173.The adjusted trial balance contains information pertaining to:
A.Asset accounts only.
B.Balance sheet accounts only.
C.Income statement accounts only.
All general ledger accounts.
E.Revenue accounts only.
174.Financial statements are typically prepared in the following order:
A.Balance sheet, statement of retained earnings, income statement.
B.Statement of retained earnings, balance sheet, income statement.
C.Income statement, balance sheet, statement of retained earnings.
Income statement, statement of retained earnings, balance sheet.
E.Balance sheet, income statement, statement of retained earnings.
175.Under the alternative method for recording prepaid expenses, which is the correct set of journal entries?
Initial Entry
Adjusting Entry
A)Insurance ExpensePrepaid Insurance
CashInsurance Expense
B)CashPrepaid Insurance
Insurance ExpenseInsurance Expense
C)Prepaid InsurancePrepaid Insurance
CashInsurance Expense
D)Prepaid InsuranceInsurance Expense
CashPrepaid Insurance
E)Prepaid InsuranceCash
Insurance ExpensePrepaid Insurance
Option A
B.Option B
C.Option C
D.Option D
E.Option E
176.Which of the following statements related to U.S. GAAP and IFRS is
incorrect:
A.Both U.S. GAAP and IFRS include guidance for adjusting entries.
B.Both U.S. GAAP and IFRS prepare the same four financial statements.
U.S. GAAP does not require items to be separated by current and noncurrent classifications on the balance sheet.
D.U.S. GAAP balance sheets report current items first.
E.IFRS balance sheets normally present noncurrent items first.
177.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?
A.debit Interest Payable, $2,000; credit Interest Expense, $2,000
debit Interest Expense, $2,000; credit Interest Payable, $2,000
C.debit Interest Expense, $2,000; credit Cash, $2,000
D.debit Interest Expense, $4,000; credit Interest Payable, $4,000
E.debit Interest Expense, $24,000; credit Interest Payable, $24,000
$300,000 * .08 * 30/360 = $2,000
178.An annual reporting period consisting of any twelve consecutive months is known as:
Fiscal year.
B.Calendar year.
C.Interim financial period.
D.Natural business year.
E.Seasonal year.
179.Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:
A.Increase an expense; increase a liability.
B.Increase an asset; increase revenue.
Decrease a liability; increase revenue.
D.Increase an expense; decrease an asset.
E.Increase an expense; decrease a liability.
180.The adjusting entry to record an accrued expense is:
Increase an expense; increase a liability.
B.Increase an asset; increase revenue.
C.Decrease a liability; increase revenue.
D.Increase an expense; decrease an asset.
E.Increase an expense; decrease a liability.
181.The adjusting entry to record an accrued revenue is:
A.Increase an expense; increase a liability.
Increase an asset; increase revenue.
C.Decrease a liability; increase revenue.
D.Increase an expense; decrease an asset.
E.Increase an expense; decrease a liability.
182.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:
$5,000.
B.$7,500.
C.$12,500.
D.$2,500.
E.$10,000.
$2,500 * 3 = $7,500 earned
$12,500 - $7,500 = $5,000
183.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:
Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400.
B.Debit Salaries Expense, $3,600; credit Salaries Payable, $3,600.
C.Debit Salaries Expense, $9,000; credit Salaries Payable, $9,000.
D.Debit Salaries Payable, $5,400; credit Salaries Expense, $5,400.
E.Debit Salaries Expense, $5,400; credit Cash, $5,400.
$1,800 * 3 = $5,400
184.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:
A.Debit Depreciation Expense, $9,000; credit Accumulated Depreciation, $9,000.
Debit Depreciation Expense, $18,000; credit Accumulated Depreciation, $18,000.
C.Debit Depreciation Expense, $90,000; credit Accumulated Depreciation, $90,000.
D.Debit Depreciation Expense, $18,000; credit Equipment, $18,000.
E.Debit Depreciation Expense, $9,000; credit Equipment, $9,000.
($95,000 - $5,000)/5 = $18,000
185.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:
A.Debit Depreciation Expense, $15,000; credit Equipment, $15,000.
B.Debit Equipment, $15,000; credit Accumulated Depreciation, $15,000.
C.Debit Depreciation Expense, $10,000; credit Accumulated Depreciation, $10,000.
D.Debit Depreciation Expense, $10,000; credit Equipment, $10,000.
Debit Depreciation Expense, $15,000; credit Accumulated Depreciation, $15,000.
186.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:
Debit Utilities Expense $215; credit Accounts Payable $215.
B.Debit Accounts Payable $215; credit Utilities Expense $215.
C.Debit Prepaid Utilities $215; credit Cash $215.
D.Debit Utilities Expense $215; credit Prepaid Utilities $215.
E.Debit Prepaid Utilities $215; credit Accounts Payable $215.