The cost of an asset less accumulated depreciation equals: 

A. book value.

B. residual value.

 C. depreciation expense.

D. None of these answers are correct.

 

If the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for Supplies would be: 

 A. $900.  

  B. $350.  

  C. $550.  

 D. $450.     

 

Depreciation Expense would be found on which of the following financial statements? 

 A. Income statement  

  B. Statement of Owner’s Equity  

  C. Balance sheet  

  D. Depreciation report

 

Which of the following accounts would appear on the balance sheet? 

 A. Depreciation Expense  

 B. Fees Earned  

 C. Accumulated Depreciation  

 D. None of these are correct.  

 

A form used to organize and check data before preparing financial reports is known as a(n): 

 A. income statement.  

 B. balance sheet.  

 C. trial balance.  

  D. worksheet.

 

Which of the following is most likely to result in an adjusting entry at the end of the period? 

 A. Payment for routine maintenance on the company van  

  B. Owner’s withdrawals  

  C. Payment of two months’ insurance in advance  

  D. Payment of one month’s rent

 

When historical cost is used to record equipment, it would appear as the: 

 A. original cost on the income statement.  

  B. original cost on the balance sheet.  

   C. residual value on the balance sheet.  

  D. residual value on the income statement.  

 

Bringing account balances up to date before preparing financial reports is called: 

 A. adjusting.  

  B. posting.  

  C. analyzing.  

  D. journalizing.  

 

Not recording the Prepaid Rent used causes: 

 A. assets to be too low.  

 B. expenses to be too high.  

  C. revenue to be too high.  

  D. assets to be too high.  

 

A contra-asset is: 

 A. in reality a liability.  

  B. an account with an opposite balance of a normal asset.  

  C. an asset with a debit balance.  

  D. an account that increases the asset.  

 

Equipment with a cost of $150,000 has an accumulated depreciation of $100,000. What is the historical cost of the equipment? 

 A. $100,000  

 B. $200,000  

 C. $50,000  

 D. $150,000  

 

The estimated value of an item at the end of its useful life is: 

A. residual value.  

B. accumulated depreciation.  

C. depreciation expense.  

D. None of these answers are correct.  

 

Evans Golf Academy estimated depreciation on its building at $300. The adjusting entry for depreciation of the building would include: 

A. a debit to Depreciation Expense for $300.  

B. a credit to Depreciation Expense for $300.  

C. a credit to Building for $300.  

D. a debit to Accumulated Depreciation for $300.  

 

Equipment with a cost of $200,000 has an accumulated depreciation of $100,000. What is the book value of the equipment? 

A. $200,000  

B. $100,000  

C. $150,000              

D. $50,000  

 

Which of the following accounts would most likely not need to be adjusted at the end of the year? 

A. Cash  

B. Accumulated Depreciation  

C. Prepaid Rent  

D. Office Supplies

 

Question 16 of 30

The income statement credit column of the worksheet showed the following revenues:

Catering Fees$500

Cleaning Fees800

 

The journal entry to close the revenue accounts is: 

 

A. 

Catering Fees500

Cleaning Fees800

Income Summary1,300 

 

B. 

Capital1,300

Income Summary1,300 

 

C. 

Catering Fees500

Cleaning Fees800

Capital1,300 

 

D. 

Income Summary1,300

Catering Fees500

Cleaning Fees800

 

 

Income Summary: 

A. is a temporary account.  

B. is a permanent account.  

C. summarizes revenue and expenses and transfers the balance to Capital.  

D. Both A and C are correct.

 

Which of the following columns of the worksheet are referred to when preparing closing entries to the Income Summary? 

 A. Adjustments columns  

 B. Adjusted trial balance columns  

 C. Balance sheet columns  

 D. Income statement columns  

 

Adjusting journal entries: 

 A. need not be journalized since they appear on the worksheet.  

 B. are not needed if closing entries are prepared.  

 C. need not be posted if the financial statements are prepared from the worksheet.  

 D. must be journalized and posted.

 

When the balance in the Income Summary account is a credit, the company has: 

 A. made an error in their closing entries.  

 B. incurred a net loss.  

 C. incurred a net income.  

 D. had more expenses than revenue.

     

How do you close the expense accounts? 

 A. Debit Capital; credit the expense accounts  

 B. Credit Income Summary; debit the expense accounts  

 C. Debit Income Summary; credit the expense accounts  

 D. Credit Capital; debit the expense accounts 

 

How do you close a revenue account? 

 A. Credit Income Summary; debit Revenue  

 B. Credit Capital; debit Revenue  

 C. Debit Income Summary; credit Revenue  

 D. Debit Capital; credit Revenue

 

The adjusting entry to record the expired rent would be to: 

 A. debit Prepaid Rent; credit Cash.  

 B. debit Cash; credit Prepaid Rent.  

 C. debit Prepaid Rent; credit Rent Expense.  

 D. debit Rent Expense; credit Prepaid Rent.  

 

Closing entries: 

 A. need not be posted if the financial statements are prepared from the worksheet.  

 B. must be journalized and posted.  

 C. are not needed if adjusting entries are prepared.  

 D. need not be journalized since they appear on the worksheet.

 

Which of the following accounts would appear on the post-closing trial balance? 

 A. Owner’s Capital  

 B. Fees Earned  

 C. Income Summary  

 D. Rent Expense  

 

M. Smuts showed a net income of $6,000. The entry to close the Income Summary account would include a: 

 A. debit to M. Smuts Capital, $6,000.  

 B. credit to M. Smuts Capital, $6,000.  

 C. debit to Income Summary, $6,000.  

 D. Both B and C are correct.

 

Which of the following accounts will be directly closed to Capital at the end of the fiscal year? 

 A. Withdrawals  

 B. Salaries Expense  

 C. Fees Revenue  

 D. Depreciation Expense  

 

Which of the following accounts would not be considered a permanent account? 

 A. Accounts Payable  

 B. Salaries Expense  

 C. Accounts Receivable  

 D. Office Supplies

 

Which of the following sequence of actions describes the proper order in the accounting cycle? 

 A. Analyze transactions, journalize, post, adjust, prepare financial statements, close  

 B. Journalize, post, close, prepare financial statements, adjust, and analyze transactions  

 C. Prepare financial statements, journalize, post, adjust, analyze transactions, close  

 D. Post, close, prepare financial statements, adjust, analyze transactions, and journalize  

 

The adjusting entry for accrued salaries is to: 

A. debit Salaries Payable; credit Salaries Expense.  

B. debit Salaries Expense; credit Cash.  

C. debit Salaries Expense; credit Salaries Payable.             

D. debit Cash; credit Salaries Expense.