Question 1

Which of the accounting steps in the accounting process below would be completed last?

Accepted Answer

Preparing the financial statements is typically the final step in the accounting process after all adjusting entries have been made and the adjusted trial balance has been prepared.

Question 2

A one-year insurance policy was purchased on June 1, 2011 for $1,500. The adjusting entry on December 31, 2011 would be

Accepted Answer

The answer of A one-year insurance policy was purchased on...

Question 3

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.
a) Fees received but not yet earned.
b) Fees earned but not yet received.
c) Accumulated depreciation.
d) Property tax accrual

Accepted Answer

The answer of Classify the following items as: (1) prepaid...

Question 4

The Supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies were on hand. Prepare the adjusting entry for supplies.

Accepted Answer

The answer of The Supplies account had a beginning balance...

Question 5

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

Accepted Answer

The answer of At the end of the fiscal year,...

Question 6

On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts:

Accepted Answer

The answer of On March 1, a business paid $3,600...

Question 7

DogMart Company records depreciation to Office Equipment and Production Equipment. Depreciation for the period ending December 31 is $1,400 for Office Equipment and $2,650 for Production Equipment. Prepare two entries to record the Office Equipment and Production Equipment depreciation.

Accepted Answer

The answer of DogMart Company records depreciation to Office Equipment...

Question 8

At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. Which of the following statements is true?

Accepted Answer

The answer of At the end of the fiscal year,...

Question 9

Explain the difference between accrual-basis accounting and cash-basis accounting.

Accepted Answer

The answer of Explain the difference between accrual-basis accounting and...

Question 10

When is the adjusted trial balance prepared?

Accepted Answer

The adjusted trial balance is prepared after the adjusting journal entries are posted. This is because the adjusting journal entries are used to update the accounts and ensure that the financial statements are accurate. Once the adjustments have been made, the adjusted balances are transferred to the adjusted trial balance.

Question 11

All of the following statements regarding vertical analysis are true except

Accepted Answer

In a vertical analysis of an income statement, each item is stated as a percent of total revenue or sales, not total expenses.

Question 12

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

Accepted Answer

The answer of The adjusting entry to adjust supplies was...

Question 13

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

Accepted Answer

Depreciation Expense is an expense account that requires adjusting entries at the end of the accounting period. It is unlikely to appear on an unadjusted trial balance but will definitely appear on an adjusted trial balance. The other accounts, Fees Earned, Accounts Receivable, and Unearned Fees are all balance sheet accounts that are likely to appear on both unadjusted and adjusted trial balances.

Question 14

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Accepted Answer

The answer of On January 1, DogMart Company purchased a...

Question 15

The net income reported on the income statement is $85,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $800. Net income, as corrected, is

Accepted Answer

The answer of The net income reported on the income...

Question 16

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

Accepted Answer

The answer of A one-year insurance policy was purchased on...

Question 17

What is the purpose of the adjusted trial balance?

Accepted Answer

The purpose of the adjusted trial balance is to verify the equality of the debit and credit balances after adjusting entries have been made. This ensures that the books are accurate and ready for the preparation of financial statements. While verifying that all adjusting entries have been posted and that no adjusting entry has been omitted are also important aspects of the process, the primary purpose is to check the overall balance of accounts. The net income (loss) is calculated on the income statement and not on the adjusted trial balance.

Question 18

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

Accepted Answer

The omission of the adjusting entry for depreciation on equipment will result in an overstatement of net income for the current year since the expense for depreciation was not recorded. This will result in an overstatement of total assets, specifically the value of the equipment not being depreciated, leading to an incorrect balance sheet. The retained earnings statement will also be misstated since net income was overstated. Total liabilities will not be affected by the omission of the adjusting entry.

Question 19

Protonix Corp. has a payroll of $6,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. The adjusting entry on December 31, 2011 assuming the year ends on Thursday would be

Accepted Answer

The answer of Protonix Corp. has a payroll of $6,000...

Question 20

Depreciation on Office Equipment is $3,300. The adjusting entry on December 31, 2011 would be

Accepted Answer

The answer of Depreciation on Office Equipment is $3,300. The...

Quiz 3: The Adjusting Process

Which of the accounting steps in the accounting process below would be completed last?

A one-year insurance policy was purchased on June 1, 2011 for $1,500. The adjusting entry on December 31, 2011 would be

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue. a) Fees received but not yet earned. b) Fees earned but not yet received. c) Accumulated depreciation. d) Property tax accrual

The Supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies were on hand. Prepare the adjusting entry for supplies.

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts:

DogMart Company records depreciation to Office Equipment and Production Equipment. Depreciation for the period ending December 31 is $1,400 for Office Equipment and $2,650 for Production Equipment. Prepare two entries to record the Office Equipment and Production Equipment depreciation.

At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. Which of the following statements is true?

Explain the difference between accrual-basis accounting and cash-basis accounting.

When is the adjusted trial balance prepared?

All of the following statements regarding vertical analysis are true except

The adjusting entry to adjust supplies was omitted at the end of the year. This would effect the income statement by having

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

The net income reported on the income statement is $85,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $800. Net income, as corrected, is

A one-year insurance policy was purchased on October 1, 2011 for $4,200. The adjusting entry on December 31, 2011 would be

What is the purpose of the adjusted trial balance?

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

Protonix Corp. has a payroll of $6,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. The adjusting entry on December 31, 2011 assuming the year ends on Thursday would be

Depreciation on Office Equipment is $3,300. The adjusting entry on December 31, 2011 would be