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Exam 4: Adjustments,Financial Statements,and Financial Results

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Question 61

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Match the term and its definition.There are more definitions than terms. -Income Before Income Taxes

A) Also known as balance sheet accounts.
B) Lists the balances of all temporary and permanent accounts to provide a check on the equality of the debits and credits.
C) Lists the balances of all accounts to check that revenues equal expenses.
D) The level of profit prior to considering income tax.
E) An account that is paired with another account and acts to reduce its book value.
F) Converts some of an asset's or a liability's book value into an expense or a revenue.
G) An account that must have a zero balance after closing entries have been made.
H) Adds new values into the balance sheet and income statement accounts.
I) The amount at which an asset or liability is reported in the financial statements.
J) Lists the balances of all permanent accounts to check that debits equal credits.
K) A journal entry that transfers net income or loss to the Retained Earnings account.
L) When revenue minus expenses is a negative number.
M) Entries made to update existing accounts and record new events.

N) I) and M)
O) G) and M)

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Question 62

Multiple Choice

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Which of the following trial balances is used as a source for preparing the income statement?

A) Unadjusted trial balance
B) Pre-adjusted trial balance
C) Adjusted trial balance
D) Post-closing trial balance

E) A) and C)
F) All of the above

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Question 63

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A company purchases software;it has an estimated useful life of three years.The adjustment to recognize amortization for the use of software would cause which of the following?

Maya Co.had $12,000 of supplies at the end of October.During November,the company bought $4,000 of supplies.At the end of November,the company had $2,000 of supplies remaining.Which of the following statements is not correct?

Three months of rent were prepaid on September 1 for $10,800,but two months have now expired,leaving only one month prepaid at October 31.What is the amount of rent expense that will be recorded in the related adjusting entry dated October 31?

Which of the following types of transactions could be an accrual adjustment?

Match each transaction with the type of entry that will be required at April 30,the company's year-end. -The company records income taxes.

How do accrual adjustments affect liabilities and expenses?

Prepaid Rent should be ________ and Rent Expense should be ________ for rent incurred during the period.

Fare Industries pays salaries and wages every two weeks.Salaries and wages amount to $180 a day and the company has a seven-day work week.On July 31,the company pays wages for the two weeks ending July 24 and recorded the related journal entry.The adjusting journal entry,dated July 31,to record unpaid wages and salaries owed since July 25 will include a debit to:

The deferral adjustment to record the amount of Deferred service revenue that is now earned includes a:

The process of allocating the cost of buildings,vehicles,and equipment to the accounting periods in which they are used is called:

Which of the following statements about adjusting entries is not correct?

In the closing process,expenses and dividends are zeroed out by ________ each account and revenues are zeroed out by ________ each account.

Which of the following will happen if the accrual adjusting entry is not made for revenue earned but not yet recorded?

Sail,Inc.pays its workforce on Fridays for a five-day workweek ending on that day.The payroll for a week is $165,000.If the accounting year-end falls on a Tuesday,the adjusting journal entry to record this will include a

Which of the following statements about the need for adjustments is not correct?

Which of the following statements is correct?

How do temporary accounts differ from permanent accounts?

Angela is a tenant of Bruce.On March 1,Angela paid Bruce $2,400 for 3 months of rent.On March 31,Angela's adjusting entries will include one with a debit to: