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If a company uses the periodic inventory system, purchases of merchandise are
 
debited to Purchases
credited to Merchandise Inventory.
debited to Merchandise Inventory.
credited to Sales.
   
If an account has a debit balance of $2,000 in the Trial Balance section of a worksheet and there is a credit of $600 in the Adjustments section,
the account balance in the Adjusted Trial Balance section of the worksheet is a
 
$1,400 debit
$2,600 debit.
$1,400 credit.
$600 credit.
   
An adjusting entry is usually not required for a revenue item when it is
 
earned, recorded and paid for by the customer in one period
budgeted, paid for, and partially earned in one period but not fully earned until a later period.
paid for by the customer and recorded in one period but not fully earned until a later period.
earned in one period but not paid for by the customer or recorded until a later period.
   
Which of the following statements is correct?
 
Income that has been earned but not yet received is called accrued income.
Unearned Subscription Income is a liability account.
Under the accrual basis of accounting, revenue is recognized and recorded in the period when it is earned regardless
of when cash related to the transaction is received.
 
All of these statements are correct
   
On the financial statements prepared at the end of an accounting period, the merchandise inventory is shown as
 
an asset on the balance sheet
revenue on the income statement.
a liability on the balance sheet.
an addition to capital on the statement of owner's equity.
   
On Oct 1, 2019, a firm purchased a 1-year insurance policy for $2,400 and paid the full premium in advance.
The adjustment needed on December 31, 2019, to report the amount of insurance that had expired, would be:
 
a debit to Prepaid Insurance for $600 and a credit to Insurance Expense for $600.
a debit to Insurance Expense for $600 and a credit to Prepaid Insurance for $600.
a debit to Insurance Expense for $2,400 and a credit to Cash for $2,400
a debit to Insurance Expense for $1,800 and a credit to Prepaid Insurance for $1,800.
   
If an account has a credit balance of $2,200 in the Trial Balance section of a worksheet and there is a credit of $400 in the Adjustments section,
the account balance in the Adjusted Trial Balance section of the worksheet is
 
$2,600 debit.
$1,800 debit.
$2,600 credit
$1,800 credit.
   
After the two adjusting entries for merchandise inventory for Marley Motorcycles have been entered on the worksheet,
the Income Summary account in the Adjusted Trial Balance section has a debit of $65,000 and a credit of $73,000.
The amount of merchandise inventory at the beginning of the year is:
 
$73,000
$65,000.
$138,000.
$8,000.
   
Accrued expenses are
 
paid for in one period but not fully used until a later period.
paid for, recorded, and used in one period.
used in one period but not paid for until a later period
budgeted but not paid for or used during the period.
   
With the accrual basis of accounting, revenue from a credit sale is recognized
 
on the date the account is collected in full.
on the date of the sale
each time a payment on an account balance is received.
either on the date of the sale or when the amount of the sale is collected
   
Stan Still Stationery Store's employees are paid every Friday for a five day work week and are paid a total of $1,625 per day.
If December 31, 2019, is on a Tuesday, the amount of the adjusting entry for accrued wages is:
 
$1,625
$4,875
$3,250
$8,125
   
Hugh Morris Company pays weekly wages of $15,000 every Friday for a five day week ending on that day.
If the last day of the year is on Tuesday, the adjusting entry to record the accrued wages is:
 
debit Wages Expense $6,000; credit Wages Payable $6,000
debit Wages Expense $15,000; credit Cash $15,000
debit Wages Expense $9,000; credit Wages Payable $9,000
debit Wages Expense $6,000; credit Drawing $6,000
   
If an account has a debit balance of $1,600 in the Trial Balance section of a worksheet and there is a debit of $300 in the Adjustments section,
the account balance in the Adjusted Trial Balance section of the worksheet is a
 
$1,300 debit.
$1,900 debit
$1,300 credit.
$1,900 credit.
   
After the two adjusting entries for merchandise inventory for Marley Motorcycles have been entered on the worksheet,
the Income Summary account in the Adjusted Trial Balance section has a debit of $65,000 and a credit of $73,000.
The amount of merchandise inventory at the end of the year is:
 
$73,000
$65,000.
$138,000.
$8,000.
   
