Adjusting Entries quiz

Financial Accounting Quiz

On Aug 21, 2024

/10

Adjusting Entries

10 questions in 10 minutes

Pass Score 70%

1 / 10

Adjustments for unearned revenues :

decrease revenues and decrease assets

decrease liabilities and increase revenues

increase assets and increase revenues

have an assets and revenues account relationship

2 / 10

Adjustments for accrued revenues :

have a liabilities and revenues account relationship

decrease assets and revenues

have an assets and revenues account relationship

decrease liabilities and increase revenues

3 / 10

Which of the following statements is incorrect concerning the adjusted trial balance ?

The adjusted trial balance provides the primary basis for the preparation of financial statements

The adjusted trial balance lists the account balances segregated by assets and liabilities

The adjusted trial balance is prepared after the adjusting entries have been journalized and posted

An adjusted trial balance proves the equality of the total debit balances and the total credit balances in the ledger after all adjustments are made

4 / 10

The time period assumption states that :

companies must wait until the calendar year is completed to prepare financial statements

companies record information in the time period in which the events occur

the economic life of a business can be divided into artificial time periods

companies use the fiscal year to report financial information

5 / 10

Adjusting entries are made to ensure that :

All the responses above are correct

balance sheet and income statement accounts have correct balances at the end of an accounting period

expenses are recognized in the period in which they are incurred

revenues are recorded in the period in which services are performed

6 / 10

Which of the following statements about the accrual basis of accounting is false ?

Revenue is recorded only when cash is received,and expense is recorded only when cash is paid

Revenue is recognized in the period in which services are performed

Events that change a company’s financial statements are recorded in the periods in which the events occur

This basis is in accord with generally accepted accounting principles

7 / 10

The principle or assumption dictating that efforts (expenses) be matched with accomplishments (revenues) is the :

revenue recognition principle

expense recognition principle

cost assumption

time period assumption

8 / 10

Accumulated Depreciation is :

a contra asset account

a liability account

an owner’s equity account

an expense account

9 / 10

Adjustments for prepaid expenses :

decrease assets and increase expenses

decrease assets and increase revenues

decrease revenues and increase assets

decrease expenses and increase assets

10 / 10

The revenue recognition principle states that :

expenses should be matched with revenues

the fiscal year should correspond with the calendar year

revenue should be recognized in the accounting period in which a performance obligation is satisfed

the economic life of a business can be divided into artificial time periods

Your score is

Question topics

Adjusting Entries

the accrual basis of accounting

Adjusting entries for deferrals

Adjusting entries for accruals