1) If an adjustment is needed for Unearned Revenues , The:

A) Liabilities are overstated and revenues are understated before adjustment

B) Assets are understated and revenue are overstated before adjustment
C) Liabilities and revenue are understated before adjustment
D) Liabilities and revenues are overstated before adjustment

2) Emad Company received a check for 24,000$ on July 1 which represents a 6 month advance
payment of rent on building it rents to a client, Unearned rent revenue was credited for the
full 24,000$, Financial statements will be prepared On September 30, Emad Company should
make the following adjusting entry on September 30:
A) Dr. Unearned rent revenue 12,000$ & Cr. Rent revenue 12,000$
B) Dr. Unearned Rent Revenue 4,000$ & Cr. Rent Revenue 4,000$
C) Dr. Rent Revenue 4,000$ & Cr. Unearned Rent Revenue 4,000$
D) Dr. Cash 24,000$ & Cr. Rent Revenue 24,000$

3) Raghad Company purchased office supplies costing 16,000$, and debited supplies for the full
amount, at the end of the accounting period, a physical count of supplies revealed 4,400$ still
on hand, The Adjusting Journal entry to be made at the end of the period would be:
A) Dr. Supplies 11,600$ & Cr. Supplies Expense 11,600$
B) Dr. Supplies Expense 11,600$ & Cr. Supplies 11,600$
C) Dr. Supplies Expense 4,400$ & Cr. Supplies 4,400$
D) Dr. Supplies 4,400$ & Cr. Supplies Expense 4,400$

4) If Fatoom Company had balance of supplies account for 30,000$, On June 2 , Fatoom Company
purchased 20,000$ Of Supplies and debited for the full amount, On December 31, There is only
12,000 supplies on hand, the amount that should be wrote on the adjusting entry is:
A) 30,000$
B) 12,000$
C) 50,000$
D) 38,000$
5) If An Adjustment is needed for prepaid expenses, The:
A) Assets and related expenses are understated before adjustment
B) Assets is overstated and Expenses is understated before adjustment
C) Assets and expenses are overstated before adjustment
D) Assets Understated and expenses are overstated before adjustment

6) On June 1, 2022, Raghad Company Purchased equipment for 80,000$, Raghad Company Is
depreciating the equipment at the rate of 1,900$ per month, the book value of the equipment
at December 31, 2022 is:
A) 1,900$
B) 13,300$
C) 80,000$
D) 66,700$

7) The balance in the prepaid rent account before adjustment at the end of the year is 7,500$,
Which represents three month's rent paid on December 1, the adjusting entry required on
December 31 is to:
A) Dr. Prepaid Rent 2,500$ & Cr. Rent Expense 2,500$
B) Dr. Prepaid Rent 5,000$ & Cr. Rent Expense 5,000$
C) Dr. Rent Expense 5,000$ & Cr. Prepaid Rent 5,000$
D) Dr. Rent Expense 2,500$ & Cr. Prepaid Rent 2,500$

8) LR Inc, purchased a 12-Month insurance policy on July 1, 2022 for 9,000$, At July 31, 2022,
the adjusting journal entry to record expiration of this asset will include a:
A) Dr. Prepaid Insurance & Cr. Insurance expense for 750$
B) Dr. Insurance Expense & Cr. Cash for 750$
C) Dr. Prepaid Insurance & Cr. Cash for 9,000$
D) Dr. Insurance Expense & Cr. Prepaid insurance for 750$

9) Expenses paid in cash and recorded as assets before they are used are called:

A) Prepaid Expenses
B) Accrued Expenses
C) Unearned Revenues
D) Accrued Revenues
10) Uniflix Company had 6,000$ Supplies, During the month the company purchased 4,000$
supplies, an physical inventory shows that supplies on hand is 2,000$, the amount that will be
recorded on the adjusting entry is:
A) 4,000$
B) 8,000$
C) 10,000$
D) 2,000$

11) Prepaid expenses have

A) Assets - Liabilities Relationship
B) Assets - Expenses Relationship
C) Assets - Revenues Relationship
D) Assets - Assets Relationship

12) Chelsea Shop follows the revenue recognition principle. Chelsea services a car on May 31.
The customer picks up the vehicle on August 1, and mails the payment to Chelsea on August 5.
Chelsea receives the check in the mail on August 6. When should Chelsea show that the
revenue was earned?
A) Aug 1
B) May 31
C) Aug 5
D) June 1

