Adjusting Entries quiz

Financial Accounting Quiz

On Feb 5, 2025

/10

Adjusting Entries

10 questions in 10 minutes

Pass Score 70%

1 / 10

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

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

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

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

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

2 / 10

Adjustments for accrued revenues :

decrease assets and revenues

have an assets and revenues account relationship

decrease liabilities and increase revenues

have a liabilities and revenues account relationship

3 / 10

The time period assumption states that :

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

companies use the fiscal year to report financial information

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

4 / 10

Each of the following is a major type (or category) of adjusting entries except :

accrued revenues

accrued expenses

prepaid expenses

recognized revenues

5 / 10

Adjustments for prepaid expenses :

decrease assets and increase revenues

decrease assets and increase expenses

decrease revenues and increase assets

decrease expenses and increase assets

6 / 10

Which item is a constraint in fnancial accounting ?

Materiality

Comparability

Consistency

Cost

7 / 10

Accumulated Depreciation is :

an expense account

an owner’s equity account

a liability account

a contra asset account

8 / 10

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

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

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

9 / 10

Adjustments for unearned revenues :

increase assets and increase revenues

have an assets and revenues account relationship

decrease liabilities and increase revenues

decrease revenues and decrease assets

10 / 10

The revenue recognition principle states that :

expenses should be matched with revenues

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

the fiscal year should correspond with the calendar year

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

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Question topics

Adjusting Entries

the accrual basis of accounting

Adjusting entries for deferrals

Adjusting entries for accruals