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Exam 3: Adjusting Accounts for Financial Statements

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Question 51

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An ________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

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unadjusted...

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Question 52

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The usual order for the asset subgroups of a classified balance sheet is:

A) Current assets,prepaid expenses,long-term investments,intangible assets.
B) Long-term investments,current assets,plant assets,intangible assets.
C) Current assets,long-term investments,plant assets,intangible assets.
D) Intangible assets,current assets,long-term investments,plant assets.
E) Plant assets,intangible assets,long-term investments,current assets.

F) C) and E)
G) A) and C)

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Question 53

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A company's December 31 work sheet for the current period appears below.Based on the information provided,what is net income for the current period?

The balances in the unadjusted columns of a work sheet will agree with:

Which of the following statements is incorrect?

Two main accounting principles used in accrual accounting are expense recognition and full closure.

Intangible assets are assets that are long-term,have physical form,and are used to produce or sell products and services.

Karl Company accrued wages of $7,350 that were earned by employees unpaid at the year-end.Assuming Karl uses reversing entries,which of the following entries correctly reverses the accrued wages at the beginning of the following year?

On April 1,Otisco,Inc.paid Garcia Publishing Company $1,548 for 36-month subscriptions to several different magazines.Otisco debited the prepayment to a Prepaid Subscriptions account,and the subscriptions started immediately. -What amount should appear in the Prepaid Subscription account for Otisco,Inc.after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made?

From the information provided,calculate Giuseppe's profit margin ratio for each of the three years.Comment on the results,assuming that the industry average for the profit margin ratio is 6% for each of the three years.

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

Reversing entries are optional.

Which of the following is the usual final step in the accounting cycle?

On October 15,a company received $15,000 cash as a down payment on a consulting contract.The amount was credited to Unearned Consulting Revenue.By October 31,10% of the services required by the contract were completed.The company will record consulting revenue of $1,500 from this contract for October.

The following unadjusted and adjusted trial balances are from the current year's accounting system for Excelsior. Present the six adjusting entries in general journal form that explain the changes in the account balances from the unadjusted to the adjusted trial balance.

Match the following transactions with types of adjustments.

Describe the adjusting entries,including the accounts used,for 1)accrued expenses and 2)accrued revenues.

A contra account is an account linked with another account; it is added to that account to show the proper amount for the item recorded in the associated account.

If a company records prepayment of expenses in an asset account,the adjusting entry when all or part of the prepaid asset is used or expired would:

The accounting cycle refers to the sequence of steps used in preparing the work sheet.