13) Osama Company purchased a 12-month insurance policy on May 1 ,2023 for 15,000, At
May 31, 2023, The Adjusting Entry is needed to record the expiration of this asset will include:
A) Dr. Insurance Expense 1,250$ & Cr. Cash 1,250$
B) Dr. Insurance Expense & Cr. Prepaid Insurance 1,250$
C) Dr. Prepaid Insurance & Cr. Insurance Expense 1,250$
D) Dr. Insurance Expense & Cr. Prepaid Insurance 15,000$

14) If Ibrahim Co. purchased Equipment on July 1, 2022 for $33,000. The company is expected
to use the equipment for 3 years. It has residual value of 3,000$ , What is amount of
equipment depreciation at December 31, 2022
A) 5,000$
B) 30,000$
C) 10,000$
D) 10,500$
15) On January 31 , 2022, Matrix company purchased equipment for 25,000$, The company is
depreciating the equipment at the rate of 500 per month, At March 31, 2022, the amount of
depreciation expense is
A) 1,500$
B) 2,000$
C) 25,000$
D) 1,000$

16) On December 31, before any year-end adjusting entries are made, Uniflix Company's
Insurance Expense account had a balance of £7,000 and its Prepaid Insurance account had a
balance of £6,900. It was determined that £3,500 of insurance had expired by year end. How
much is the adjusted balance for Insurance Expense for the year?
A) 10,000$
B) 10,500$
C) 3,500$
D) 7,000$

17) The Balance in the prepaid rent account before adjustment at the end of the year is
30,000$, Which represent three months’ rent paid on December 1, The adjusting entry
required on December 31 is to:
A) Dr. Rent Expense 20,000$ & Cr. Prepaid Rent 20,000$
B) Dr. Prepaid Rent 20,000$ & Cr. Rent Expense 20,000$
C) Dr. Rent Expense 10,000$ & Cr. Prepaid Rent 10,000$
D) Dr. Prepaid Rent 10,000$ & Cr. Rent Expense 10,000$

18) If the adjusting entry for using supplies is not made:

A) Expenses will be understated
B) Assets will be understated
C) Equity will be understated
D) Net income will be understated

19) Adjusting entries are required quarterly

A) True
B) False
20) Raghad company purchased office supplies costing 4,000$ and debited supplies for the full
amount, At the end of the accounting period, a physical count of supplies revealed 1,100$ still
on hand, the appropriate adjusting journal entry to be made at the end of the period would be:

A) Dr. Supplies Expense 2,900 & Cr. Supplies 2,900$

B) Dr. Supplies 2,900$ & Cr. Supplies Expense 2,900$
C) Dr. Supplies Expense 4,000$ & Cr. Supplies 4,000$
D) Dr. Supplies Expense 1,100$ & Cr. Supplies 1,100$

21) The adjustment is needed for prepaid expenses as the asset is understated and the related
expense is overstated before adjustment
A) True
B) False

22) Adjusting entries are not required quarterly

A) True
B) False

23) Adjustments for prepaid expenses:

A) Have assets & revenues account relationship
B) Have liabilities & revenues account relationship
C) Decrease assets & increase expenses
C) Decrease liabilities & increase revenues

24) The adjustment is needed for prepaid expenses as the asset is overstated and the related
expense is understated before adjustment
A) True
B) False

25) If an adjustment is needed for Unearned Revenues , The:

A) Liabilities are overstated and revenues are understated before adjustment
B) Assets are understated and revenue are overstated before adjustment
C) Liabilities and revenue are understated before adjustment
D) Liabilities and revenues are overstated before adjustment
26) Rahma Company received a check for 24,000$ on July 1 which represents a 6 month
advance payment of rent on building it rents to a client, Unearned rent revenue was credited
for the full 24,000$, Financial statements will be prepared On September 30, Rahma Company
should make the following adjusting entry on September 30:

A) Dr. Unearned rent revenue 12,000$ & Cr. Rent revenue 12,000$
B) Dr. Unearned Rent Revenue 4,000$ & Cr. Rent Revenue 4,000$
C) Dr. Rent Revenue 4,000$ & Cr. Unearned Rent Revenue 4,000$
D) Dr. Cash 24,000$ & Cr. Rent Revenue 24,000$

