Question 1

All accounts are listed on the unadjusted trial balance regardless of whether there is a balance or not.

Accepted Answer

A) True 
 B)False

Question 2

The value of the insurance coverage used is recorded as a debit to Insurance Expense.

Accepted Answer

A) True 
 B)False

Question 3

Functional depreciation should be considered in estimating the useful life of computer equipment.

Accepted Answer

A) True 
 B)False

Question 4

A physical inventory is always conducted at the end of each

Accepted Answer

A)   week.
B)   month.
C)   fiscal year.
D)   none of these.E) A) and D)
F) All of the above

Question 5

Estimated federal income tax must be paid in monthly installments.

Accepted Answer

A) True 
 B)False  False

Question 6

Revenue earned in one fiscal period but not received until a later fiscal period is called accrued revenue.

Accepted Answer

A) True 
 B)False

Question 7

The adjustment for unpaid federal income tax includes a(n)

Accepted Answer

A)   expense and a liability account.
B)   expense account only.
C)   expense account and a temporary equity account.
D)   liability account only.E) A) and D)
F) A) and B)

Question 8

The tax rate associated with an income tax bracket is called the effective tax rate.

Accepted Answer

A) True 
 B)False

Question 9

Depreciation expense is calculated using all of the following amounts except

Accepted Answer

A)   fair market value.
B)   estimated salvage value.
C)   estimated useful life.
D)   original cost.E) A) and D)
F) C) and D)

Question 10

Cash and other assets expected to be exchanged for cash or consumed within a year are called liquid assets.

Accepted Answer

A) True 
 B)False

Question 11

The Income Summary account is one of the accounts used to adjust the Merchandise Inventory account at the end of the fiscal period.

Accepted Answer

A) True 
 B)False

Question 12

The book value of a plant asset is its original cost minus accumulated depreciation.

Accepted Answer

A) True 
 B)False  True

Question 13

For a business using the periodic inventory method, the balance of Merchandise Inventory in the unadjusted trial balance represents the beginning balance plus all purchases of merchandise made in the fiscal period.

Accepted Answer

A) True 
 B)False

Question 14

The adjustment unique to merchandising businesses adjusts

Accepted Answer

A)   Accounts Receivable.
B)   Accumulated Depreciation.
C)   Merchandise Inventory.
D)   Prepaid Insurance.E) B) and D)
F) A) and B)

Question 15

For a business using the periodic inventory method, purchases are recorded in the Merchandise Inventory account.

Accepted Answer

A) True 
 B)False

Question 16

Recording depreciation expenses is an application of the accounting concept

Accepted Answer

A)   Accounting Period Cycle.
B)   Adequate Disclosure.
C)   Matching Expenses with Revenue.
D)   Historical Cost.E) C) and D)
F) None of the above

Question 17

The difference between an asset's account balance and its related contra account is called book value.

Accepted Answer

A) True 
 B)False

Question 18

Annual straight-line depreciation expense of a plant asset is calculated as the original cost of the plant asset divided by the years of estimated useful life.

Accepted Answer

A) True 
 B)False

Question 19

A business can use any 12-month period for reporting its financial performance.

Accepted Answer

A) True 
 B)False  True

Question 20

Depreciation expense is recorded on all plant assets.

Accepted Answer

A) True 
 B)False

Exam 15: Adjusting Entries and a Trial Balance

All accounts are listed on the unadjusted trial balance regardless of whether there is a balance or not.

Correct AnswerverifiedShow Answer

The value of the insurance coverage used is recorded as a debit to Insurance Expense.

Correct AnswerverifiedShow Answer

Functional depreciation should be considered in estimating the useful life of computer equipment.

Correct AnswerverifiedShow Answer

A physical inventory is always conducted at the end of each

Correct AnswerverifiedShow Answer

Estimated federal income tax must be paid in monthly installments.

Correct AnswerverifiedFalse

Revenue earned in one fiscal period but not received until a later fiscal period is called accrued revenue.

Correct AnswerverifiedShow Answer

The adjustment for unpaid federal income tax includes a(n)

Correct AnswerverifiedShow Answer

The tax rate associated with an income tax bracket is called the effective tax rate.

Correct AnswerverifiedShow Answer

Depreciation expense is calculated using all of the following amounts except

Correct AnswerverifiedShow Answer

Cash and other assets expected to be exchanged for cash or consumed within a year are called liquid assets.

Correct AnswerverifiedShow Answer

The Income Summary account is one of the accounts used to adjust the Merchandise Inventory account at the end of the fiscal period.

Correct AnswerverifiedShow Answer

The book value of a plant asset is its original cost minus accumulated depreciation.

Correct AnswerverifiedTrue

For a business using the periodic inventory method, the balance of Merchandise Inventory in the unadjusted trial balance represents the beginning balance plus all purchases of merchandise made in the fiscal period.

Correct AnswerverifiedShow Answer

The adjustment unique to merchandising businesses adjusts

Correct AnswerverifiedShow Answer

For a business using the periodic inventory method, purchases are recorded in the Merchandise Inventory account.

Correct AnswerverifiedShow Answer

Recording depreciation expenses is an application of the accounting concept

Correct AnswerverifiedShow Answer

The difference between an asset's account balance and its related contra account is called book value.

Correct AnswerverifiedShow Answer

Annual straight-line depreciation expense of a plant asset is calculated as the original cost of the plant asset divided by the years of estimated useful life.

Correct AnswerverifiedShow Answer

A business can use any 12-month period for reporting its financial performance.

Correct AnswerverifiedTrue

Depreciation expense is recorded on all plant assets.

Correct AnswerverifiedShow Answer

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False

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True

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True

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