On October 1, 2019, Paige Turner Publishing received $5,400 in cash for subscriptions covering one year,
recording the entry as a debit to Cash and a credit to Unearned Subscriptions. The correct adjusting entry at December 31, 2019, is
 
Debit Subscriptions Income $1,350; credit Unearned Subscriptions $1,350.
Debit Unearned Subscriptions $5,400; credit Subscriptions Income $5,400
Debit Unearned Subscriptions $1,350; credit Subscriptions Income $1,350.
Debit Unearned Subscriptions $450; credit Subscriptions Income $450.
   
On December 1, 2019, a firm accepted a 6-month, 12 percent note for $10,000 from a customer.
The adjusting entry on December 31 to record the interest earned on the note is:
 
a debit to Interest Receivable for $100 and a credit to Interest Income for $100
a debit to Interest Income for $100 and a credit to Interest Receivable for $100.
a debit to Interest Receivable for $600 and a credit to Interest Income for $600.
a debit to Interest Receivable for $1,200 and a credit to Interest Income for $1,200.
   
On April 1, 2019, a firm accepted a 6-month, 10 percent note for $1,800 from a customer with an overdue balance.
The accrued interest recorded for this note for the year ended June 30, 2019, is
 
$15.
$45
$90.
$180.
   
After both of the entries for the inventory adjustment have been posted, the debit in the Income Summary account represents:
 
Net Income
Cost of Goods Sold
Ending Inventory
Beginning Inventory
   
The trial balance of Premier Lighting Co. shows Merchandise Inventory of $35,000. The company uses the periodic inventory system.
Based on a count taken on December 31, merchandise inventory at the end of the year actually totaled $28,000.
The adjusting entry to remove the old merchandise inventory balance would be:
 
a debit to Income Summary of $28,000 and a credit to Merchandise Inventory for $28,000.
a debit to Merchandise Inventory of $28,000 and a credit to Income Summary for $28,000.
a debit to Purchases of $35,000 and a credit to Merchandise Inventory for $35,000.
a debit to Income Summary of $35,000 and a credit to Merchandise Inventory for $35,000...
   
A system of accounting by which all Revenues and Expenses are matched and reported on financial statements for the applicable period,
regardless of when the cash related to the transaction is received or paid.
 
Accrual Basis
  Accrued Income
Income that has been earned but not yet received and recorded.
 
Deferred Expense
Also known as Prepaid Expense, which are expenses that have been paid for and recorded before they are used.
 
Deferred Income
Also known as Unearned Income, which exists when cash is received before income is earned. Under the Accrual Basis of accounting, only income that has been earned appears on the Income Statement.
   
Expense items that relate to the current period but have not yet been paid and do not yet appear in the accounting record.
 
Accrued Expenses
   
Where on the Worksheet are the Updated Account Balances stated?
 
The amounts entered under the Adjusted Trail Balance.
   
In Zog's Company's December 31 Trial Balance, a credit balance of $31,500 appears in Uncleared Fee Income.
This amount represents cash received from a customer on November 1st, covering work to be preformed by Zog in November
through January. At December 31st, Zog had earned $10,500 of the amount received on November 1st. What account will be
debited and what account will be credited in the Adjusting Entry on December 31st and what is the amount of the Adjustment?
 
Debit $10,500 to Unearned Fee Income Account
Credit $10,500 to Fee Income Account.

31,500 / 3 = 10,500
   
Zog Company Adjusts and Closes its accounts and prepares financial statements each month.
In the Dec.31st Trail Balance column for debit balances, a balance of $9,000 is found in the Prepaid Rent account.
A payment of $18,000 for prepayment of 6months rent was made Sept.1st.
What is the amount of the Adjusting Entry for this item and what account would be debited and credited in the Dec.31st Adjustments?
 
$3,000
 
18,000 / 6
   
A form used to list the quantity and type of goods the firm has in stock.
 
Inventory Sheet
   
The Worksheet line immediately following the column totals on which Net Income (or net loss) is recorded in two places; the Income Statement section and the Balance Sheet section.
 
Net Income Line
   
Long-term Assets that are used in the operation of a business and that are subject to depreciation.
 
Property, Plant, and Equipment
   
In the Adjusting Entry for Depreciation, is the Depreciation Expense Account increased or decreased?
Is the Book Value of the Asset being depreciated increased or decreased?
 
The Depreciation Expense Account is increased, and the Book Value of the Asset is decreased.
   
On July 1st 2019 a landlord received $36,000 cash from a tenant covering rent from that date through June 30th 2020.
The payment was credited to Rent Income. Assuming no entry has been made in the Income Account since receipt of the
payment, what would be the Adjusting Entry on Dec.31st 2019?
 
