Question 1

The revenue recognition criteria states that revenue of a business is recognized

Accepted Answer

A)   when cash is received.
B)   when it is earned.
C)   at the end of the year.
D)   in the period that the expenses to earn that revenue are incurred.E) B) and C)
F) C) and D)

Question 2

An adjusting entry always involves two balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 3

An adjusting entry

Accepted Answer

A)   affects two balance sheet accounts.
B)   affects two income statement accounts.
C)   affects a balance sheet account and an income statement account.
D)   is always a compound entry.E) A) and B)
F) All of the above

Question 4

The Kookie Kutter Bakery purchased $6,500 worth of baking supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the baking supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is

Accepted Answer

A)   debit Baking Supplies Expense, $3,000; credit Baking Supplies, $3,000.
B)   debit Baking Supplies Expense, $3,500; credit Baking Supplies, $3,000.
C)   debit Baking Supplies, $3,500; credit Baking Supplies Expense, $3,500.
D)   debit Baking Supplies Expense, $3,500; credit Baking Supplies, $3,500.E) All of the above
F) None of the above

Question 5

Adjusting journal entries are only necessary when year-end financial statements are prepared.

Accepted Answer

A) True 
 B)False

Question 6

Stevenson Company purchased a plot of land for $100,000 on January 1. It plans to hold the land for 7 years and then sell it. What is the amount of annual depreciation to be recorded?

Accepted Answer

A)   $14,286
B)   $0
C)   $1,190
D)   $10,000E) A) and B)
F) A) and C)

Question 7

An adjusting entry will credit a liability to increase the liability.

Accepted Answer

A) True 
 B)False

Question 8

An accounting time period that is one year in length, which could, but does not need to begin on January 1, is referred to as

Accepted Answer

A)   a fiscal year.
B)   an interim period.
C)   final reporting period.
D)   a reporting period.E) A) and B)
F) A) and C)

Question 9

Land is not a depreciable asset because

Accepted Answer

A)   the future value of land cannot be determined.
B)   land has an unlimited useful life.
C)   land may deteriorate in the future.
D)   land is classified as a current asset.E) B) and C)
F) None of the above

Exam 3: Adjusting the Accounts

An adjusting entry will credit a liability to increase the liability.

Correct Answer
verified

Adjusting journal entries are only necessary when year-end financial statements are prepared.

Correct Answer
verified

The Kookie Kutter Bakery purchased $6,500 worth of baking supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the baking supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is

Correct Answer
verified

Land is not a depreciable asset because

Correct Answer
verified

An adjusting entry always involves two balance sheet accounts.

Correct Answer
verified

An adjusting entry

Correct Answer
verified

Stevenson Company purchased a plot of land for $100,000 on January 1. It plans to hold the land for 7 years and then sell it. What is the amount of annual depreciation to be recorded?

Correct Answer
verified

An accounting time period that is one year in length, which could, but does not need to begin on January 1, is referred to as

Correct Answer
verified

The revenue recognition criteria states that revenue of a business is recognized

Correct Answer
verified

Exam 3: Adjusting the Accounts

An adjusting entry will credit a liability to increase the liability.

Correct AnswerverifiedShow Answer

Adjusting journal entries are only necessary when year-end financial statements are prepared.

Correct AnswerverifiedShow Answer

The Kookie Kutter Bakery purchased $6,500 worth of baking supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the baking supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is

Correct AnswerverifiedShow Answer

Land is not a depreciable asset because

Correct AnswerverifiedShow Answer

An adjusting entry always involves two balance sheet accounts.

Correct AnswerverifiedShow Answer

An adjusting entry

Correct AnswerverifiedShow Answer

Stevenson Company purchased a plot of land for $100,000 on January 1. It plans to hold the land for 7 years and then sell it. What is the amount of annual depreciation to be recorded?

Correct AnswerverifiedShow Answer

An accounting time period that is one year in length, which could, but does not need to begin on January 1, is referred to as

Correct AnswerverifiedShow Answer

The revenue recognition criteria states that revenue of a business is recognized

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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