Scribd Logo
Upload

Welcome to Scribd!

  • 260 views

    More Practice For The Final Exam - Adjusting Entries - Key

    Uploaded by

    leyuuhh
    This document provides multiple choice practice questions and answers for an exam on adjusting entries. It includes 15 questions testing understanding of key accounting concepts like accruals, closing entries, prepaid expenses, and adjusting journal entries. The rationale is provided for selected questions to explain the accounting treatment.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd

    More Practice For The Final Exam - Adjusting Entries - Key

    Uploaded by

    leyuuhh
    260 views3 pages
    This document provides multiple choice practice questions and answers for an exam on adjusting entries. It includes 15 questions testing understanding of key accounting concepts like accruals, closing entries, prepaid expenses, and adjusting journal entries. The rationale is provided for selected questions to explain the accounting treatment.

    Original Description:

    g

    Original Title

    More Practice for the Final Exam-- Adjusting Entries--Key

    Copyright

    © © All Rights Reserved

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document provides multiple choice practice questions and answers for an exam on adjusting entries. It includes 15 questions testing understanding of key accounting concepts like accruals, closing entries, prepaid expenses, and adjusting journal entries. The rationale is provided for selected questions to explain the accounting treatment.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    260 views3 pages

    More Practice For The Final Exam - Adjusting Entries - Key

    Uploaded by

    leyuuhh
    This document provides multiple choice practice questions and answers for an exam on adjusting entries. It includes 15 questions testing understanding of key accounting concepts like accruals, closing entries, prepaid expenses, and adjusting journal entries. The rationale is provided for selected questions to explain the accounting treatment.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 3
    At a glance
    Powered by AI
    The key takeaways from the passages are adjusting entries, closing entries, accruals, and how to account for unearned and prepaid revenues and expenses.

    The purpose of closing entries is to transfer balances in temporary accounts to a permanent account.

    An example of an adjusting entry that would not be used is cash to unearned revenue.

    More Practice for the Final Exam Adjusting Entries

    Key
    _____ 1. Accruals occur when cash flows:
    A) Occur before expense recognition.
    B) Occur after revenue or expense recognition.
    C) Are uncertain.
    D) Ma be substitute! for goo!s or services.
    Answer: B
    _____ ". An exa#ple of a contra account is:
    A) Depreciation expense.
    B) Accounts receivable.
    C) $ales revenue.
    D) Accu#ulate! !epreciation.
    Answer: D
    _____ %. &he purpose of closing entries is to transfer:
    A) Accounts receivable to retaine! earnings when an account is full pai!.
    B) Balances in te#porar accounts to a per#anent account.
    C) 'nventor to cost of goo!s sol! when #erchan!ise is sol!.
    D) Assets an! liabilities when operations are !iscontinue!.
    Answer: B

    _____ (. )hich of the following woul! not be use! as an a!*usting entr+
    A) ,repai! -ent
    -ent expense
    B) Cash
    .nearne! revenue
    C) 'nterest expense
    'nterest paable
    D) Ba! !ebt expense
    Allowance for !oubtful accounts
    Answer: B
    _____ /. &he a!*usting entr re0uire! when a#ounts previousl recor!e! as unearne!
    revenues are earne! inclu!es:
    A) A !ebit to a liabilit.
    B) A !ebit to an asset.
    C) A cre!it to a liabilit.
    D) A cre!it to an asset.
    Answer: A
    _____ 1. Blan! 2oo!s purchase! a two3ear fire an! exten!e! coverage insurance polic
    on August 14 "55%4 an! charge! the 6(4"55 pre#iu# to 'nsurance expense.
    At its Dece#ber %14 "55%4 ear3en!4 Blan! 2oo!s woul! recor! which of
    the following a!*usting entries+
    A) 'nsurance expense 78/
    ,repai! insurance 78/
    B) ,repai! insurance 78/
    'nsurance expense 78/
    C) 'nsurance expense 78/
    ,repai! insurance %4%"/
    'nsurance paable (4"55
    D) ,repai! insurance %4%"/
    'nsurance expense %4%"/
    Answer: D
    -ationale:
    9ntr on 7:1: 'nsurance expense (4"55
    Cash (4"55
    .nuse! at 1":%1: 6(4"55 x 1;:"( < 6%4%"/
    _____ 8. &he e#ploees of =eat Clothes wor> Mon!a through 2ri!a. 9ver other
    2ri!a the co#pan issues paroll chec>s totaling 6%"4555. &he current
    pa perio! en!s on 2ri!a4 ?ul %. =eat Clothes is now preparing 0uarterl
    financial state#ents for the three #onths en!e! ?une %5. )hat is the
    a!*usting entr to recor! accrue! salaries at the en! of ?une+
    A) $alaries expense ""4(55
    ,repai! salaries ;4155
    $alaries paable %"4555
    B) $alaries expense 14(55
    $alaries paable 14(55
    C) ,repai! salaries ;4155
    $alaries paable ;4155
    D) $alaries expense ""4(55
    $alaries paable ""4(55
    Answer: D
    -ationale: A#ount accrue!: 6%"4555 x 8:15 < 6""4(55
    _____ 7. On $epte#ber 14 "55%4 &i#e Maga@ine sol! 155 one3ear subscriptions
    for 671 each. &he total a#ount receive! was cre!ite! to .nearne!
    subscriptions revenue. )hat woul! be the re0uire! a!*usting entr at
    Dece#ber %14 "55%+
    A) .nearne! subscriptions revenue (74155
    $ubscriptions revenue 114"55
    ,repai! subscriptions %"4(55
    B) .nearne! subscriptions revenue 114"55
    $ubscriptions revenue 114"55
    C) .nearne! subscriptions revenue 114"55
    $ubscriptions paable 114"55
    D) .nearne! subscriptions revenue %"4(55
    $ubscriptions revenue %"4(55
    Answer: B
    -ationale:
    9ntr on ;:1: Cash (74155
    .nearne! subscriptions revenue (74155
    A#ount earne!: 6(74155 x (:1" < 6114"55
    _____ ;. On Dece#ber %14 "55"4 &pical 2ashions ha! balances in its Accounts
    receivable an! Allowance for uncollectible accounts of 6(74(55 an! 6;(54
    respectivel. During "55%4 &pical 2ashions wrote off 67"5 in Accounts
    receivable an! !eter#ine! that there shoul! be an Allowance for
    uncollectible accounts of 6141(5 at Dece#ber %14 "55%. Ba! !ebt expense
    for "55% woul! be:
    A) 6 %"5.
    B) 6141(5.
    C) 6 7"5.
    D) 6145"5.
    Answer: D
    -ationale: Allowance for .ncollectibles
    ;(5 1":%1:5" Bal.
    )rite3Offs 7"5 + recor! BD
    9xp. 141(5 1":%1:5% Bal.
    Ba! !ebt expense < 6141(5 A 7"5 3 ;(5 < 6145"5
    _____ 15. 2in> 'nsurance collecte! pre#iu#s of 61745554555 fro# its custo#ers !uring
    the current ear. &he a!*uste! balance in the .nearne! pre#iu#s account
    increase! fro# 61 #illion to 67 #illion !ollars !uring the ear. )hat was
    2in>Bs revenues fro# earne! insurance pre#iu#s for the current ear+
    A) 61545554555.
    B) 61145554555.
    C) 61745554555.
    D) 6"545554555.
    Answer: B
    -ationale:
    Cash collections 61745554555
    De!uct increase in unearne! pre#iu#s "45554555
    ,re#iu#s earne! 61145554555

    You might also like