186.An adjusted trial balance
a.is prepared after the financial statements are completed.
b.proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made.
c.is a required financial statement under IFRS.
d.cannot be used to prepare financial statements.
187.Which of the statements below is
not
true?
a.An adjusted trial balance should show ledger account balances.
b.An adjusted trial balance can be used to prepare financial statements.
c.An adjusted trial balance proves the mathematical equality of debits and credits in the ledger.
d. An adjusted trial balance is prepared before all transactions have been journalized.
188.A document prepared to prove the equality of debits and credits after all adjustments have been prepared is the
a.adjusted statement of financial position.
b.adjusted trial balance.
c.adjusted financial statements.
d. post-closing trial balance.
189.Similarities between International Financial Reporting Standards (IFRS) and U.S. GAAP include all of the following
except
a.Cash-basis accounting is
not
in accordance with either IFRS or U.S. GAAP.
b.Both IFRS and U.S. GAAP allow revaluation of item such as land and building to fair value.
c.Both IFRS and U.S. GAAP divide the economic life of companies into artificial time periods.
d. The form and content of financial statements are very similar under IFRS and U.S. GAAP.
190.Cara, Inc. purchased supplies costing $2,500 on January 1, 2014 and recorded the transaction by debiting an expense. At the end of the year $1,000 of the supplies are still on hand. If Cara, Inc. does
not
make the appropriate adjusting entry, what is the impact on its statement of financial position at December 31, 2014?
a.Assets understated by $1,500.
b.Equity understated by $1,500.
c.Equity overstated by $1,000.
d.Assets understated by $1,000.
191.Wave Inn is a resort located in Canada. Wave Inn collects cash when guests make a reservation. During December 2013, Wave Inn collected $75,000 of cash and recorded the receipt by recognizing revenue. By the end of the month Wave Inn had earned one third of this amount, the other two thirds will be earned during January 2014. The adjusting entry required at December 31, 2013 would impact the statement of financial position by
a.Decreased Equity $50,000.
b.Decreased Liabilities $50,000.
c.Increased Assets $75,000.
d.Increased Equity $25,000.
a
192.Myron is a barber who does his own accounting for his shop. When he buys supplies he routinely debits Supplies Expense. Myron purchased $1,500 of supplies in January and his inventory at the end of January shows $400 of supplies remaining. What adjusting entry should Myron make on January 31?
a.Supplies Expense......................................400
Supplies...........................................400
b.Supplies Expense......................................1,500
Cash1,500
c.Supplies...........................................400
Supplies Expense...........................................400
d.Supplies Expense......................................1,100
Supplies...........................................1.100
a
193.Alternative adjusting entries do
not
apply to
a.accrued revenues and accrued expenses.
b.prepaid expenses.
c.unearned revenues.
d.prepaid expenses and unearned revenues.
a
194.Mike Conway is a lawyer who requires that his clients pay him in advance of legal services rendered. Mike routinely credits Service Revenue when his clients pay him in advance. In June Mike collected $16,000 in advance fees and completed 75% of the work related to these fees. What adjusting entry is required by Mike's firm at the end of June?
a.Unearned Service Revenue ..............................12,000
Service Revenue ...........................................12,000
b.Unearned Service Revenue ..............................4,000
Service Revenue ...........................................4,000
c.Cash ...........................................16,000
Service Revenue ...........................................16,000
d.Service Revenue ......................................4,000
Unearned Service Revenue ....................................4,000
a
195.If prepaid expenses are initially recorded in expense accounts and have
not
all been used at the end of the accounting period, then failure to make an adjusting entry will cause
a.assets to be understated.
b.assets to be overstated.
c.expenses to be understated.
d.contra-expenses to be overstated.