounts payable 1,140 Unearned fees 4,500 375 Common stock 9,180 Dividends 1,650 Fees earned 5,850 375 300 Rent expense 1,500 Salaries expense 2,100 315 Utilities expense 345 Insurance expense 150 Supplies expense 70 Depreciation expense-equipment 190 Accumulated depreciation-equipment 190 Salaries payable 315 Accounts receivable 300 Total 20,670 20,670 1,400 1,400

___________________ is the process of allocating the cost of plant assets to the income statement over their expected useful lives.

Identify the primary differences between accrual accounting and cash basis accounting.

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

Which of the following statements is incorrect?

Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $185,000, expenses of $103,700. The company paid $18,000 cash in dividends to the owner (sole stockholder) . The retained earnings account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses, not when cash is paid.

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Accrued revenues at the end of one accounting period often result in cash _______________________ in the next period.

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show correct balances even though all business transactions were properly recorded.