175.
On April 1, Santa Fe, Inc. paid Griffith Publishing Company $1,548 for 36-month
subscriptions to several different magazines. Santa Fe debited the prepayment to a
Prepaid Subscriptions account, and the subscriptions started immediately. What adjusting
entry should be made by Santa Fe, Inc. for the adjustment on December 31 of the first
year assuming the company is using a calendar reporting period and no previous
adjustments had been made?
176.
A company made no adjusting entry for accrued and unpaid employee salaries of $9,000
on December 31. Which of the following statements is true?
177.
The correct adjusting entry to accrued unpaid employee salaries of $9,000 on December
31 is:
178.
A company purchased new furniture at a cost of $16,000 on January 1. The furniture is
estimated to have a useful life of 6 years and a $1,000 salvage value. The company uses
the straight-line method of depreciation. What is the book value of the furniture on
December 31 of the first year?
179.
A company purchased a building at a cost of $280,000 on January 1. The building is
estimated to have a useful life of 15 years and a $40,000 salvage value. The company uses
the straight-line method of depreciation. What is the amount of depreciation expense for
the building for the second year?
180.
If Regent Tax Services’ office supplies account balance on March 1 was $1,400, the
company purchased $675 of supplies during the month, and a physical count of supplies
on hand at the end of March indicated $1,250 unused, what is the amount of the adjusting
entry for office supplies on March 31?
181.
The adjusted trial balance contains information pertaining to:
182.
Financial statements are typically prepared in the following order:
183.
Under the alternative method for recording prepaid expenses, which is the correct set of
journal entries?
184.
Which of the following statements related to U.S. GAAP and IFRS is
incorrect?
185.
On December 1, Milton Company borrowed $300,000, at 8% annual interest, from the
Tennessee National Bank. Interest is paid when the loan matures one year from the issue
date. What is the adjusting entry for accruing interest that Milton would need to make on
December 31, the calendar year-end?
186.
On October 2, Demitri Company borrowed $100,000, at 4% annual interest, from First
National Bank. Interest will be paid when the loan matures one year from the issue date.
What is the amount of interest that Demitri would accrue on December 31, the end of the
company’s fiscal year?
187.
On November 1, Phan Company borrowed $50,000, at 6% annual interest, from First
Security Bank. Interest will be paid when the loan matures one year from the issue date.
What is correct adjusting entry related to the interest that Phan must make on December
31, the end of the company’s fiscal year?
188.
An annual reporting period consisting of any twelve consecutive months is known as:
189.
Assuming unearned revenues are originally recorded in balance sheet accounts, the
adjusting entry to record earning of unearned revenue is:
190.
The adjusting entry to record an accrued expense is:
191.
The adjusting entry to record an accrued revenue is:
192.
On October 1, Goodwell Company rented warehouse space to a tenant for $2,500 per
month and received $12,500 for five months’ rent in advance on that date. The collection
was credited to the Unearned Rent account. The company’s annual accounting period
ends on December 31. The Unearned Rent account balance at the end of December, after
adjustment, should be:
193.
On October 1, Goodwell Company rented warehouse space to a tenant for $2,500 per
month and received $12,500 for five months’ rent in advance on that date. The collection
was credited to the Unearned Rent account. The company’s annual accounting period
ends on December 31. The Rent Revenue account balance at the end of December, after
adjustment, should be:
194.
Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working
day. They are paid on Monday for the five-day workweek ending on the previous Friday.
Assume that year ended December 31, is a Wednesday and all employees will be paid
salaries for five full days on the following Monday. The adjusting entry needed on
December 31 is:
195.
On January 1, Imlay Company purchases manufacturing equipment costing $95,000 that is
expected to have a five-year life and an estimated salvage value of $5,000. Imlay uses the
straight-line depreciation method to allocate costs. The adjusting entry needed on
December 31 of the first year is:
196.
Holman Company owns equipment with an original cost of $95,000 and an estimated
salvage value of $5,000 that is being depreciated at $15,000 per year using the straight–
line depreciation method. The adjusting entry needed to record annual depreciation is:
197.
On December 31, 2015 Carmack Company received a $215 utility bill for December that it
will not pay until January 15. The adjusting entry needed on December 31 to accrue this
expense is:
Matching Questions
198.
Match the following
1. Accounting
Accounts that report on activities related to
one or more future accounting periods; they
carry their ending balances into the next
2. Closing
Recurring steps in preparing financial
statement performed each accounting period,
beginning with analyzing transactions and
ending with a post-closing trial balance or
3. Post-closing
Accounts that accumulate data related to
one accounting period only; they include
income statement accounts, dividends, and
4. Operating
cycle of a
Various analyses and internal documents
prepared by accountants when organizing
information for internal and external decision
5. Permanent
A temporary account only used for the
closing process that contains a credit for the
sum of all revenues and a debit for the sum of
6. Working
A widely used working paper that is a
useful tool for preparers in working with
accounting information, usually not available
Entries used to transfer end-of-period
balances in revenue, expense, and dividends
accounts to the permanent retained earnings
8. Income
A list of permanent accounts and their
entries are journalized and posted.
9. Temporary
The time span from when cash is used to
acquire goods and services until cash is
received from the sale of those goods and
199.
Match the following terms with the appropriate definitions.
Tangible assets that are long-lived and
used to produce or sell products or
2. Unclassified
The stockholders’ claim on the assets of
3. Long-term
A balance sheet that organizes the
assets and liabilities into important
subgroups that provide more information to
Long-term resources that benefit
business operations, usually lack physical
A ratio that is used to help evaluate a
company’s ability to pay its short-term
obligations, calculated by dividing current
6. Classified
Entries recorded at the end of each
accounting period to transfer end–of-period
balances in revenue, expense, and dividends
accounts to the permanent retained
7. Closing
Obligations due to be paid or settled
within one year or the operating cycle of a
8. Current
Assets that are held for more than the
longer of one year or the operating cycle of
the company and are not used in
9. Stockholders’
Cash and other resources that are
expected to be sold, collected, or used