Multiple Choice Questions
28.Adjusting entries are prepared:
A. Before financial statements and after a trial balance has been prepared.
B. After a trial balance has been prepared and after financial statements are prepared.
C. After posting but before a trial balance is prepared.
D. Anytime an accountant sees fit to prepare the entries.
29.Adjusting entries
A. Are generally made daily.
B. Assign revenues to the period in which they are received.
C. Generally fall into one of two categories.
D. Are needed whenever revenue transactions affect more than one period.
30.We can compare income of the current period with income of a previous period to determine whether the operating results are improving or declining:
A. Only if each accounting period covered is a full year.
B. Only if the same accountant prepares the income statement each period.
C. Only if the accounting periods are equal in length.
D. Only if a manual accounting system is used in both periods.
31.The purpose of adjusting entries is to:
A. Prepare the revenue and expense accounts for recording the revenue and expenses of the next accounting period.
B. Record certain revenue and expenses that are not properly measured in the course of recording daily routine transactions.
C. Correct errors made during the accounting period.
D. Update the owners' equity account for the changes in owners' equity that had been recorded in revenue and expense accounts throughout the period.
32.Which of the following is
not
a purpose of adjusting entries?
A. To prepare the revenue and expense accounts for recording transactions of the following period.
B. To apportion the proper amounts of revenue and expense to the current accounting period.
C. To establish the proper amounts of assets and liabilities in the balance sheet.
D. To accomplish the objective of offsetting the revenue of the period with all the expenses incurred in generating that revenue.
33.Which of the following situations does not require Empire Company to record an adjusting entry at the end of January?
A. On January 1, Empire Company purchased delivery equipment with an estimated useful life of five years.
B. On January 1, Empire Company began delivery service for a large client who will pay at the end of a three-month period.
C. At the end of January, Empire Company pays the custodian for January office cleaning services.
D. On January 1, Empire Company paid rent for six months on its office building.
34.Which of the following is
not
considered a basic type of adjusting entry?
A. An entry to convert a liability to a revenue.
B. An entry to accrue unpaid expenses.
C. An entry to convert an asset to an expense.
D. An entry to convert an asset to a liability.
35.Adjusting entries are needed:
A. Whenever revenue is not received in cash.
B. Whenever expenses are not paid in cash.
C. Only to correct errors in the initial recording of business transactions.
D. Whenever transactions affect the revenue or expenses of more than one accounting period.
36.No adjusting entry should consist of:
A. A debit to an expense and a credit to an asset.
B. A debit to an expense and a credit to revenue.
C. A debit to an expense and a credit to a liability.
D. A debit to a liability and a credit to revenue.
37.Which of the following is
not
an example of an adjusting entry?
A. The entry to record unpaid expenses.
B. The entry to record uncollected revenues.
C. The entry to convert liabilities to revenue.
D. The entry to pay outstanding bills.