27) Farah Company received a check for 24,000$ on July 1, which represents a 6 month
advance payment of rent on a building it rent to a client, Unearned Rent revenue was credited
for the full 24,000$, Financial statements will be prepared on September 30, Farah company
should make the following adjusting entry on September 30
A) Dr. Unearned Rent Revenue 12,000$ & Cr. Rent Revenue 12,000$
B) Dr. Unearned Rent Revenue 4,000$ & Cr. Rent Revenue 4,000$
C) Dr. Rent Revenue 4,000$ & Cr. Unearned Rent revenue 4,000$
D) Dr. Cash 24,000$ & Cr. Rent Revenue 24,000$

28) Raghad Company received a check for 24,000$ on July 1 , Which represents a 6 month
advance payment of rent on a building it rents to a client, Unearned Rent Revenue was
credited for the full 24,000$. Financial statements will be prepaid on August 30, Raghad
Company should make the following adjusting entry on August 30
A) Dr. Unearned Rent Revenue 24,000$ & Cr. Rent Revenue 24,000$
B) Dr. Unearned Rent Revenue 8,000$ & Cr. Rent Revenue 8,000$
C) Dr. Unearned Rent Revenue 4,000$ & Cr. Rent Revenue 4,000$
D) Dr. Rent Revenue 4,000$ & Cr. Unearned Rent Revenue 4,000$

29) On June 1, 2022, Osama Company Purchased equipment for 60,000$, Osama company Is
depreciating the equipment at the rate of 1,400$ per month, the book value of the equipment
at November 30, 2022 is:
A) 8,400$
B) 11,200$
C) 50,200$
D) 51,600$
30) On May 31 , 2022, Bisan company purchased equipment for 23,000$, The company is
depreciating the equipment at the rate of 300 per month, At July 31, 2022, the amount of
depreciation expense is
A) 900$
B) 22,700$
C) 300$
D) 600$

31) On January 1, 2023, Uniflix Company paid a 6,900$ for a one year disaster insurance policy
that will expire next year, if the company prepared the financial statements on December 31,
2023, The adjusting entry is:
A) Debit Prepaid insurance 6,900$ and Credit Insurance expense 6,900$
B) Debit Insurance Expense 575$ and Credit Prepaid Insurance 575$
C) Debit Insurance Expense 6,900$ and Credit Prepaid Insurance 6,900$
D) Debit Insurance Expense 6,900$ and Credit Prepaid Insurance 6,900$

32) A firm pays weekly salaries of 50,000$ on Thursday for a five-day week ending on
Thursday, The adjusting entry necessary at the end of the fiscal period ending on a Tuesday is:

A) Debit Salaries expense 30,000$, Credit Salaries Payable 30,000$

B) Debit Salaries expense 30,000$, Credit Cash 30,000$
C) Debit Salaries expense 20,000$, Credit Salaries Payable 20,000
D) Debit Salaries expense 50,000$, Credit Salaries Payable 50,000
33) An Adjusting entry affects:
A) Two Income statement accounts
B) Two Statement of financial position accounts
C) One statement of financial position account & one income statement account
D) None of the above

34) When Companies record transactions in the period in which the events occur, _____________
is being applied

A) Accrual basis accounting

B) Time period Assumption
C) Expense recognition principle
D) None of the above
35) Unearned Revenue have
A) Expenses - Liabilities Relationship
B) Liabilities – Revenues Relationship
C) Assets - Revenues Relationship
D) Assets - Expenses Relationship

36) Accrued Revenues have

A) Expenses - Liabilities Relationship
B) Liabilities – Revenues Relationship
C) Assets - Revenues Relationship
D) Assets - Expenses Relationship

37) Accrued Expenses have

A) Expenses - Liabilities Relationship
B) Liabilities – Revenues Relationship
C) Assets - Revenues Relationship
D) Liabilities- Expenses Relationship

38) Accrued Expenses have

A) Expenses - Liabilities Relationship
B) Liabilities – Revenues Relationship
C) Assets - Revenues Relationship
D) Liabilities- Expenses Relationship

39) Accumulated Depreciation is

A) Assets Account
B) Contra Revenue Account
C) Contra Asset Account
D) None of the above

40) Hamza Borini Company had the following transactions during 2022, Sales of 6,000 On
Account, Collected 4,000 For Services to be performed on 2023, Paid 2,900 cash in salaries for
employees, Purchased airline tickets for 500$ in December for a trip to take place in 2023,
What is Hamza Borini Company 2022 Net Income using Cash Basis Accounting?
A) 700$
B) 600$
C) 6,600$
D) 6,000$
41) Osama Company had the following transactions during 2020, Sales of 5,000 On Account,
Collected 2,000 For Services to be performed on 2021, Paid 4,000 cash in salaries for
employees, Purchased airline tickets for 900$ in December for a trip to take place in 2021,
What is Osama Company 2020 Net Income using Accrual Basis Accounting?
A) 2,100$
B) 1,300$
C) 1,000$
D) 4,100$

