31) Which of the following financial statement(s) is(are) prepared using the adjusted trial balance?
A) The balance sheet and the income statement only
B) Balance sheet, income statement, and statement of retained earnings
C) The balance sheet only
D) The income statement only
32) A tired accountant failed to record the adjusting entry for accrued revenues. How does this error affect the balance sheet?
A) The assets for the period will be overstated.
B) The assets for the period will be understated.
C) The liabilities for the period will be overstated.
D) The liabilities for the period will be understated.
33) Which of the following is NOT a correct statement about adjusting entries?
A) Every adjusting entry affects Cash.
B) Every adjusting entry affects the balance sheet.
C) Every adjusting entry affects net income.
D) Every adjusting entry must balance.
34) The adjustment for an accrued expense:
A) increases expenses and decreases assets.
B) increases expenses and increases liabilities.
C) decreases expenses and increases liabilities.
D) decreases expenses and increases assets.
35) The adjustment for an accrued revenue:
A) is necessary because a business often earns revenue before they receive the cash.
B) increases a payable account.
C) decreases a receivable account.
D) is necessary because a business often receives cash before it performs the service.
36) The debit to the Unearned Revenue account represents the:
A) value of services owed to customers.
B) amount of cash to be paid for future services.
C) amount of cash to be collected from customers.
D) value of services performed in the current period.
37) The adjusting entry to record the accrual of income tax expense includes a:
A) debit to Income Tax Payable.
B) credit to Income Tax Expense.
C) credit to Accounts Payable.
D) credit to Income Tax Payable.
38) In the preparation of the adjusted trial balance using a worksheet:
A) the unadjusted trial balance columns come from last period's financial statements.
B) four columns are needed for the adjustments.
C) the adjusted trial balance columns give the final account balances.
D) the sum of the debits do not have to equal the sum of the credits in the side-by-side columns.
39) On December 1 of the current year, Prepaid Rent was debited $5,400 for three months of rent, to cover the period, December 1 to February 28. The amount of the adjusting entry on December 31 is:
A) $0.
B) $1,800.
C) $3,600.
D) $5,400.
40) A construction company purchased a new bulldozer for $90,000 on January 1, 2011. The company estimates that the bulldozer will have a useful life of nine years and then be worthless. Using the straight-line depreciation method, yearly depreciation expense will be:
A) $0.
B) $10,000.
C) $45,000.
D) $90,000.