Rent Income will be debited for $18,000
Uncleared Rent Income will be credited for $18,000.

36,000 / 12 = 3,000
3,000 x 6 = 18,000
   
In its Dec.31st 2019 financial reports, Wet Seal Company's accountant made two errors: 1) Failed to record interest of $600 accrued on
a Note Payable. and 2) Failed to record interest of $1,600 accrued on a Note Receivable. What is the Net effect of these two errors on
Assets, on Liabilities, on Expenses, on Income, and on Owners Equity?
 
Assets are understated by $1,600
Liabilities are understated by $600
Expenses are understated by $600
Income is understated by $1,600
Owners Equity is understated by $1,000.
   
A completed Worksheet for Staples Company on Dec.31st 2019, showed a total of $930,000 in the debit column of the Income
Statement section and a total credit of $902,000 in the credit column.
Does this represent a profit or a loss for the year and how much?
 
A loss of $28,000.

902,00 - 930,000 = -28,000
   
What account is debited and what account is credited to accrue interest on Notes Payable?
 
Debit column of Income Statement section.
   
During the year, a company had net credit sales of $100,000; past experience indicates that 1% of these sales, or $1,000, should result in
uncollectible accounts. The entry to record this adjustment will include a credit to the _________ account in the amount of $1,000
 
Allowance for doubtful accounts
   
A company has identified that Slow Delivery Inc.'s accounts receivable balance of $100 is unlikely to be collected.
The company will write-off Slow Delivery's balance due against the _________ account.
 
Allowance for doubtful accounts
   
Why does an error in the amount of an adjusting entry usually affect at least 2 accounting periods?
 
If the revenue or expense is not assigned to the correct period, it is assigned to an incorrect period, meaning both periods are incorrectly stated.
   
On July 1st, 2019, a landlord received $36,000 cash from a tenant, covering rent from July 1st 2019 - June 30th 2020.
The payment received was credited to Unearned Rent Income. Assuming no entry has been made in the Uncleared Rent Income Account
since the payment was received, what would the Adjusting Entry be on Dec.31st 2019?
 
Unearned Rent Income will be debited for $18,000
Rent Income will be credited for $18,000.

36,000 / 12months = 3,000
3000 x 6 = 18,000
   
The Allowance for Doubtful Accounts account has a normal (debit/credit) _________ balance
 
Credit
   
Uncollectable accounts are reported in the same period as the sale under what principle?
 
Matching
   
During the year, a company had net credit sales of $100,000; past experience indicates that 1% of these sales, or $1,000, should result in uncollectible accounts.
The entry to record this adjustment will include a credit to the ______ account in the amount of $1,000.
 
allowance for doubtful accounts
   
A form used to list the volume and type of goods a firm has in stock is called a(n) _________
 
Inventory sheet
   
Expense items that relate to the current period but have not yet been paid and do not yet appear in the accounting records are known as _________ expenses.
 
Accrued
   
Merchandise Inventory, before adjustment, has a balance of $2,000. The newly counted inventory balance is $3,200.
The journal entry to adjust for inventory, and insert the new balance, will include which of the following entries:
 
Debit to merchandise inventory for $3,200
Credit to income summary for $3,200
   
On December 31, a company determines that accrued employer payroll taxes include $100 of social security tax and $20 of Medicare tax.
The entry to record this adjustment will include a debit to the _________ account.
 
Payroll taxes expense
   
Based on an inventory count, the _________ inventory is debited to Merchandise Inventory and credited to Income Summary
 
Ending balance
   
Income received before it is earned is called______ income
 
deferred
   
When calculating the Adjusted Trial Balance of a worksheet, a $1,000 debit balance in the Trial Balance column and a $800 debit balance in the
Adjustments Column would equal a $_________, ____________ balance in the adjusted trial balance column
 
1800; debit
   
Notes Payable will appear in which section of the worksheet:
 
balance sheet
   
Identify which of the following accounts will appear in the Balance Sheet column of the worksheet:
 
office equipment
accounts payable
cash
prepaid insurance
merchandise inventory
   
When calculating the Adjusted Trial Balance of a worksheet, a $1,000 debit balance in the Trial Balance column and a $800
debit balance in the Adjustments Column would equal a $__________, __________.
 