42) On Dec 1, 2022 Uniflix company received in advance 7,000$ cash for services to be
completed at February 29, 2023. If only (25%) of unearned service revenues are recognized on
December 31, 2022, the proper adjusting entry will be:
A) Dr. Unearned Service Revenue & Cr. Service Revenue 7,000$
B) Dr. Unearned Service Revenue & Cr. Service Revenue 1,570$
C) Dr. Unearned Service Revenue & Cr. Service Revenue 1,750$
D) Dr. Service Revenue & Cr. Unearned Service Revenue 1,750$

43) On Dec 1, 2022 Uniflix company received in advance 7,000$ cash for services to be
completed at February 29, 2023. If only one-half (50%) of unearned service revenues are
recognized on December 31, 2022 , the proper adjusting entry will be:
A) Dr. Unearned Service Revenue & Cr. Service Revenue 7,000$
B) Dr. Unearned Service Revenue & Cr. Service Revenue 2,333$
C) Dr. Unearned Service Revenue & Cr. Service Revenue 3,500$
D) Dr. Service Revenue & Cr. Unearned Service Revenue 3,500$

44) Khdour , an employee of Uniflix Company, he will not receive his paycheck until April 2.
Based on services performed from March 16 to March 31, his salary is 900$ per pay period. The
adjusting entry for Uniflix Company on March 31 includes a:
A) Dr. Salaries Payable 900$
B) Cr. Unearned Salaries 900$
C) Dr. Salaries Expense 900$
D) Dr. Salaries Expense 450$
45) Ib sena Company signed a four-month note payable for €18,000 on September 1. The note
requires interest at an annual rate of 12%. How much interest will be accrued on the note as of
the end of September?
A) 180$
B) 540$
C) 720$
D) 2,160$

46) Emad Has performed 500$ of accounting services for a client but has not billed the client as
of the end of the accounting period, the adjusting entry Emad must make:
A) Dr. Cash & Cr. Unearned Service Revenue
B) Dr. Accounts Receivable & Cr. Unearned Service Revenue
C) Dr. Accounts Receivable & Cr. Service Revenue
D) Dr. Unearned Service Revenue & Cr. Service Revenue

47) Jordan Music store borrowed 75,000$ from the bank signing a 10%, 3-month note on
September 1, Principal and interest are payable to the bank on December 1, If the company
prepared monthly financial statements, the adjusting entry that the company should make for
interest on September 30 Would be:
A) Dr. Interest Expense 625$, Cr. Interest Payable 625$
B) Dr. Interest Expense 7,500$ , Cr. Interest Payable 7,500$
C) Dr. Cash 625$ , Cr. Interest Payable 625$
D) Dr. Notes Payable 7,500$ , Cr. Cash 7,500$

48) Oppa Music store borrowed 20,000$ from the bank signing a 12%, 3-month note on
September 1, Principal and interest are payable to the bank on December 1, If the company
prepared monthly financial statements, the adjusting entry that the company should make for
interest on September 30 Would be:
A) Dr. Interest Expense 200$, Cr. Interest Payable 200$
B) Dr. Interest Expense 2,000$ , Cr. Interest Payable 2,000$
C) Dr. Cash 2,400$ , Cr. Interest Payable 2,400$
D) Dr. Notes Payable 200$ , Cr. Cash 200$
49) If an adjustment is needed for Accrued Revenues, The:
A) Liabilities are overstated and revenues are understated before adjustment
B) Assets are understated and revenue are understated before adjustment
C) Assets and revenue are Overstated before adjustment
D) Net Income and revenues are overstated before adjustment

50) If an adjustment is needed for Accrued Expenses, The:

A) Liabilities are understated and Expenses are understated before adjustment
B) Liabilities are understated and Expense are overstated before adjustment
C) Liabilities and revenue are overstated before adjustment
D) Net Income and Equity are understated before adjustment

51) If an adjustment is needed for accrued revenues, Asset and Revenues are understated
before adjustment
A) True
B) False
C)
52) If An adjustment is needed for accrued expenses, Liabilities is understated and Expenses is
overstated before adjustment
A) True
B) False

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