1) In recording the adjusting entry for accrued taxes, both accounts involved are increased.True False2)Adjusting entries are sometimes referred to as correcting entries.True False3) Most companies use the cash basis of accounting because it matches revenues and expenses better during the accounting period. True False4) A net income occurs when there are more revenues than expenses. True Flase5) As Equipment is depreciated, its net book value decreases and its accumulated depreciation increases. True False6) If an entire adjusting entry for accrued payroll is omitted, then, the Adjusted Trial Balance will not balance. True False7) The beginning balance of Office Supplies is $475.00, and $2,000.00 was purchased for the period. If ending inventory balance of Office Supplies is $2,000.00, the amount of Office Supplies used is $475.00. True False8) The expiration of the usefulness of a Plant Asset during an accounting period is called depreciation. True False9) Deferred Revenues are revenues already earned but not yet received. True False10) Accrued Expenses are expenses already incurred but not yet paid.True False11) Which of the following is not a financial statement?Balance SheetIncome StatementCash Flow StatementTrial BalanceProfit & Loss Statement12) Journal entries are recorded in QuickBooks by selecting:Tasks, Accountant & Taxes, Make Journal EntryReports, Company & Financial, Make Journal EntryCompany, Make Journal EntryReports, Lists, Make Journal Entry File, Company, Make Journal Entry13) Adjusting entries are made at the end of the accounting period to:Check the total debits and total creditsBring the account balances up to dateProve the equality of the financial statementsBring the Chart of Accounts up to dateCorrect erroneous entries made during the period14) The Accumulated Depreciation account is not a:contra accountdebit balance accountcredit balance accountcontra asset accountnone of the above15) The adjusting entry to record accrued interest expense will include a:debit to Interest Expensecredit to Interest Expensedebit to Interest Payabledebit to Interest Receivablecredit to Interest Receivable16) If the balance in the Prepaid Insurance account at the beginning of the year is $3,600.00 representing three (3) years of insurance premium, the adjusting entry at the end of the first year will include a:debit to Prepaid Insurance for $1,200.00credit to Prepaid Insurance for $1,200.00debit to Insurance Expense for $2,400.00credit to Insurance Expense for $2,400.00debit to Insurance Expense for $3,600.0017) A company pays its employees salaries every Friday, $5,000.00 with daily equal earnings, and Dec. 31 fell on a Thursday. The adjusting entry will include a:debit to Salaries Expense for $5,000.00credit to Salaries Expense for $4,000.00debit to Salaries Payable for $4,000.00credit to Salaries Expense for $5,000.00debit to Salaries Expense for $4,000.0018) The Balance Sheet shows:Assets, Liabilities, ExpensesRevenues, Expenses, Net Income or Net LossLiabilities, Owner’s Equity, AssetsAssets, Liabilities, Owner’s Equity, RevenuesOwner’s Equity, Expenses, Drawing, Revenues19) The Profit and Loss Statement shows:Expenses, Revenues, Net Income or Net LossAssets, Liabilities, Owner’s EquityLiabilities, Assets, Revenues, Net Income or Net LossOwner’s Equity, Expenses, LiabilitiesDrawing, Revenues, Expenses, Net Income or Net Loss20) If an accountant fails to record an entire adjusting entry for expired insurance, the omission will cause:total assets to be understatedtotal liabilities to be understatedtotal expenses to be overstatedtotal revenue to be understatedtotal assets to be overstated
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