$1800, debit
   
Prepaid Interest will appear in which section of the worksheet:
 
balance sheet
   
Expenses that are paid for and recorded before they are used, such as rent or insurance, are called_____ expenses
 
deferred or prepaid
   
Green Landscaping is completing work for a contract client that is billed when work is completed. At the year-end, Green had completed $250
of landscaping services that were unbilled and unrecorded. The entry to record this adjustment will include which of the following entries:
(Check all that apply).
 
a credit to service fees earned
a debit to accounts receivable
 
   
On December 31, a company determines that accrued employer payroll taxes include $100 of social security tax and $20 of Medicare tax.
The entry to record this adjustment will include a debit to the _______ account.
 
payroll taxes expense
   
The Income Statement section of a worksheet shows total debits of $10,000 and total credits of $12,000. Net income (loss) is:
 
$2,000
   
Merchandise inventory, before adjustment, has a balance of $2,000. The newly counted inventory balance is $3,200.
The journal entry to adjust for inventory, and insert the new balance, will include which of the following entries:
 
Debit to merchandise inventory for $3,200
Credit to income summary for $3,200
   
When calculating the Adjusted Trial Balance of a worksheet, a $300 debit balance in the Trial Balance column and a $700 credit balance in
 the Adjustments Column would equal a $______ (debit/credit) _______ balance in the Adjusted Trial Balance column.
 
$400; Credit
   
First Rate Bookkeeping is completing work for a contract client that is billed when work is completed. At the year-end, First Rate had completed $500 of
bookkeeping services that were unbilled and unrecorded. The entry to record this adjustment will include a debit to the ___________ account in the amount of $500.
 
accounts receivable
   
When calculating the Adjusted Trial Balance of a worksheet, a $500 debit balance in the Trial Balance column and a $200 credit balance
in the Adjustments Column would equal a $______ (debit/credit) _______ balance in the Adjusted Trial Balance column.
 
300, debit
   
The goal of the _________ basis of accounting is to match revenues and expenses for the applicable period, regardless of when
the cash related to the transaction is received or paid
 
Accrual
   
A company had collected $3,000 in advance for services to be provided throughout the year. At December 31, an analysis of the Unearned
Services Revenue account showed that one-third of the services were earned during the year.
The entry to record this adjustment will include which of the following entries:
 
A credit to Services Revenue in the amount of $1,000
A debit to Unearned Services Revenue in the amount of $1,000
   
During the year, a company had net credit sales of $80,000; past experience indicates that 1% of these sales, or $800, should result
in uncollectible accounts. The entry to record this adjustment will include which of the following entries:
 
a credit to allowance for doubtful accounts
a debit to uncollectible accounts expense
   
Expense items that relate to the current period but have not yet been paid and do not yet appear in the accounting records are known as________ expenses
 
Accrued
   
At December 31, a company's accounting records showed a balance in the Supplies account of $500. A physical count showed $200 of supplies on hand.
The adjusting entry to record $300 supplies used during the year will include a debit to which account:
 
supplies expense
   
The income statement section of a worksheet shows total debits of $10,000 and total credits of $12,000. Net income (loss) is:
 
$2000
   
At December 31, a company's accounting records showed a balance in the Supplies account of $400. A physical count showed $100 of supplies on hand.
The adjusting entry will include a (debit/credit) ________ to the Supplies Expense account in the amount of $___________.
 
Debit; $300
   
A company had collected $5,000 in advance for services to be provided throughout the year. At December 31, an analysis of the
Unearned Services Revenue account showed that half of the services were earned during the year. The entry to record this
adjustment will include a debit to the ________ account in the amount of $2,500
 
unearned services revenue
   
On December 31, a company determines that $500 in salaries expense has not yet been recorded because the employees will not be paid
until January 3. The adjustment will include a credit to the _______ account in the amount of $500.
 
salaries payable
   
Expenses that are paid for and recorded before they are used, such as rent or insurance, are called _______ expenses.
 
Deferred
   
At December 31, a company's accounting records showed a balance in the Supplies account of $800. A physical count showed $300 of supplies on hand.
The adjusting entry to record $500 supplies used during the year will include a credit to which account:
 
supplies
   
During the year, a company had net credit sales of $100,000; past experience indicates that 0.5 percent of these sales, or $500, should result
in uncollectible accounts. The entry to record this adjustment will include a debit to the ___________ account in the amount of $500
 
uncollectible accounts expense