Description
131. An error is indicated if the following account has a balance appearing on the post-closing trial balance:
A. Office Equipment
B. Accumulated Depreciation-Office Equipment
C. Depreciation Expense-Office Equipment
D. Common Stock
E. Salaries Payable
132. A post-closing trial balance includes:
A. All ledger accounts with balances, none of which can be temporary accounts.
B. All ledger accounts with balances, none of which can be permanent accounts.
C. All ledger accounts with balances, which include some temporary and some permanent accounts.
D. Only revenue and expense accounts.
E. Only asset accounts.
133. Which of the following statements is true?
A. Retained earnings must be closed each accounting period.
B. A post-closing trial balance should include only permanent accounts.
C. Information on the work sheet can be used in place of preparing financial statements.
D. By using a work sheet to prepare adjusting entries, you need not post these entries to the ledger accounts
E. Closing entries are only necessary if errors have been made.
134. Under the alternative method for accounting for unearned revenues, which of the following pairs of journal entry for
Initial Entry Adjusting Entry
A.
Cash Unearned Consulting Revenue
Unearned Consulting Rev Consulting Revenue
B.
Cash Consulting Revenue
Consulting Revenue Unearned Revenue
C.
Cash Unearned Revenue
Unearned Revenue Cash
D.
Consulting Revenue Unearned Revenue
Cash Consulting Revenue
E.
Cash Consulting Revenue
Unearned Revenue Unearned Revenue
A. Option A
B. Option B
C. Option C
D. Option D
E. Option E
135. Under the alternative method for recording prepaid expenses, which is the correct set of journal entries?
Initial Entry Adjusting Entry
A.
Insurance Expense Prepaid Insurance
Cash Insurance Expense
B.
Cash Prepaid Insurance
Insurance Expense Insurance Expense
C.
Prepaid Expense Prepaid Insurance
Cash Insurance Expense
D.
Prepaid Expense Insurance Expense
Cash Prepaid Insurance
E.
Prepaid Expense Cash
Insurance Expense Prepaid Insurance
A. Option A
B. Option B
C. Option C
D. Option D
E. Option E
136. The alternative method of accounting for prepayments
A. Initially records all prepaid expenses with debits to expense accounts.
B. Initially records all prepaid expenses with credits to expense accounts. 750
C. Requires an adjusting entry because expenses are understated. 425
D. Requires an adjusting entry if the prepaid is consumed during the period. 325
E. Requires an adjusting entry because net income is understated.
137. The Unadjusted Trial Balance columns of a company's work sheet show the balance in the Office Supplies account as
A. $325 debit
B. $325 credit
C. $425 debit
D. $750 debit
E. $750 credit
138. A 10-column spreadsheet used to draft a company's unadjusted trial balance, adjusting entries, adjusted trial balanc
A. Adjusted trial balance
B. Work sheet
C. Post-closing trial balance
D. Unadjusted trial balance
E. General ledger
139. Accumulated depreciation, accounts receivable, and service fees earned would be sorted to which respective column
A. Balance Sheet-Credit; Balance Sheet Debit; and Income Statement-Credit.
B. Balance Sheet-Debit; Balance Sheet; and Income Statement-Credit.
C. Income Statement-Debit; Balance Sheet-Debit; and Income Statement-Credit.
D. Income Statement-Debit; Income Statement-Debit; and Balance Sheet-Credit.
E. Balance Sheet-Credit; Income Statement-Debit; and Income Statement-Credit.
140. A company shows a $600 balance in prepaid insurance in the Unadjusted Trial Balance columns of the work sheet. T
A. $200 less in net income.
B. $200 more in net income.
C. $200 difference between the debit and credit columns of the unadjusted trial balance.
D. $200 of prepaid insurance.
E. An error in the financial statements.
on the post-closing trial balance:
ome permanent accounts.
al statements.
hese entries to the ledger accounts
which of the following pairs of journal entry formats is correct?
Answer 131
C. Depreciation Expense-Office Equipment
Depreciation expense is transferred to income summary account at the time of closing entries. So,
it is not to appear in post closing trial balance.
Answer 132
A. All ledger accounts with balances, none of which can be temporary accounts.
All the temporary accounts are transferred to income summary account in closing entries.
Answer 133
B. A post-closing trial balance should include only permanent accounts.
Post closing trial balance only includes permanent accounts.
Answer 134
A. Option A
Unearned Consulting Revenue is credited at the time of receipt of cash and it is
debited with the amount of consulting revenue earned and consulting revenue is
credited.
Answer 135
D. Option D
Prepaid Insurance is debited at the time of payment and it is credited with the amount
of insurance expense expired and insurance expense is debited.
Answer 136
A. Initially records all prepaid expenses with debits to expense accounts.
All the prepayments can be recorded as debit to expense accounts and adjusting entry can be
made with prepaid debited with the amount of prepaid to be carried forward to next year and
credit to expense account.
Answer 137
A. $325 debit
Office Supplies adjusted balance = Unadjusted balance less supplies used
Office Supplies adjusted balance = $ 750 less $ 425 = $ 325
Answer 138
B. Work sheet
Worksheet is an optional step in the accounting process.
Answer 139
A. Balance Sheet-Credit; Balance Sheet Debit; and Income Statement-Credit.
Accumulated depreciation is shown on Balance Sheet on credit side, Accounts Receivable on debit
side of Balance Sheet and Service Fees earned on Income statement credit side.
Answer 140
A. $200 less in net income.
The expired insurance will reduce net income by $ 200.
ow the balance in the Office Supplies account as $750. The Adjustments columns show that $425 of these supplies were used during
balance, adjusting entries, adjusted trial balance, and financial statements and which is an optional tool in the accounting process is a
ned would be sorted to which respective columns in completing a work sheet?
sted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results
d trial balance.
upplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is:
the accounting process is a(n):
his adjusting entry results in:
s of the work sheet is:
