Question 1

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If as of December 31,2014,the rent of $100 for December had not been recorded or paid,the adjusting entry would include a

Accepted Answer

The adjusting entry would involve debiting Rent Expense for $100 since rent for December had not been recorded. This would increase the Rent Expense account, reflecting the actual expense incurred by the company. There is no need to credit Cash or Accumulated Rent, and Rent Payable is not used in this scenario since the rent has not yet been paid.

Question 2

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If services totaling $250 had been performed but not billed,

Accepted Answer

When services are performed but not billed, it increases Accounts Receivable and Service Revenue, indicating that the company expects to receive payment in the future for these services. The specific impact on Accounts Receivable or Service Revenue balances cannot be determined without additional information, but option B is correct in the context that it reflects an action consistent with recognizing revenue that has been earned but not yet billed. Options A and C provide specific outcomes without enough context to confirm their accuracy, and not all provided choices are correct, making D incorrect.

Question 3

Use this information pertaining to Tucson Company to answer the following question. 1.The corporation's Supplies account showed a beginning debit balance of $400 and supplies purchased of $1,600.There were $600 of supplies on hand at year end.
2)Depreciation on a building being depreciated over 5 years is estimated to be $10,000 per year.The building was purchased at the beginning of the prior year for $50,000.
3)A one-year insurance policy was purchased for $4,800.Five months have passed since the purchase.
4)Accrued interest on a note receivable amounted to $200.
5)The company received a $3,600 advance payment during the year on services to be performed.By the end of the year,one-third of the services had been performed.
Which of the following statements is correct regarding the building?

Accepted Answer

The adjusting entry to record depreciation will include a credit to Accumulated Depreciation - Building $10,000. The book value of the building at the end of the current year is $30,000. The Accumulated Depreciation - Building account will have a balance of $20,000 at the end of the current year.

Question 4

Failure to adjust for expired prepaid insurance at year end will result in an

Accepted Answer

Failure to adjust for expired prepaid insurance at year end will result in an overstatement of net income. This is because the amount paid for the insurance will be included as an expense, even though a portion of the insurance has already been used up or expired. Adjusting for the expired prepaid insurance will reduce the expenses and result in a more accurate net income figure.

Question 5

Which of the following situations is not an example of a deferral?

Accepted Answer

Deferrals involve recording transactions for expenses that have been paid but not yet incurred or revenues that have been received but not yet earned. Recording unrecorded, earned revenues (B) is not a deferral; it is an example of an accrual, where revenues are recognized when earned, regardless of when cash is received.

Question 6

What is the adjusting entry for that portion of revenue received in advance which has now been earned?

Accepted Answer

The adjusting entry for revenue received in advance that has now been earned is to debit the Unearned Revenue account and credit the Service Revenue account. Option B represents this adjusting entry. Option A is incorrect as it would only be used to record the initial receipt of cash for services to be provided in the future. Option C is incorrect as it would be used if revenue had not yet been earned but cash had been received. Option D is incorrect as it would be used if cash had been received for services provided in the past, but not yet recognized as revenue.

Question 7

Which of the following accounts is a contra account?

Accepted Answer

Accumulated Depreciation-Office Furniture is a contra account because it is used to reduce the carrying value of the related asset (Office Furniture) on the balance sheet.

Question 8

An adjusting entry made to record salaries earned but not yet paid or recorded is made with which of the following entries?

Accepted Answer

An adjusting entry made to record salaries earned but not yet paid or recorded is made with a debit to Salaries Expense (increase in expense) and a credit to Salaries Payable (increase in liability).

Question 9

Which of the following situations does not involve an accrual?

Accepted Answer

Depreciation is a non-cash expense that is recorded to allocate the cost of a long-term asset over its useful life. It does not involve an accrual of expenses or revenues. A, C, and D all involve accruals, which are necessary to properly match expenses and revenues in the accounting period in which they occur.

Question 10

When an adjusting entry is made debiting an expense account,the credit can be made to any of the following accounts except

Accepted Answer

An adjusting entry debiting an expense account represents an incurred expense that was not previously recorded. The credit side of the entry should be made to an account that reflects the source of the funds used to pay for the expense. Therefore, it should not be credited to a revenue account, as revenues represent the sources of funds earned from business operations. All the other options (liability, contra-asset account, and asset) could potentially be credited depending on the circumstances of the adjustment.

Question 11

Failure to record depreciation at year end will result in all of the following except

Accepted Answer

Depreciation expense reduces net income, which in turn reduces retained earnings, a component of owner's equity. Not recording depreciation would not affect total liabilities directly; it would lead to an overstatement of assets, net income, and owner's equity.

Question 12

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If on December 31,2014,the insurance still unexpired amounted to $20,the adjusting entry would contain a

Accepted Answer

The answer of Use this information to answer the following...

