Chapter 4,5,7 Acct.

Front 1

Failure to prepare an adjusting entry at the end of a period to record an accrued revenue would cause:

Back 1

an understatement of assets and an understatement of revenues.

Front 2

The policy at Adler Corporation is to expense all office supplies at the time of purchase. On the last day of the accounting period, there are $1,400 of unused office supplies on hand and the balance of supplies expense is $3,500. What should the accountant do?

Back 2

Debit Supplies and credit Supplies Expense for $1,400.

Front 3

The following accounts show balances on the adjusted trial balance. Which of these account balances will not appear the same on the balance sheet?

Back 3

retained earnings

Front 4

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

Back 4

Liabilities at the end of the year are understated

Front 5

Nacron Company borrowed $8,000 from the bank signing a 6%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be

Back 5

debit Interest Expense, $40; credit Interest Payable, $40.

Front 6

Skypress Company collected $5,600 in May of 2010 for 4 months of service which would take place from October of 2010 through January of 2011. The revenue reported from this transaction during 2010 would be

Back 6

4200

Front 7

Raxon Company borrowed $30,000 from the bank signing a 6%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be

Back 7

debit Interest Expense, $150; credit Interest Payable, $150

Front 8

Under the perpetual inventory system, in addition to making the entry to record a sale, a company would

Back 8

debit cost of goods sold and credit inventory

Front 9

Which of the following items does not result in an adjustment in the merchandise inventory account under a perpetual system?

Back 9

Payment of freight costs for goods shipped to a customer

Front 10

When sales of merchandise are made for cash, the transaction may be recorded by the following entry

Back 10

debit cash, credit sales

Front 11

Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account?

Back 11

inventory

Front 12

When using the periodic inventory system, which of the following is not a step in determining cost of goods purchased?

Back 12

subtract cost from ending inventory

Front 13

Which has a normal credit balance

Back 13

sales revenue

Front 14

Which of the following would not be classified as a contra account?

Back 14

sales revenue

Front 15

A bank statement

Back 15

shows the activities that increased or decreased the depositor's account balance.

Front 16

paid checks are shown as

Back 16

debits

Front 17

deposit made by a company will appear on the bank statement as a

Back 17

credit

Front 18

Related purchasing activities include

Back 18

ordering, receiving, paying

Front 19

Which one of the following items would not be considered cash?

Back 19

postdated check