Adjusting the Accounts

What accounting assumption allows the economic life of a business to be divided into artificial time periods like a month, a quarter, or a year?

Under accrual-basis accounting, when are revenues recognized?

What are the two main categories of adjusting entries?

An adjusting entry for a prepaid expense results in:

Pioneer Advertising Inc. purchased supplies costing $2,500 on October 5. An inventory count at the close of business on October 31 reveals that $1,000 of supplies are on hand. What is the correct adjusting entry for supplies on October 31?

On October 4, Pioneer Advertising paid $600 for a one-year fire insurance policy, with coverage beginning on October 1. What is the adjusting entry for insurance at October 31?

Which of the following accounts is a contra asset account?

The process of allocating the cost of an asset to expense over its useful life is known as:

An adjusting entry for an accrued revenue would involve:

Pioneer Advertising signed a three-month, $5,000 note payable at an annual interest rate of 12 percent on October 1. What is the amount of accrued interest to be recorded at October 31?

Failure to prepare an adjusting entry for an accrued expense would cause:

What is the primary purpose of the adjusted trial balance?

The book value of an asset is equal to the:

Every adjusting entry must affect which of the following?

The expense recognition principle is often referred to as the:

If a company uses the alternative treatment for prepaid expenses and initially debits an expense account for a one-year insurance policy, what would the adjusting entry be at year-end?

Which of the following is an example of an unearned revenue?

According to Appendix 3B, which quality of useful information means that information accurately depicts what really happened?

A company initially records a prepaid expense as an asset. If it fails to make an adjusting entry for the portion of the asset that has expired, what is the effect on the financial statements?

Hammond Inc.'s ledger shows a balance in Supplies of $2,800. A physical count at the end of the period reveals that supplies on hand total $800. The adjusting entry would be:

If a company receives cash from a customer before performing the service, which accounts are increased in the initial journal entry?

Which principle requires that accountants 'let the expenses follow the revenues'?

Hammond Inc.'s equipment depreciates $200 a month. Which account is credited in the monthly adjusting entry?

Failure to prepare an adjusting entry for an accrued revenue would cause:

From the Adjusted Trial Balance for Pioneer Advertising Inc. on page 116, what is the total of the debit column?

When are adjusting entries required?

The accounting principle that dictates that a company should 'let the expenses follow the revenues' is the:

Micro Computer Services Inc. borrowed $30,000 from a local bank on August 1, 2019, on a 15-year mortgage with an annual interest rate of 10 percent. What is the adjusting entry for interest at August 31, 2019?

If a company fails to make an adjusting entry to record depreciation expense, what is the impact on the financial statements?

An adjusting entry for an unearned revenue results in:

A fiscal year is an accounting period that is:

If a company fails to make an adjusting entry for accrued interest on a note receivable, what is the result?

From the Adjusted Trial Balance of Pioneer Advertising Inc. (Illustration 3-25, page 116), which of the following accounts will be used to prepare the balance sheet?

Which of these is NOT a reason that a trial balance may not contain up-to-date and complete data before adjustments?

The entry to record accrued salaries at the end of an accounting period includes a:

Which accounting principle is the basis for the practice of 'writing down' inventory to its net realizable value when it is lower than cost?

An adjusting entry to record accrued interest on a note payable would involve which of the following?

On the balance sheet, how is the book value of a piece of equipment presented?

A company has a one-year insurance policy that cost $2,400, purchased on January 1. If the company initially debited Prepaid Insurance for $2,400, what is the balance in the Prepaid Insurance account after the March 31 quarterly adjusting entry is made?

The quality of information that allows users to identify the real-world economic events is known as:

A company performs services for a client but has not yet billed them or recorded the transaction. At the end of the accounting period, what type of adjusting entry is needed?

A company has a beginning balance in Supplies of $500. During the month, it purchases an additional $1,200 of supplies. At the end of the month, a physical count shows $700 of supplies on hand. What is the amount of Supplies Expense for the month?

What type of accounts are prepared for and listed on an adjusted trial balance?

If a company initially credits a revenue account when it receives cash for a future service, what does the adjusting entry involve at the end of the period if some service is still unearned?

Why is cash-basis accounting NOT in accordance with Generally Accepted Accounting Principles (GAAP)?

If an accountant divides the economic life of a business into artificial time periods, they are applying the:

A company has a note payable on which interest of $300 has accrued but has not been paid. The adjusting entry would:

From which of the following is the income statement prepared?

A company purchased a one-year, $12,000 insurance policy on June 1. What is the balance in the Prepaid Insurance account on the December 31 adjusted trial balance?

The principle that states that companies should disclose all circumstances and events that would make a difference to financial statement users is the: