Intermediate Accounting Reporting and Analysis 2017 Update 2nd Edition James M Wahlen Jefferson P Jones Donald P Pagach- Test Bank

 

To Purchase this Complete Test Bank with Answers Click the link Below

 

https://tbzuiqe.com/product/intermediate-accounting-reporting-and-analysis-2017-update-2nd-edition-james-m-wahlen-jefferson-p-jones-donald-p-pagach-test-bank/

 

If face any problem or Further information contact us At tbzuiqe@gmail.com

 

 

Sample Test

TB_Ch03_Wahlen_Intermediate_2e_Update     1. The primary purpose of an accounting system is to record, organize. summarize, and report useful information to external financial statement users and stakeholders, as well as to company management, who make operating, investing and financing decisions.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

2. The another interpretation of the accounting equation is Assets = Liabilities + Contributed Capital + Beginning Retained Earnings + Net Income – Dividends + Beginning Accumulated Other Comprehensive Income + Other Comprehensive Income.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

3. The accounting cycle followed each period by a company includes recording transactions, storing the data, organizing the information, summarizing the events and arrangements, adjusting the accounts, reporting the accounting information in financial statements, and then closing the books.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.2 – LO: 3.2 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

4. The last step in the accounting cycle is to prepare the financial statements.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.2 – LO: 3.2 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

5. An advantage of using the general journal is to prevent errors.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.3 – LO: 3.3 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

6. The general journal has all journal entry transactions listed by account title.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.3 – LO: 3.3 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

7. The trial balance does help find some errors but it will not identify errors resulting from transactions that have not been posted or transactions that were posted twice.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

8. If the trial balance does not balance, the preparer should check to see if the difference is evenly divisible by 9.  If so there may be a transposition.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

9. Deferrals are transactions, events, or arrangements in which the cash flows occur after the related expenses are incurred or revenues earned.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

10. In order to prepare the financial statements, the ending balance in each account in the ledger is recomputed to ensure all effects of the adjusting entries have been captured.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.6 – LO: 3.6 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

11. When preparing the financial statements the adjusted trial balance is prepared listing all the accounts and associated balances after the closing entries.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.6 – LO: 3.6 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

12. The purpose of closing entries is to reduce the balance in the temporary (periodic) accounts to zero and to update the Retained Earnings account.   a. True   b. False         ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.7 – LO: 3.7 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

13. Net sales are computed as sales minus sales returns and allowances and purchase discounts.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.7 – LO: 3.7 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

14. The worksheet is not a substitute for accounting records or financial statements but it is a helpful tool for external users to use in order to see the detailed information behind the statements.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.8 – LO: 3.8 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

15. The worksheet is an internal tool that assists with the preparation of the adjusting entries and the financial statements.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.8 – LO: 3.8 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

16. Reversing entries should be made for any adjusting entry that adjusts the ending balance of an existing balance sheet account.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.9 – LO: 3.9 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

17. Although optional, a reversing entry is usually made for adjusting entries that accrue expenses to be paid in the next accounting period.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.9 – LO: 3.9 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

18. Companies create subsidiary ledgers to divide accounting tasks and to reduce the size of the general ledger, while keeping up-to-date records of customers and suppliers. This process is also used to minimize errors in recording transactions.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

19. Special journals are used to divide accounting tasks, minimize errors, and to keep up-to-date records of customers and suppliers.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

20. The adjustment to convert cash-basis collections from customers to accrual-basis revenue earned requires adding the ending balance in accounts receivable and subtracting the beginning balance in accounts receivable.   a. True   b. False     ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.10 – LO: 3.11 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

21. The adjustment necessary to convert cash-basis payments for other operating costs to accrual-basis operating expenses requires the addition of ending prepaid expenses to the beginning prepaid expenses, subtracting the beginning accrued expenses from this amount, and finally adding the ending accrued expenses.   a. True   b. False     ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.10 – LO: 3.11 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

