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wiley plus orion acct ch.4 LSU
Terms in this set (26)
Q 4.22: A debit in the Income Summary statement is transferred to retained earnings by--- the retained earnings account.
Q 4.23: Which document is most important to complete before the company's financial statements can be prepared?
c. adjusted trial balance
Q 4.24: Theresa Phillips, CPA, has billed her clients for services performed. She subsequently receives payments from her clients. The entry will include a debit to ________ and credit to
Cash; Accounts Receivable.
Q 4.25: A company purchased office supplies costing $3,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. Which of the following is an adjusting entry that should be made by the company?
debit Supplies Expense $2,100; credit Supplies $2,100
Q 4.26: The closing entry process consists of closing
all temporary accounts.
Q 4.27: Financial statements are prepared by companies
for each accounting period.
Q 4.28: Companies must pay insurance ________.
in advance, often for more than one year.
Q 4.29: At the end of each quarter, accountants should prepare a trial balance, journalize and post adjusting entries, and then do which of the following?
Prepare an adjusted trial balance.
Q 4.30: Which of the following accounts will be closed to a zero balance at the end of the fiscal year?
revenue and expense accounts have a zero ending balance
Q 4.31: On November 15th, 2016, Spring Industries signs a $20,000, 5.5%, nine-month note payable. Journalize the entry to accrue interest on December 31st, 2016.
Interest Expense $137.50
Interest Payable $137.50
Q 4.32: Fly High Pilot Training Academy owns several planes used for instruction to new pilots. It follows accrual basis accounting. When it acquires a new plane it will record it as a(n)
asset and estimate its contribution to future operations on an annual basis.
Q 4.33: A company that uses accrual-basis accounting purchased equipment on July 1 of the current year for $20,000. The company expects to use the equipment consistently for four years, and will record ________ depreciation in its December 31 financial statements.
Q 4.34: After an accountant has journalized business transactions, the next step in the accounting cycle is to perform which of the following?
post to ledger accounts
(1) analyze business transactions, (2) journalize the transactions, (3) post to ledger accounts, (4) prepare a trial balance, (5 journalize and post adjusting entries, (6 prepare an adjusted trial balance, (7)prepare financial statements, (8) journalize and post closing entries, and (9) prepare a post-closing trial balance.
steps in the accounting cycle are:
Q 4.35: On July 1, The Knit Shop paid $9,000 to Townsend Realty for 6 months' rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry is
debit Rent Expense, $1,500; credit Prepaid Rent, $1,500.
Q 4.36: McGinnis Construction is a cash-basis company with a fiscal year-end of June 30. McGinnis' employees earn a normal weekly wage of $12,500 during a five-day work week. June 30 falls on a Thursday for the current year. McGinnis also performed services of $40,900 during the last four days of June, but they are not paid in full until July 8. As a result of operations, there will be an ________ of McGinnis' net income for the most recent fiscal year of ________.
Q 4.37: Every winter, Bonnie's Boutique hires 10 seasonal employees to work from November 15 through January 15. The workers are paid 25% of their total salary in November, 50% of their total salary in December, and the remaining 25% of their total salary in January. Bonnie's Boutique recognizes all salary expenses related to these workers at the end of January. In this scenario, Bonnie's has
violated the matching principle because this principle requires the firm to recognize 25% of the total salary expense in November, 50% in December, and 25% in January.
A new bookkeeper at TLC Pet Clinic posts transactions to ledger accounts and then journalizes and posts adjusting entries. What step of the accounting cycle did she overlook?
preparation of a trial balance
GoCarts Systems pays $3,500 cash for next year's publication subscription which is known as a(n) _________. During the same week it delivers carts to a theme park and sends the customer a $15,000 invoice which is known as a(n) ___________.
Q 4.40: At December 31, 2017, before any year-end adjustments, Janus Company's Prepaid Insurance account had a balance of $2,800. It was determined that $1,200 of the Prepaid Insurance had expired. Which of the following is the correct adjusted balance for Prepaid Insurance at December 31, 2017?
Q 4.41: Meadows Manufacturing has a March 15th year-end date. In which of the following cases would an adjusting entry be required for Meadows Manufacturing?
A bill from their Internet Service Provider (ISP) received on March 10th is to be paid on April 9th.
Q 4.42: An adjusting entry recording accrued salaries for a period indicates that Salaries and Wages Expense has been incurred but has not yet been paid or recorded.
Q 4.43: How many steps in the accounting cycle involve preparing some kind of trial balance?
Q 4.44: Mahogany Inc. is a consulting firm. It reports its results on a cash-basis with a fiscal year ending June 30th. Mahogany performed services for customers from June 23rd to June 30th, 2016, amounting to $6,000. The customers paid Mahogany in full on July 12th. The cash-basis is not in accordance with ________, and Mahogany is in violation of the _______.
GAAP, revenue recognition principle
Q 4.45: Henna Hair Salon purchased supplies for $6,000 and debited Supplies for the full amount. At the end of the accounting period, $1,800 worth of supplies were still on hand. Identify the adjusting entry needed at the end of the period.
debit Supplies Expense $4,200; credit Supplies $4,200
The sequence of financial statements is:
income statement, statement of retained earnings, balance sheet and statement of cash flows.
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