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Exam 13: The Double-Entry Accounting System

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Question 41

True/False

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Indicate whether each of the following statements is true or false. a)________ A debit entry to Cash is never accompanied by a credit entry to a revenue account.b)________ The adjustment for accrued salary expenses would include a debit to Salaries Expense and a credit to Salaries Payable.c)________ Adjusting entries will always include either a debit to an expense account or a credit to a revenue account.d)________ The closing entry for an expense account involves a debit to retained earnings and a credit to the expense account.e)________ The closing entry for a revenue account involves a debit to the revenue account and a credit to Retained Earnings.

A) True
B) False

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Question 42

Multiple Choice

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A transaction has been recorded in the T-accounts of Powell Corporation as follows: Which of the following reflects how this event affects the company's financial statements?

A) Option A
B) Option B
C) Option C
D) Option D

E) B) and C)
F) A) and B)

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Question 43

Multiple Choice

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The following entry is taken from the journal of a merchandising company: What is the effect of this entry on the company's financial statements?

Vargas Company purchased a computer for $3,000 on January 1, Year 1. The computer is estimated to have a 5-year useful life and a $500 salvage value. What adjusting entry would Vargas record on December 31, Year 1 to recognize expense related to use of the computer?

Which of the following is a true statement? (Note: A statement may be true even if it does not identify all accounts that appear on that particular financial statement.)

The closing entry for the Dividends account would involve which of the following?

Double entry accounting requires that every entry must include at least one debit and at least one credit.

The following is a random list of the adjusted account balances of Wyoming Company as of the end of the current accounting period: What is the total of the credit account balances that will be shown on the adjusted trial balance?

Consider the following situations that require adjustments for Anaheim Company at December 31, Year 1: 1)Owed salary expenses totaling $10,500 that will be paid during January of Year 22)The supplies account has a balance of $2,400 and a physical count of the supplies revealed that $660 of unused supplies were available for future use3)On October 1, Year 1, the company had collected an advance payment from a customer for $96,000 for services to be rendered equally over the six-month period beginning on that date. Required:Record the adjusting entry required for each of the situations described above.

Which one of the following would not be included in a closing entry?

The balance in Retained Earnings is decreased by debiting the account.

A transaction has been recorded in the T-accounts of Horowitz Corporation as follows: Which of the following reflects how this event affects the company's financial statements?

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA An adjusting entry recorded as a debit to Interest Expense and a credit to Interest Payable.

At December 31, Year 1, the records of Jefferson Corporation included the following adjusted account balances. (Note: This is an incomplete listing of the company's adjusted account balances.) Required:a)Prepare the necessary closing entries in general journal format.

Which accounts are categorized as temporary?

Which of the following journal entries would be required to close a salaries expense account?

On August 1, Year 1, Benjamin and Associates collected $18,000 in advance for legal services to be rendered for one year. Which of the following entries reflect the end-of-the-year adjustment to reflect revenue earned?

On August 1, Year 1, Bellisa Company issued a $10,000 6%, 1-year note to Citizens Bank. Which of the following entries reflects the adjustment required as of December 31, Year 1?

The Baker Company purchased $1,000 of supplies on account. How would this event be reflected in T-accounts?

Which of the following statements regarding credit entries is true?