22. The accounting equation can be expressed as   a. Assets = Liabilities – Shareholders’ Equity   b. Assets + Liabilities = Shareholders’ Equity   c. Assets – Liabilities = Shareholders’ Equity   d. Assets + Shareholders’ Equity = Liabilities     ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

23. Which of the following rules is incorrect?   a. The accounting equation must always remain in balance.   b. Asset accounts are increased by debit entries and decreased by credit entries.   c. Expense accounts normally have debit balances.   d. Common stock accounts are increased by debit entries and decreased by credit entries.     ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding

 

 

 

24. Which T-account is incorrect?   a.   b.   c.   d.     ANSWER:     d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

25. Which accounts are increased by using debits?   a. Cost of Goods Sold, Common Stock, Assets   b. Dividends, Revenue, Liabilities   c. Assets, Cost of Goods Sold, Expenses   d. Liabilities, Capital Stock, Revenue     ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

26. Which of the following is a permanent account?   a. Dividend Revenue   b. Allowance for Doubtful Accounts   c. Interest Expense   d. Sales Revenue     ANSWER:   b POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

27. Which of the following is not a component of an accounting system?   a. the input source documents   b. the framework for operation of the system   c. the output reports   d. All of the answer choices are components of an accounting system.     ANSWER:   d POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

28. Which of the following is a temporary account?   a. Retained Earnings   b. Accounts Receivable   c. Purchases Returns and Allowances   d. Accumulated Depreciation     ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding

 

 

 

29. In terms of debits and credits, which types of accounts have the same (debit or credit) normal balances?   a. dividends, expenses, assets   b. assets, capital stock, revenues   c. retained earnings, dividends, liabilities   d. expenses, liabilities, capital stock     ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

30. Information related to the Berkley Company for the calendar year 2015 follows: Liabilities, December 31, 2015 $400 Assets, December 31, 2015 700 Dividends distributed during 2015 90 Liabilities, December 31, 2014 250 Assets, December 31, 2014 350 ​ Assuming no capital stock was issued during 2015, the net income earned by the Berkley Company during 2015 was   a. $110   b. $200   c. $260   d. $290         ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.1 – LO: 3.1 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

 

 

31. Which of the following is the third major step in the accounting cycle?   a. prepare the financial statements   b. record the daily transactions in a journal   c. prepare and post adjusting entries   d. post the journal entries to the accounts in the ledger     ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.2 – LO: 3.2 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

32. Which of the following is not a major step necessary to complete the accounting cycle?   a. Prepare and post-closing entries   b. Prepare the adjusted trial balance   c. Prepare adjusting entries   d. Record the transactions, events, and arrangements         ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.2 – LO: 3.2 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding

 

33. Which of the following is a major step in completing the accounting cycle?   a. Prepare financial statements   b. Record transactions, events, and arrangements   c. Prepare adjusting entries   d. All of these answer choices are correct.     ANSWER:   d POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.2 – LO: 3.2 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

34. The accounting cycle is a series of steps that process the accounting information contained in its transactions, events, and arrangements. What are the steps involved in this task?   a. Record, organize, close, report   b. Organize, record, report, analyze   c. Record, organize, summarize, report   d. Analyze, prepare, record, report     ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.2 – LO: 3.2 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding

 

35. When you prepare a journal entry, the standard format is to list all   a. asset accounts first.   b. accounts to be debited first.   c. liability accounts first.   d. accounts to be credited first.     ANSWER:   b POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.3 – LO: 3.3 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

36. Which of the following is true regarding the general journal?   a. It keeps up to date records of all customers and suppliers.   b. It helps divide up accounting tasks.   c. It helps prevent errors.   d. It helps control the spending of the organization.     ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.3 – LO: 3.3 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

37. Which of the following errors will be detected by a trial balance?   a. posting a credit to Sales instead of to Accounts Payable   b. incorrectly computing the balance of the cash account   c. failure to journalize a sales transaction at all   d. forgetting to post a purchase transaction at all     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

38. The basic purpose of a trial balance is to   a. list all of the accounts in the general ledger.   b. list all of the accounts in the general ledger that have a balance.   c. be sure that all journal entries have been recorded.   d. verify that the total credits equal the total debits.     ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

39. What relationship exists between the general journal and the general ledger?   a. The general ledger accounts contain the same information as those in the general journal, but it is just in a different format.   b. The balances in the general ledger will always equal those in the general journal.   c. After all postings from the general journal are complete, the debit balances in the general ledger will rarely equal the credit balances.   d. The number of accounts in the general journal will always be larger than the number of accounts in the general ledger.     ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

40. The entire group of accounts for a company is referred to as the   a. general ledger.   b. worksheet.   c. journal.   d. document of original entry.     ANSWER:   a POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

41. An example of a transposition is   a. presenting the cash account at $1,500 instead of $15,000.   b. presenting prepaid insurance at $920 instead of $290.   c. incorrectly posting a credit amount as a debit amount in the general ledger.   d. not journalizing a sales transaction at all.     ANSWER:   b POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

42. If the trial balance does not balance and the difference between debits and credits is evenly divisible by 9, there is a good chance that   a. a transaction has not been recorded.   b. a transaction has been journalized to the wrong account.   c. a transposition or a slide has occurred.   d. only one side of the transaction has been recorded.     ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

43. A trial balance does not identify all types of errors. Which of the following are errors that are not identified using the trial balance?   a. incorrectly recording the transaction amount, but the debits still equal the credits   b. incorrectly posting part of a journal entry to the wrong account   c. not recording a transaction   d. All of these answer choices represent errors that are not identified using the trial balance.     ANSWER:   d POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

44. Posting is the procedure of transferring information from the   a. journal to the ledger   b. trial balance to the worksheet   c. ledger to the journal   d. worksheet to the financial statements     ANSWER:   a POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

45. Which of the following errors is not identified by using the trial balance?   a. an unposted transaction   b. a transposition   c. a slide   d. recording a debit amount that differs from the credit amount recorded         ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.4 – LO: 3.4 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding

 

 

 

46. A prepaid expense is   a. a payment received by the company in advance for the future sale of inventory or performance of services   b. an item of goods or services purchased by the company for use in its operations but not fully consumed by the end of the accounting period   c. an expense that has been incurred during the accounting period but has been neither paid nor recorded   d. an item that has been earned by the company during the accounting period but has been neither received nor recorded     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

47. Which of the following is an economic resource that should be depreciated over the accounting periods estimated to be benefited?   a. salaries incurred but unpaid at year-end   b. rent collected in advance for a three-year rental period   c. equipment purchased for use in the business operations   d. interest revenue accrued on investment in bonds     ANSWER:   c POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

48. Adjusting journal entries are made   a. at the beginning of the accounting period   b. at the end of the accounting period   c. when revenue is realized (or realizable)   d. anytime we need to adjust an account     ANSWER:   b POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

49. The Oliver Construction Company received $18,000 for six months rental income in advance on November 1, 2015, and credited the Rental Revenue account. The required adjusting entry on December 31, 2015, would include a   a. credit to Rental Revenue for $6,000   b. debit to Rental Revenue for $12,000   c. credit to Rental Receivable for $12,000   d. debit to Rental Revenue for $6,000     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Understanding

 

50. Which of the following adjusting entries involves the recognition of an accrued expense?   a. recording depreciation on a long-lived asset   b. writing off the portion of an insurance policy that has expired   c. recognition of salaries owed to employees for work done during the current period that will be paid during the next accounting period   d. recognition of bad debt losses that are expected to result from making sales on credit terms     ANSWER:   c POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Analyzing

 

 

 