Question 13

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If on December 31,2014,supplies on hand were $120,the adjusting entry would contain a

Accepted Answer

The supplies account has a balance of $300 ($420 debit - $120 credit) which represents the cost of supplies purchased during the year. The supplies on hand as of December 31, 2014, is only $120. Therefore, the supplies expense must be adjusted by $180 ($300 - $120) to reflect the supplies used during the year. This requires a debit to Supplies Expense for $180 in the adjusting entry.

Question 14

The Supplies account had a $720 debit balance at the end of the accounting period before adjustment for supplies used,and an inventory of $160 of unused supplies was on hand.Which of the following is the required adjusting entry?

Accepted Answer

The correct adjusting entry is to debit Supplies Expense for the amount of supplies used ($720 - $160 = $560) and credit Supplies for the same amount, reflecting the decrease in supplies on hand.

Question 15

Which of the following is an example of an accrual?

Accepted Answer

An accrual is an expense or revenue that has been incurred but not yet paid or received. Wages expense incurred but not yet paid is an example of an accrual. The other choices are not accruals - A is an example of a purchase transaction, C is an example of unearned revenue, and D is an example of prepaid expense.

Question 16

The carrying value of a depreciable asset purchased 3 years ago equals

Accepted Answer

The carrying value of a depreciable asset is the original cost of the asset minus the accumulated depreciation recorded since the asset was acquired. Therefore, option B, original cost minus accumulated depreciation, is the correct choice. Option A is incorrect because it only takes into account the depreciation for the current period, instead of the accumulated depreciation. Option C is incorrect because it refers to the replacement cost, which is not the same as the carrying value. Option D is incorrect because it refers to the market value, which is not necessarily the same as the carrying value.

Question 17

The principal difference between depreciation expense and most other types of expenses is that

Accepted Answer

Depreciation expense is a non-cash expense that allocates the cost of a tangible asset over its useful life. The accumulated depreciation, which is the total amount of depreciation expense, is reported on the balance sheet as a contra asset account.

Question 18

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If the estimated depreciation for office equipment were $350,the adjusting entry would contain a

Accepted Answer

Depreciation is recorded by debiting Depreciation Expense and crediting Accumulated Depreciation. Accumulated Depreciation is a contra asset account that reduces the book value of the asset over time, reflecting its use and wear.

Question 19

Use this information pertaining to Tucson Company to answer the following question. 1.The corporation's Supplies account showed a beginning debit balance of $400 and supplies purchased of $1,600.There were $600 of supplies on hand at year end.
2)Depreciation on a building is estimated to be $10,000.
3)A one-year insurance policy was purchased for $4,800.Five months have passed since the purchase.
4)Accrued interest on a note receivable amounted to $200.
5)The company received a $3,600 advance payment during the year on services to be performed.By the end of the year,one-third of the services had been performed.
The adjusting entry for Supplies is

Accepted Answer

The answer of Use this information pertaining to Tucson Company...

Question 20

Which of the following pairs of accounts could possibly appear in the same adjusting entry?

Accepted Answer

Service Revenue and Unearned Revenue are both revenue accounts and may appear in the same adjusting entry if the company has received payment for services that have not yet been provided. The unearned revenue account would be reduced, and the service revenue account would be increased to reflect the amount of revenue earned during the period. The other account pairs listed do not have a logical relationship that would cause them to appear in the same adjusting entry.

Quiz 3: Adjusting the Accounts

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If as of December 31,2014,the rent of $100 for December had not been recorded or paid,the adjusting entry would include a

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If services totaling $250 had been performed but not billed,

Failure to adjust for expired prepaid insurance at year end will result in an

Which of the following situations is not an example of a deferral?

What is the adjusting entry for that portion of revenue received in advance which has now been earned?

Which of the following accounts is a contra account?

An adjusting entry made to record salaries earned but not yet paid or recorded is made with which of the following entries?

Which of the following situations does not involve an accrual?

When an adjusting entry is made debiting an expense account,the credit can be made to any of the following accounts except

Failure to record depreciation at year end will result in all of the following except

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If on December 31,2014,the insurance still unexpired amounted to $20,the adjusting entry would contain a

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If on December 31,2014,supplies on hand were $120,the adjusting entry would contain a

The Supplies account had a $720 debit balance at the end of the accounting period before adjustment for supplies used,and an inventory of $160 of unused supplies was on hand.Which of the following is the required adjusting entry?

Which of the following is an example of an accrual?

The carrying value of a depreciable asset purchased 3 years ago equals

The principal difference between depreciation expense and most other types of expenses is that

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If the estimated depreciation for office equipment were $350,the adjusting entry would contain a

Which of the following pairs of accounts could possibly appear in the same adjusting entry?