Question : 131. An error indicated if the following account has a balance : 1256796

 

 

131. An error is indicated if the following account has a balance appearing on the post-closing trial balance: 

A. Office Equipment

B. Accumulated Depreciation-Office Equipment

C. Depreciation Expense-Office Equipment

D. Common Stock

E. Salaries Payable

 

 

132. A post-closing trial balance includes: 

A. All ledger accounts with balances, none of which can be temporary accounts.

B. All ledger accounts with balances, none of which can be permanent accounts.

C. All ledger accounts with balances, which include some temporary and some permanent accounts.

D. Only revenue and expense accounts.

E. Only asset accounts.

 

 

133. Which of the following statements is true? 

A. Retained earnings must be closed each accounting period.

B. A post-closing trial balance should include only permanent accounts.

C. Information on the work sheet can be used in place of preparing financial statements.

D. By using a work sheet to prepare adjusting entries, you need not post these entries to the ledger accounts

E. Closing entries are only necessary if errors have been made.

 

 

134. Under the alternative method for accounting for unearned revenues, which of the following pairs of journal entry formats is correct?

Initial Entry

Adjusting Entry

 

A.

Cash

Unearned Consulting Revenue

Unearned Consulting Revenue

Consulting Revenue

 

B.

Cash

Consulting Revenue

Consulting Revenue

Unearned Revenue

 

C.

Cash

Unearned Revenue

Unearned Revenue

Cash

 

D.

Consulting Revenue

Unearned Revenue

Cash

Consulting Revenue

 

E.

Cash

Consulting Revenue

Unearned Revenue

Unearned Revenue

A. Option A

B. Option B

C. Option C

D. Option D

E. Option E

 

 

135. Under the alternative method for recording prepaid expenses, which is the correct set of journal entries?

 

Initial Entry

Adjusting Entry

 

A.

Insurance Expense

Prepaid Insurance

Cash

Insurance Expense

 

B.

Cash

Prepaid Insurance

Insurance Expense

Insurance Expense

 

C.

Prepaid Expense

Prepaid Insurance

Cash

Insurance Expense

 

D.

Prepaid Expense

Insurance Expense

Cash

Prepaid Insurance

 

E.

Prepaid Expense

Cash

Insurance Expense

Prepaid Insurance

A. Option A

B. Option B

C. Option C

D. Option D

E. Option E

 

 

136. The alternative method of accounting for prepayments 

A. Initially records all prepaid expenses with debits to expense accounts.

B. Initially records all prepaid expenses with credits to expense accounts.

C. Requires an adjusting entry because expenses are understated.

D. Requires an adjusting entry if the prepaid is consumed during the period.

E. Requires an adjusting entry because net income is understated.

 

 

137. The Unadjusted Trial Balance columns of a company’s work sheet show the balance in the Office Supplies account as $750. The Adjustments columns show that $425 of these supplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is: 

A. $325 debit

B. $325 credit

C. $425 debit

D. $750 debit

E. $750 credit

 

 

138. A 10-column spreadsheet used to draft a company’s unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements and which is an optional tool in the accounting process is a(n): 

A. Adjusted trial balance

B. Work sheet

C. Post-closing trial balance

D. Unadjusted trial balance

E. General ledger

 

 

139. Accumulated depreciation, accounts receivable, and service fees earned would be sorted to which respective columns in completing a work sheet? 

A. Balance Sheet-Credit; Balance Sheet Debit; and Income Statement-Credit.

B. Balance Sheet-Debit; Balance Sheet; and Income Statement-Credit.

C. Income Statement-Debit; Balance Sheet-Debit; and Income Statement-Credit.

D. Income Statement-Debit; Income Statement-Debit; and Balance Sheet-Credit.

E. Balance Sheet-Credit; Income Statement-Debit; and Income Statement-Credit.

 

 

140. A company shows a $600 balance in prepaid insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in: 

A. $200 less in net income.

B. $200 more in net income.

C. $200 difference between the debit and credit columns of the unadjusted trial balance.

D. $200 of prepaid insurance.

E. An error in the financial statements.