51. On March 31, 2015, the Turi Company purchased a two-year fire insurance policy. Turi recorded the purchase by debiting Prepaid Insurance and crediting Cash for $10,000. Which of the following adjusting entries should Turi prepare at the end of 2015?   a. Prepaid Insurance 3,750 Insurance Expense 3,750   b. Insurance Expense 3,750 Prepaid Insurance 3,750   c. Prepaid Insurance 5,500 Insurance Expense 5,500   d. Insurance Expense 5,000 Prepaid Insurance 5,000     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

52. Adjusting entries are made   a. to match the consumption of prepaid assets against current revenues.   b. to record accrued expenses.   c. to record estimated items, such as depreciation.   d. for all of these reasons.     ANSWER:   d POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

53. On April 1, 2015, Miller Company paid $6,280 for a two-year insurance policy. On that date, Miller recorded the purchase by debiting Prepaid Insurance and crediting Cash. The correct December 31, 2015, adjusting entry would be   a. Prepaid Insurance 3,140 Insurance Expense 3,140   b. Insurance Expense 2,355 Prepaid Insurance 2,355   c. Prepaid Insurance 2,355 Insurance Expense 2,355   d. Insurance Expense 3,925 Prepaid Insurance 3,925     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Analyzing

 

54. On August 1, 2015, Yellow Company paid $6,320 for a three-year insurance policy. On that date, an expense account was charged. In the adjusting entry on December 31, 2015, there would be a   a. debit to Insurance Expense for $175.   b. credit to Prepaid Insurance for $2,107.   c. credit to Prepaid Insurance for $527.   d. credit to Insurance Expense for $5,442.     ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

 

 

55. On June 1, 2015, Little Corporation received $5,320 in advance for a two-year rental of some land and properly credited Unearned Rent. In the adjusting entry at December 31, 2015, there would be a   a. debit to Unearned Rent for $1,108   b. credit to Rent Revenue for $1,552   c. credit to Unearned Rent for $1,552   d. debit to Unearned Rent for $5,320     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

56. On February 1, 2015, Apollo Company received $24,000 in advance for a three-year rental of land, and credited Rent Revenue for the entire amount. The correct December 31, 2015 adjusting entry would be   a. Unearned Rent 16,667 Rent Revenue 16,667   b. Rent Revenue 16,667 Unearned Rent 16,667   c. Unearned Rent 7,333 Rent Revenue 7,333   d. Rent Revenue7,333 Unearned Rent 7,333     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

 

 

57. On May 1, 2015, Alang Corporation borrowed $3,600 on a two-year, 6% note payable. Interest is due and payable at the end of each six months. Alang makes all interest payments on schedule. The correct December 31, 2016, adjusting entry would be   a. ​Interest Expense          36 Interest Payable             36 ​   b. ​Interest Payable         144 Cash                            144 ​   c. ​Interest Expense         108 Cash                            108 ​   d. ​Interest Expense         144 Interest Payable            144 ​   ANSWER:   a POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPORG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Measurement KEYWORDS:   Bloom’s: Analyzing

 

58. Which of the following is an accrued expense?   a. depreciation   b. employees’ salaries   c. interest revenue   d. rental expense paid three months in advance     ANSWER:   b POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Remembering

 

 

 

59. An accrued expense is an expense   a. incurred but neither paid nor recorded.   b. incurred, paid, and recorded.   c. paid and recorded but not incurred.   d. whose amount is subject to estimation.     ANSWER:   a POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding

 

60. When cash is debited for rents that are collected but are not yet earned, the amount credited should be   a. recognized as revenue when collected.   b. presented as a liability until earned.   c. recorded as an asset until earned.   d. presented as a separate item in shareholders’ equity.     ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   ACCT.WHAL.16.3.5 – LO: 3.5 NATIONAL STANDARDS:   United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic LOCAL STANDARDS:   United States – OH – Default City – AICPA: FN-Decision Modeling KEYWORDS:   Bloom’s: Understanding