Chapter 3, Adjusting the Accounts Video Solutions, Accounting Principles , Tenth Edition

Problem 1

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.

Puneet Prajapati

Numerade Educator

Problem 2

The time period assumption states that:
a. companies must wait until the calendar year is completed to prepare financial statements.
b. companies use the fiscal year to report financial information.
c. the economic life of a business can be divided into artificial time periods.
d. companies record information in the time period in which the events occur.

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Problem 3

Which of the following statements about the accrual basis of accounting is false?
a. Events that change a company's financial statements are recorded in the periods in which the events occur.
b. Revenue is recognized in the period in which it is earned.
c. This basis is in accord with generally accepted accounting principles.
d. Revenue is recorded only when cash is received, and expense is recorded only when cash is paid.

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11:24

Problem 4

The principle or assumption dictating that efforts (expenses) be matched with accomplishments (revenues) is the:
a. expense recognition principle.
b. cost assumption.
c. time period principle.
d. revenue recognition principle.

Puneet Prajapati

Numerade Educator

02:44

Problem 5

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 in which they are earned.
c. balance sheet and income statement accounts have correct balances at the end of an accounting period.
d. All of the above.

Oluwadamilola Ameobi

Numerade Educator

02:44

Problem 6

Each of the following is a major type (or category) of adjusting entries except:
a. prepaid expenses.
b. accrued revenues.
c. accrued expenses
d. earned revenues

Oluwadamilola Ameobi

Numerade Educator

Problem 7

The trial balance shows Supplies $$\$ 1,350$$ and Supplies Expense $$\$ 0$$. If $$\$ 600$$ of supplies are on hand at the end of the period, the adjusting entry is:
$$
\begin{array}{l|l|l}
\text { a. Supplies } & 600 \\
\text { Supplies Expense } & & 600
\end{array}
$$
$$
\begin{array}{l|l}
\text { b. Supplies } \\
\text { Supplies Expense }
\end{array} \quad{ }^{750} \mid 750
$$
c. Supplies Expense Supplies $|750| 750$
d. Supplies Expense Supplies $\left.\left.\right|^{600}\right|_{600}$

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Problem 8

Adjustments for prepaid expenses:
a. decrease assets and increase revenues.
b. decrease expenses and increase assets.
c. decrease assets and increase expenses.
d. decrease revenues and increase assets.

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Problem 9

Accumulated Depreciation is
a. a contra asset account.
b. an expense account.
c. an owner's equity account.
d. a liability account.

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Problem 10

Queenan Company computes depreciation on deliver equipment at $$\$ 1,000$$ for the month of June. The adjustin entry to record this depreciation is as follows.
a. Depreciation Expense
Accumulated Depreciation -
Oueenan Company
$$1,\left.000\right|_{1,000}$$
b. Depreciation Expense
Equipment
$$\left.\left.\right|^{1,000}\right|_{1,000}$$
c. Depreciation Expense
Accumulated Depreciation -
Equipment
1,000
1,000
d. Equipment Expense
\begin{tabular}{c|c} $$\begin{array}{c}\text { Accumulated Depreciation }- \\ \text { Equipment }\end{array}$$ & 1,000 \\ & 1,000 \end{tabular}

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Problem 11

Adjustments for uncarned 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

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Problem 12

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.

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Problem 13

Kathy Siska earned a salary of $$\$ 400$$ for the last week of September. She will be paid on October 1. The adjusting entry for Kathy's employer at September 30 is:
$$
\text { a. No entry is required. }
$$
$$
\begin{array}{c|c|c}
\text { b. Salaries and Wages Expense } & 400 & \\
\text { Salaries and Wages Payable } & & 400
\end{array}
$$
$$
\begin{array}{l|l|l}
\text { c. Salaries and Wages Expense } & 400 \\
\text { Cash } & & 400
\end{array}
$$
$$
\begin{array}{l|l|l}
\text { d. Salaries and Wages Payable } & 400 &400 \\
\text { Cash }
\end{array}
$$

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Problem 14

Which of the following statements is incorrect concerning the adjusted trial balance?
a. An adjusted trial balance proves the equality of the total debit balances and the total credit balances in the ledger after all adjustments are made.
b. The adjusted trial balance provides the primary basis for the preparation of financial statements.
c. The adjusted trial balance lists the account balances segregated by assets and liabilities.
d. The adjusted trial balance is prepared after the adjusting entries have been journalized and posted.

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Problem 15

The trial balance shows Supplies $\$ 0$ and Supplies Expense $\$ 1,500$. If $\$ 800$ of supplies are on hand at the end of the period, the adjusting entry is:
a. Debit Supplies $\$ 800$ and credit Supplies Expense $\$ 800$.
b. Debit Supplies Expense $\$ 800$ and credit Supplies $\$ 800$
c. Debit Supplies $\$ 700$ and credit Supplies Expense $\$ 700$.
d. Debit Supplies Expense $\$ 700$ and eredit Supplies $\$ 700$.

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