Question 1 The Information for Preparing the Trial Balance on a Worksheet is obtained from:
Answer
A.General Ledger Accounts.
B.Owner’s Equity Statement.
C.Financial Statements.
D.Income Statement.
Question 2 Which of the following is NOT one of the Sets of Debit & Credit Columns on a Worksheet?
Answer
A.Adjusted Trial Balance.
B.Income Statement.
C.Owner’s Equity Statement.
D.Balance Sheet.
Question 3 Expenses which have Been Incurred (Used or Consumed) But Not Yet Paid in Cash or Recorded as Payable are Referred to as:
Answer
A.Prepaid Expenses.
B.Deferred Expenses.
C.None of the Above.
D.Accrued Expenses.
Question 4 Expenses like Insurance & Rent which have been Paid For in Advance of their Use are Referred to as:
Answer
A.Deferred Expenses.
B.None of the Above.
C.Accrued Expenses.
D.Future Expenses.
Question 5 Every Adjusting Entry Transaction Affects:
Answer
A.Two Income Statement Accounts.
B.Any two accounts.
C.A Balance Sheet Account & an Income Statement Account.
D.Two Balance Sheet Accounts.
Question 6 The Accrual Basis of Accounting Recognizies (Records) Revenue When It is _ _ _ & Recognizes (Records) Expenses When They are _ _ _.
Answer
A.Received ….. Paid.
B.Earned …….. Paid.
C.Received ….. Incurred
D.Earned …….. Incurred.
Question 7 If the Adjusting Entry for Suppliles Used Up (Consumed) was NOT Recorded Before the Company’s Financial Statements were Prepared, then:
Answer
A.Assets would be Overstated & Expenses would be Understated.
B.Liabilities would be Understated & Expenses would be Overstated.
C.Liabilities would be Understated & Expenses would be Overstated.
D.Liabilities would be Overstated & Expenses would be Understated.
Question 8 The Purpose of Making Closing Entries is to:
Answer
A.Close All lthe Permanent (Real) Accounts & Set Them to Zero (0) Balances.
B.Close All lthe Temporary (Nominal) Accounts & Set Them to Zero (0) Balances.
C.Update the General Ledger Accounts Before Preparing Financial Statements.
D.Close All lthe Ledger Accounts & Set Them to Zero (0) Balances.
Question 9 A Company’s Net Income is Recorded on the Worksheet in the Income Statement _ _ _ Column & the Balance Sheet _ _ _ Column.
Answer
A.Debit ….. Credit.
B.Credit …. Credit.
C.Debit ….. Debit.
D.Credit …. Debit.
Question 10 The Correct Sequence of Recording the Closing Entries is:
Answer
A.1st Expenses, 2nd Revenues, 3rd Income Summary, 4th Owner’s Drawing.
B.1st Revenues, 2nd Expenses, 3rd Income Summary, 4th Owner’s Drawing.
C.1st Income Summary, 2nd Owner’s Drawing, 3rd Expenses, 4th Revenues.
D.1st Income Summary, 2nd Owner’s Drawing, 3rd Revenues, 4th Expenses.
Question 11 A Post Closing Trial Balance includes Only Accounts for:
Answer
A.Assets, Liabilities, & Owner’s Capital.
B.Assets, Liabilities, & Owner’s Drawing.
C.Revenues & Expenses.
D.Revenues, Expenses, & Owner’s Capital.
Question 12 Which of the following is NOT a Current Asset Account?
Answer
A.Cash.
B.Accounts Receivable.
C.Prepaid Insurance.
D.Office Equipment.
Question 13 Employees Earning $250 a Day Worked Monday (the 30th) & Tuesday (the 31st) of the Current Month, but they were Not Due to be Paid Until Friday (the 3rd) of the Coming Month. The Correct General Journal to Record the Accrued Salaries on the 31st of the Current Month is:
Answer
A.Salaries Expense ………. 750
Salaries Payable ……………. 750
B.Salaries Payable. ………. 750
Salaries Expense ……………. 750
C.Salaries Expense ………. 500
Salaries Payable ……………. 500
D.Salaries Payable. ………. 750
Salaries Expense ……………. 750
Question 14 $400 of Fees Previously Received in Advance were Earned During the Current Month. The Correct Journal Entry to Record this Transaction is
Answer
A.Fees Earned ………… 400
Unearned Fees ……….. 400
B.Unearned Fees ……… 400
Fees Earned ……………. 400
C.Cash ……………………. 400
Fees Earned ……………. 400
D.Accounts Receivable .. 400
Fees Earned …………….. 400
Question 15 Al Green’s Emporium had a Net Income of $6,000 for it’s Fiscal Year. The Correct General Journal Entry for the 3rd Closing Entry to Close the Income Summary Account is:
Answer
A.Income Summary ………. 6,000
Green, Capital ………………….. 6,000
B.Green, Capital ………….. 6,000
Income Summary ………………. 6,000
C.Green, Drawing …………. 6,000
Green, Capital ………………….. 6,000
D.None of the above.
Question 16 $200 in Cash was Collected From a Customer on their Charge Account, but it was Erroneously Recorded as Service Revenue. the General Journal to Correct this Error is:
Answer
A.Accounts Receivable ……. 200
Cash ……………………………… 200
B.Cash ………………………….. 200
Accounts Receivable ………… 200
C.Service Revenue …………. 200
Accounts Receivable ………… 200
D.Accounts Receivable ……. 200
Service Revenue …………… 200
Question 17
A form used to summarize the adjusting entries & their effects on account balances and to facilitate the preparation of financial statements. It has five (5) sets of Debit & Credit columns including: Trial Balance, Adjustments, Adjusted Trial Balance, Income Statement, & Balance Sheet.
Includes long term assets such as patents on inventions, trademarks on symbols, & copyrights on printed works. While they have no physical substance, they do have monetary value based on the rights of ownership and can be bought & sold.
Internal transactions made at the end of the fiscal period to set all revenue & expense accounts to a zero (0) balance and to transfer the company’s net income or loss into the owner’s capital account.
An accounting system which recognizes (records) revenues when they are earned & expenses when they are incurred (regardless of whether cash has been received or paid out). It is preferred by accountants since its net income is a truer measure of a firm’s financial performance.
Revenue that has been both earned & not yet recorded or received in cash or receivables. An adjusting entry is made at the end of the accounting period to get the unrecorded revenue on the books.
The systematic allocation of the cost of a long term fixed asset (like equipment or a truck) over its useful life. This allocated cost represents the expense of using the asset in each accounting period. This decline in the value of an asset is due to physical wear & technological tear and obsolesce.
Occasional journal entries made rectify mistakes in recording previous transactions. The amount of the error is transferred out of the wrong account & into the right account so both accounts will have their correct balances.
Internal transactions which reflect events that have occured but which have not yet been recorded. They are made at the fiscal year to bring all account balances up to date before financial statements are prepared.
An accounting system which recognizes (records) revenue when cash is received & expenses when cash is paid out. It is frowned upon by accountants since it does not measure a firm’s “True” Net Income & can be easily manipulated to increase net income.
Assets including cash, accounts receivable, supplies, & merchandise inventory. They are expected to be converted in cash, sold, or consumed within one year or the firm’s normal operating cycle, whichever is longer.
Any twelve (12) month period used to measure a company’s annual profitability. It need not correspond the calendar year (Jan. 1 – Dec. 31) & often ends during a firm’s slow or off season.
Money which has been received from clients/customers in advance of earning it is initially recorded as a liability (Unearned Fees). An adjusting entry is made at the end of the accounting period to record that portion advance funds that has been earned and is now correctly classified as revenue.
Answer
A.Adjusting Entries
B.Deferred Revenue
C.Cash Basis Accounting
D.Current Assets
E.Fiscal Year
F.Depreciation
G.Intangible Asset
H.Accrued Revenues
I.Closing Entries
J.Worksheet
K.Accrual Basis Accounting
L.Correcting Entries
Question 18 Jefferson Company’s Classified Balance Sheet contained the following Asset Accounts.
$2,000 Supplies
$5,000 Short Term Investments
$9,000 Equipment
($1,000) Accumulated Depreciation−Equipment
$3,000 Accounts Receivable
$4,000 Prepaid Insurance
$8,000 Land
$6,000 Inventory
$7,000 Copyrights
What was the Total of the Current Assets of Jefferson Company?_ _ _ ($ Amount)
Question 19 What is the Total of the Plant, Property, & Equipment Assets in the Previous Question? _ _ _ ($ Amount)
Question 20 Xavier Inc. Worksheet Totals appeared as below:
Income Statement….Balance Sheet
..Debit…..Credit………Debit….Credit
58,000…..50,000…….34,000…42,000
Did Xavier Inc. have a Profit or Loss for the year? _ _ _
Question 21 How Many Closing Entries are made in the General Journal at the end of the fiscal year? _ _ _ (Number)
Question 22 The Office Supplies Account had a Balance of $850 at the Beginning of the Month. A Physical Count of Office Supplies at the End of the Month Revealed that there was only $325 Left. What is the $ Amount of the Adjusting Entry for the Office Supplies Used During the Month?
Question 23 One Month of 8 Month’s Worth of Prepaid Insurance Costing $1,200 Expired. What would be the Adjusting Entry for the Prepaid Insurance Used Up During the Month? _ _ _ ($ Amount)
