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Exam 12: Accruals, Deferrals, and the Worksheet

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Question 41

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The one account that appears on both the statement of owner's equity and the balance sheet is the ____________________ account.

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Question 42

Multiple Choice

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On January 1, 2014, a firm purchased machinery for $17,000. Depreciation expense for the year ending December 31, 2014, given the straight-line method, a 5-year useful life, and a salvage value of $3,000, is

A) $3,000.
B) $3,400.
C) $2,800.
D) $2,400.

E) None of the above
F) All of the above

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Question 43

Multiple Choice

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The net income for an accounting period can be determined using the worksheet by comparing the balances and determining the difference between the balances in the two

The balance of the Merchandise Inventory account that appears in the Trial Balance section of the worksheet represents the stock of goods on hand at the beginning of the current period.

The debit and credit amounts for the Income Summary account are combined into one number in the Income Statement section of the worksheet.

Complete the table below in accordance with the rules that must be followed to combine amounts in the Adjusted Trial Balance Section of the worksheet. Enter the new balance and whether it is entered as a debit or a credit.

Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. Equipment purchased for $104,000 on January 3, 2014, has an estimated life of 5 years and an estimated salvage value of $9,000. The firm uses the straight-line method of depreciation. Determine the adjustment for the month ended January 31, 2014.

Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. On December 31, 2013, the Notes Payable account had a balance of $12,000. This represented a 3-month, 9 percent note issued on December 1, 2013.

Net income is recorded on the net income line in the ____________________ column of the Balance Sheet section of the worksheet.

On July 1, 2013, a firm purchased a 1-year insurance policy for $1,800 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2013, is

Property, plant, and equipment are ____________________ assets that require end-of-period adjustments for depreciation.

When a count is made of the goods on hand at the end of the period, the quantity of each type of goods in stock is listed on a form called a(n) ____________________.

Design Home Furnishings is a retail store. On December 31, 2014, the firm's general ledger contained the following accounts and balances. Adjustments are shown below. Prepare the Trial Balance section, record the adjustments in the Adjustments section, and complete the worksheet for the year ended December 31, 2014. Round to the nearest whole dollar.

On November 1, 2013, Paige Turner Publishing received $50,400 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, 2013, is

To remove the beginning inventory from the books, the Income Summary account is credited for the amount of the beginning inventory.

On July 31, 2013, after one month of operation, the general ledger of Dakota Consulting contained the following accounts and balances. The firm adjusts losses from uncollectible accounts only at the end of the fiscal year. Monthly adjustments are listed below. Prepare the Trial Balance, Adjustments, and Adjusted Trial Balance sections of a worksheet.

Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. On October 1, 2013, the firm paid a premium of $2,800 in cash for a 1-year insurance policy. On December 31, 2013, coverage for a period of three months had expired.

Match the accounting terms with the description by entering the proper number.

The adjusting entry for uncollectible accounts requires a debit to

Allowance for Doubtful Accounts is