Quiz Detail

Q1 . If adjusting entries are recorded in the worksheet, there is no need for them to be journalized or posted.

A True

B False

Q2 . Cost of goods sold is equal to:

A Beginning inventory + purchases - ending inventory

B Beginning inventory - purchases - ending inventory

C Beginning inventory + purchases + ending inventory

D Beginning inventory - purchases + ending inventory

Q3 . The principle which dictates that efforts be matched with accomplishments is the:

A Matching principle

B Cost principle

C Periodicity principle

D Revenue recognition principle

E None of the above

Q4 . The net increase in owner's equity that results from business operations is called:

A Net income

B Revenue

C An expense

D An asset

Q5 . A contra asset account is an account that is added to another asset account.

A True

B False

Q6 . In general, the accounts in the income statement are:

A Permanent accounts

B Temporary accounts

C Unearned revenue accounts

D Contra-asset account

Q7 . The minor expense of a merchandiser is the cost of goods sold.

A True

B False

Q8 . Which of the following is/are the purpose of adjusting entries?

A To update the accounts in the books

B To apply the matching principle

C To properly reflect the the correct net income

D To make the equation A=L+OE more accurate

E All of the above

Q9 . Under a perpetual inventory system, there is no need to conduct a physical inventory count.

A True

B False

Q10 . Each of the following is a major type (category) of adjusting entries, except:

A Prepaid expenses

B Accrued revenues

C Accrued expenses

D Earned revenues

E None of the above

Q11 . The Unearned Revenue account is listed in the:

A Statement of Financial Performance

B Statement of Financial Position

C Bank Statement

D Statement of Changes in Equity

E Cash Flow Statement

Q12 . The second adjusting entry for merchandise inventory, when using the periodic inventory system, causes a zero balance in the Merchandise Inventory account.

A True

B False

Q13 . The adjusted trial balance is a list of accounts and their balances at:

A The beginning of the accounting period

B The end of the accounting period

C The end of the accounting period immediately after adjusting entries have been posted

D Any point during the accounting period

E The end of the accounting period immediately before adjusting entries have been posted

Q14 . One of the following statements about the accrual basis of accounting is false. That statement is/are:

A Events that change a company's financial statements are recorded in the period i which the event's occur

B Revenue is recognized in the period in which it is earned

C This is basis is in accord with generally accepted accounting principles (GAAP)

D Revenue is recorded only when cash is received, and expense is recorded only when cash is paid

E A, b and c

Q15 . Purchaser's description of a cash discount received from a supplier of goods.

A Cash discount

B Sales discount

C Purchase discount

D All of the above

E A and b

Q16 . Adjusting entries are made to ensure that:

A Expenses are recognized in the period in which they are incurred

B Revenues are recorded in the period on which they are earned

C Balance sheet and income statement accounts have correct balances at the end of the accounting period

D All of the above

E Only a and b

Q17 . Accrual accounting involves all of the following except:

A Recording all revenues when cash was received

B Applying the matching rule

C Recognizing expense when incurred

D Adjusting the accounts

E All of the above

Q18 . Accounts that are partly income statement accounts and balance sheet accounts are called dual accounts.

A True

B False

Q19 . Under the periodic inventory system entries to the inventory account are made:

A When merchandise is purchased

B At year end

C When merchandise is sold

D When merchandise is returned

Q20 . Adjusting entries are used to:

A Make financial statements from one period to the next more comparable

B Make net income reflect cash flow

C Correct errors in the recording of earlier transactions

D Record initial transactions

E None of the above

Q21 . Adjustments for unearned revenues:

A Decrease liabilities and increase revenues

B Have an assets and revenues account relationship

C Increase assets and increase revenues

D Decrease revenues and decrease assets

E B and d

Q22 . Which of the following is an example of a deferral?

A Apportioning costs between two or more periods

B Recognizing an accrued expense

C Recognizing an unearned revenue

D Recognizing an accrued revenue

E All of the above

Q23 . Assigning revenues to the accounting period in which goods are delivered or services performed and expenses to the accounting period in which they are used to produce revenues are called the

A Accounting period

B Continuity assumption

C Matching rule

D Recognition rule

Q24 . A purchase of office supplies that was recorded in the Office Equipment account would require a correcting entry that:

A Credits Office Supplies

B Credits Cash

C Debits Office Equipment

D Credits Office Equipment

E None of the above

Q25 . When revenues and expenses are equal for the same accounting period, it is called the matching principle and there is neither a loss nor a profit

A True

B False

Q26 . Adjustments for accrued revenues:

A Have a liabilities and revenues account relationship

B Have an assets and revenues account relationship

C Decrease assets and revenues

D Decrease liabilities and increase revenues

E C and d

Q27 . Subscriptions received in advance by a publishing company is called unearned revenue if the subscriptions revenue will be earned in one fiscal period.

A True

B False

Q28 . The time period assumption states that:

A Revenue should be recognized in the accounting period in which it is earned

B Expenses should be matched with revenues

C The economic life of a business can be divided into artificial time periods

D The fiscal year should correspond with the calendar year

E Same definition with accrual accounting

Q29 . Reduction in a receivable or a payable that is granted if it is paid within the discount period.

A Cash discount

B Trade discount

C Discount

D None of the above

E A and b is the same

Q30 . Which of the following is an adjunct account?

A Purchase Returns and Allowances

B Sales Returns and Allowances

C Accumulated Depreciation

D Premium on Bonds

E Purchase Discount

Q31 . What is the purpose of adjusting entry under the Expense Method?

A To record the unused portion of the asset.

B To record the expired portion of the asset

C To record the purchase of the asset

D All of the above

E None of the Above

Q32 . Under the perpetual inventory system, the ending inventory is determined by a physical count and is recorded in the Merchandise Inventory Account.

A True

B False

Q33 . A business can choose a fiscal year that corresponds to:

A The calendar year

B The natural business year

C Any twelve-month period

D Any of the above

E A and C only

Q34 . The second adjusting entry for merchandise inventory under the periodic system, is

A Debit Income Summary and credit Merchandise Inventory

B Debit Merchandise Inventory and credit Income Summary

C Debit Cost of Goods Sold and credit Merchandise Inventory

D Debit Merchandise Inventory and credit Cost of Goods Sold

E None of the above

Q35 . What is the purpose of adjusting entry under the Liability Method?

A To record the earned portion of the revenue received in advance.

B To record the unearned portion of the revenue received in advance.

C To record the receipt of the cash

D All of the above

E None of the above

Q36 . When using the periodic inventory system, the main reason for adjusting the asset account Merchandise Inventory in two steps is

A To record an accurate amount of inventory on the balance sheet

B That both the beginning and ending inventory amounts must appear as separate figures on the income statement.

C To make adjustments for losses due to error, shrinkage or theft

D All of these

E None of these

Q37 . In the adjustments column of the worksheet, the debit to the Merchandise Inventory account represents:

A Beginning inventory

B Ending inventory

C The difference between the beginning and ending inventory

D The total of the beginning and ending inventory

E None of these

Accounts Adjusting Entries Quiz Exam!

Q1 . If adjusting entries are recorded in the worksheet, there is no need for them to be journalized or posted.

Q2 . Cost of goods sold is equal to:

Q3 . The principle which dictates that efforts be matched with accomplishments is the:

Q4 . The net increase in owner's equity that results from business operations is called:

Q5 . A contra asset account is an account that is added to another asset account.

Q6 . In general, the accounts in the income statement are:

Q7 . The minor expense of a merchandiser is the cost of goods sold.

Q8 . Which of the following is/are the purpose of adjusting entries?

Q9 . Under a perpetual inventory system, there is no need to conduct a physical inventory count.

Q10 . Each of the following is a major type (category) of adjusting entries, except:

Q11 . The Unearned Revenue account is listed in the:

Q12 . The second adjusting entry for merchandise inventory, when using the periodic inventory system, causes a zero balance in the Merchandise Inventory account.

Q13 . The adjusted trial balance is a list of accounts and their balances at:

Q14 . One of the following statements about the accrual basis of accounting is false. That statement is/are:

Q15 . Purchaser's description of a cash discount received from a supplier of goods.

Q16 . Adjusting entries are made to ensure that:

Q17 . Accrual accounting involves all of the following except:

Q18 . Accounts that are partly income statement accounts and balance sheet accounts are called dual accounts.

Q19 . Under the periodic inventory system entries to the inventory account are made:

Q20 . Adjusting entries are used to:

Q21 . Adjustments for unearned revenues:

Q22 . Which of the following is an example of a deferral?

Q23 . Assigning revenues to the accounting period in which goods are delivered or services performed and expenses to the accounting period in which they are used to produce revenues are called the

Q24 . A purchase of office supplies that was recorded in the Office Equipment account would require a correcting entry that:

Q25 . When revenues and expenses are equal for the same accounting period, it is called the matching principle and there is neither a loss nor a profit

Q26 . Adjustments for accrued revenues:

Q27 . Subscriptions received in advance by a publishing company is called unearned revenue if the subscriptions revenue will be earned in one fiscal period.

Q28 . The time period assumption states that:

Q29 . Reduction in a receivable or a payable that is granted if it is paid within the discount period.

Q30 . Which of the following is an adjunct account?

Q31 . What is the purpose of adjusting entry under the Expense Method?

Q32 . Under the perpetual inventory system, the ending inventory is determined by a physical count and is recorded in the Merchandise Inventory Account.

Q33 . A business can choose a fiscal year that corresponds to:

Q34 . The second adjusting entry for merchandise inventory under the periodic system, is

Q35 . What is the purpose of adjusting entry under the Liability Method?

Q36 . When using the periodic inventory system, the main reason for adjusting the asset account Merchandise Inventory in two steps is

Q37 . In the adjustments column of the worksheet, the debit to the Merchandise Inventory account represents: