1 An adjusting entry often includes an entry to cash. True False 2 The last four steps...
Question:
1 An adjusting entry often includes an entry to cash.
True False
2 The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. TrueFalse
3 An annual reporting period consisting of any twelve-consecutive months is known as:
Natural business year.
Interim financial period.
Seasonal year. Calendar year.
Fiscal year.
4 On April 1, Santa Fe, Inc. paid Griffith PublishingCompany $1,548 for 36-month subscriptions to several differentmagazines. Santa Fe debited the prepayment to a PrepaidSubscriptions account, and the subscriptions started immediately.What adjusting entry should be made by Santa Fe, Inc. for theadjustment on December 31 of the first year assuming the company isusing a calendar reporting period and no previous adjustments had been made?
Debit Prepaid Subscriptions $516 and credit Subscription Expense$516.
Debit Subscription Expense $516 and credit Prepaid Subscriptions$516.
Debit Unearned Subscriptions $387 and credit SubscriptionExpense $387.
Debit Subscription Expense $387 and credit Prepaid Subscriptions$387.
Debit Subscription Expense $387 and credit Cash $387.
5 In preparing statements from the adjusted trial balance, the balance sheet must be prepared first.
True False
QUESTION 6 Closing entries are required at the end of each accounting period to close all ledger accounts.
True False
QUESTION 7 Two common subgroups for liabilities on a classified balance sheet are:
Current liabilities and long-term liabilities.
Present liabilities and operating liabilities.
Current liabilities and intangible liabilities.
General liabilities and specific liabilities.
Intangible liabilities and long-term liabilities.
QUESTION 8 Which of the following errors would cause the balance Sheet columns of a worksheet to be out of balance?
Entering a liability amount in the Balance Sheet Credit column.
Entering an expense amount in the Balance Sheet Debit column.
Entering a liability amount in the Income Statement Credit column.
Entering a revenue amount in the Balance Sheet Debit column.
Entering an asset amount in the Income Statement Debit column.
QUESTION 9 Adjusting entries are made after the preparation of financial statements.
True False
QUESTION 10 On July 1 Plum Co. paid $7,500 cash for management services to be performed over a two-year period. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Plum should record:
A credit to a prepaid expense and a debit to Cash for$7,500.
A debit to Cash for $7,500 and a credit to an expense for$7,500.
A debit to an expense and credit to a prepaid expense for$7,500.
A debit to an expense and credit to Cash for $7,500.
A debit to a prepaid expense and a credit to Cash for$7,500.
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina