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Exam 3: Accrual Accounting Income

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Question 91

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Which account is debited in the adjusting entry to record salaries owed to employees, but not paid until next accounting period?

A) Salaries Expense
B) Unearned Salaries
C) Salaries Payable
D) Deferred Salaries

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Question 92

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Certain accounts do not need to be adjusted at the end of the period, since the day-to-day transactions provide all the data for these accounts.

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Question 93

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Factory Supplies had a balance of $14,873 on January 1, 2012. During 2012, supplies were purchased on July 15 for $7,510 and on October 9, for $3,679. Requisition sheets completed during the year indicated that $9,458 of supplies had been used by the workers during the year. Determine the ending balance in the Factory Supplies account.

All of the following accounts will be closed except for:

Which of the following is correct regarding transactions and their effect on ratios?

The Prepaid Rent account has a $20,000 debit balance in the unadjusted trial balance. There is a $1,000 credit adjustment to Prepaid Rent. The adjusted trial balance will show Prepaid Rent as a:

Complete the following chart summarizing adjusting entries. The first category of adjusting entries has been completed for you.

Indicate if the following transactions adjust a Prepaid Expense (PE), an Accrued Expense (AE), an Unearned Revenue (UR), or an Accrued Revenue (AR): _____ 1. Paid the yearly insurance policy. _____ 2. Received payment for a yearly magazine subscription. _____ 3. Services provided by an accountant that have not yet been billed or recorded. _____ 4. Received the telephone bill which will be paid next month. _____ 5. Received payment for computer consulting services which will be performed next year

The ABC Company has the following adjusted trial balance as of December 31, 2012: Prepare the Closing Entries for The ABC Company.

Which of the following accounts are considered permanent accounts?

A defect of cash-basis accounting is:

Sam's Fancy Foods has the following Trial Balance as of March 31, 2012. Determine the current ratio.

On October 1 of the current year, a company received $4,800 for services to be performed evenly over the next four months. If no adjusting entry was made on December 31 of the current year:

Accounts Receivable and Common Stock are accounts that need to be adjusted at the end of the period.

Adjusting entries:

Prepaid expenses will:

The adjusting entry to recognize unpaid salaries increases net income and increases liabilities.

GAAP requires the use of cash-basis accounting.

The matching principle matches cash receipts and cash disbursements.

HG Enterprises paid $105,000 for office furniture. The furniture is depreciated using the straight-line method and has an estimated service life of 7 years. After three years of use, the book value of the furniture will be: