ADMS 2500 Study Guide - Deferral, Accounts Payable, Retained Earnings
ADMS 2500 Full Course Notes
Document Summary
Get access
Related Documents
Related Questions
NEED ANSWERS ASAP
Question 23
If a resource has been consumed but a bill hasnot been received at the end of the accountingperiod, then
an expense should be recorded when the bill is received. | ||
an expense should be recorded when the cash is paid out. | ||
an adjusting entry should be made recognizing the expense. | ||
it is optional whether to record the expense before the bill isreceived. |
3 points
Question 24
Prepaid expenses are
paid and recorded in an asset account before they are used orconsumed. | ||
paid and recorded in an asset account after they are used orconsumed. | ||
incurred but not yet paid or recorded. | ||
incurred and already paid or recorded. |
3 points
Question 25
If a business has received cash in advance of services performedand credits a liability account, the adjusting entry needed afterthe services are performed will be
debit Unearned Service Revenue and credit Cash. | ||
debit Unearned Service Revenue and credit Service Revenue. | ||
debit Unearned Service Revenue and credit Prepaid Expense. | ||
debit Unearned Service Revenue and credit AccountsReceivable. |
3 points
Question 26
The preparation of adjusting entries is
straight forward because the accounts that need adjustment willbe out of balance. | ||
often an involved process requiring the skills of aprofessional. | ||
only required for accounts that do not have a normalbalance. | ||
optional when financial statements are prepared. |
3 points
Question 27
On January 1 of the current year, Doolittle Company purchasedfurniture for $7,560. The company expects to use the furniture for3 years. The asset has no salvage value. The book value of thefurniture at December 31of this year is
$0. | ||
$2,520. | ||
$5,040. | ||
$7,560. |
3 points
Question 28
Husker Du Supplies Inc. purchased a 12-month insurance policy onMarch 1 of the current year for $1,800. At March 31, the adjustingjournal entry to record expiration of this asset will include a
debit to Prepaid Insurance and a credit to Cash for $1,800. | ||
debit to Prepaid Insurance and a credit to Insurance Expense for$200. | ||
debit to Insurance Expense and a credit to Prepaid Insurance for$150. | ||
debit to Insurance Expense and a credit to Cash for $150. |
Question 11 pts
Which of the following terms describe the types of adjusting entries?
expenses and revenues |
prepaid expenses and prepaid revenues |
deferrals and accruals |
deferrals and depreciation |
Flag this Question
Question 21 pts
Unearned Revenue is always
an expense |
stockholder’s equity |
an asset |
a liability |
Flag this Question
Question 31 pts
The adjusted trial balance shows
assets, liabilities, and common stock only |
revenues and expenses only |
amounts that may be out of balance |
amounts that are ready for the financial statements |
Flag this Question
Question 41 pts
Which of the following accounts is not closed?
Salaries Expense |
Dividends |
Accumulated Depreciation, Equipment |
Service Revenue |
Flag this Question
Question 51 pts
Given the following adjusted trial balance:
Debit | Credit | |
Cash | $1,562 | |
Accounts receivable | 2,098 | |
Inventory | 3,124 | |
Prepaid rent | 86 | |
Equipment | 300 | |
Accumulated depreciation-equipment | 52 | |
Accounts payable | 82 | |
Unearned service revenue | 122 | |
Common stock | 206 | |
Retained earnings | 6,610 | |
Service revenue | 268 | |
Interest revenue | 56 | |
Salaries and wages expense | 160 | |
Travel expense | 66 | |
Total | $7,396 | $7,396 |
Net income for the year is
$98.00 |
$270.00 |
$325.00 |
$496.00 |
Flag this Question
Question 61 pts
Wolf Pack Services receives $10,000 cash in advance of services performed and credits a liability account. Which of the following adjusting entries will need to be made after the services are performed?
|
|
|
|
Flag this Question
Question 71 pts
Accumulated Depreciation is a(n)
liability account |
stockholder’s equity account |
contra asset account |
asset account |
Flag this Question
Question 81 pts
Kimmel Company’s accountant makes the following entry to record $2,000 of depreciation expense on the company’s equipment on December 31, 2013:
Dr. | Cr. | |
Depreciation Expense | 2,000 | |
Cash | 2,000 |
The effect of this entry is to
adjust the accounts to their proper amounts on December 31, 2013 |
understate total assets on the balance sheet as of December 31, 2013 |
overstate the book value of the depreciable assets at December 31, 2013 |
understate the book value of the depreciable assets as of December 31, 2013 |
Flag this Question
Question 91 pts
The weekly payrool of Wolverine Corporation is $3,000. Employees work five days per week, Monday through Friday. December 31, 2013, the end of the fiscal year, is a Tuesday. Wolverine Corporation will not pay its employees for the full week until Friday, its normal payday. Wolverine Corporation will make which of the following adjusting entries on Tuesday, December 31?
|
|
|
|
Flag this Question
Question 101 pts
Which of the following statements regarding closing entries is true?
Closing entries bring the Retained Earnings account to its correct ending balance. |
Closing entries transfer unearned revenues, expenses, and dividends to retained earnings. |
Closing entries zero out the assets, expenses, and dividends accounts to prepare them for the next accounting period. |
All of these statements are true. |
Question 16
Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?
Debit: Cash $7,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 |
3 points
Question 17
Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?
Accrued revenues have not been earned and unearned revenues havebeen earned. | ||
Accrued revenues have been paid and unearned revenues havenot. | ||
Accrued revenues have not been recorded and unearned revenueshave been recorded. | ||
Accrued revenues have been recorded and unearned revenues havebeen recorded. |
3 points
Question 18
Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:
debit Unearned Service Revenue, $3,000; credit Cash, $3,000. | ||
debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000. | ||
debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500. | ||
debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500. |
3 points
Question 19
Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:
debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300. | ||
debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300. | ||
debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700. | ||
debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700. |
3 points
Question 20
Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:
debit Rent Expense, $13,500; credit Prepaid Rent, $13,500. | ||
debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500. | ||
debit Prepaid Rent, $1,500; credit Rent Expense, $1,500. | ||
debit Rent Expense, $1,500; credit Prepaid Rent, $1,500. |
3 points
Question 21
Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?
$40,000 | ||
$38,500 | ||
$37,700 | ||
$35,000 |
3 points
Question 22
Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?
$13,000 | ||
$12,000 | ||
$9,750 | ||
$9,000 |
3 points
Question 23
Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?
$1.67 | ||
$0.48 | ||
$2.08 | ||
$0.60 |
3 points
Question 24
Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?
5% | ||
10% | ||
20% | ||
40% |
3 points
Question 25
Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?
March 31 | ||
April 6 | ||
April 15 | ||
April 20 |