{"id":2535,"date":"2020-10-30T11:13:50","date_gmt":"2020-10-30T11:13:50","guid":{"rendered":"http:\/\/onlineclassesguru.com\/?p=2535"},"modified":"2020-10-30T11:13:50","modified_gmt":"2020-10-30T11:13:50","slug":"accounting-revenue-depreciation-income-questions","status":"publish","type":"post","link":"https:\/\/onlineclassesguru.com\/index.php\/2020\/10\/30\/accounting-revenue-depreciation-income-questions\/","title":{"rendered":"Accounting Revenue Depreciation &#038; Income Questions"},"content":{"rendered":"<style type=\"text\/css\"><\/style><p>True\/False (12 points, 1 point each)<br \/>\n1. Net income results when expenses exceed revenues. ____ ____<br \/>\n2. One application of accrual accounting is adjusting the accounts. ___ ____<br \/>\n3. Accrual accounting recognizes revenues and expenses at the point that cash changes hands.<br \/>\n_____ _____<br \/>\n4. Depreciation Expense\u2013Equipment is an example of a contra account. ___ ___<br \/>\n5. In the accounting cycle, closing entries are prepared before adjusting entries. ____ ___<br \/>\n6. Temporary account balances are reduced to zero by closing entries. ____ ____<br \/>\n7. Accounts Receivable is closed to Income Summary as part of the closing process. ____ ___<br \/>\n8. Supplies Expense is a temporary account. ____ _____<\/p>\n<p>9. After all closing entries have been recorded, the balance of the Income Summary account will be<br \/>\nzero. _____ ______<br \/>\n10. A revenue account is closed with a debit to the revenue account and a credit to Income Summary.<\/p>\n<p>11. Income Summary is closed with a debit to Income Summary and a credit to the Withdrawals<br \/>\naccount. ____ _____<br \/>\n12. An adjusted trial balance provides all the data needed to record the closing entries. ___ ___<br \/>\nMultiple Choices (14 points, 1 point each)<br \/>\n1. Which of the following is not an application of accrual accounting?<br \/>\na. Recognizing revenues when earned and expenses when incurred.<br \/>\nb. Applying the matching rule.<br \/>\nc. Adjusting the accounts.<br \/>\nd. Recording on the basis of actual receipt and payment of cash.<br \/>\nName: _________________________________ Section: A or B<br \/>\n2. What is the adjusting entry for that portion of revenue received in advance which has now<br \/>\nbeen earned?<br \/>\na. Unearned Revenue \u2013 Debit; Cash \u2013 Credit<br \/>\nb. Unearned Revenue \u2013 Debit; Service Revenue \u2013 Credit<br \/>\nc. Service Revenue \u2013 Debit; Unearned Revenue \u2013 Credit<br \/>\nd. Cash \u2013 Debit; Unearned Revenue \u2013 Credit<br \/>\n3. An adjusting entry made to record salaries earned but not yet paid or recorded is made with<br \/>\nwhich of the following entries?<br \/>\na. Salaries Expense \u2013 Debit; Cash \u2013 Credit<br \/>\nb. Salaries Payable \u2013 Debit; Salaries Expense \u2013 Credit<br \/>\nc. Salaries Expense \u2013 Debit; Salaries Payable \u2013 Credit<br \/>\nd. Cash \u2013 Debit; Salaries Expense \u2013 Credit<br \/>\n4. Which of the following accounts is a contra account?<br \/>\na. Accumulated Depreciation\u2013Office Furniture<br \/>\nb. Interest Payable<br \/>\nc. Depreciation Expense\u2013Office Furniture<br \/>\nd. Unearned Revenue<br \/>\n5. The Supplies account had a $720 debit balance at the end of the accounting period before<br \/>\nadjustment for supplies used, and an inventory of $160 of unused supplies was on hand. Which<br \/>\nof the following is the required adjusting entry?<br \/>\na. Debit Supplies Expense $160 and credit Supplies $160.<br \/>\nb. Debit Supplies Expense $560 and credit Supplies $560.<br \/>\nc. Debit Supplies $160 and credit Supplies Expense $160.<br \/>\nd. Debit Supplies $560 and credit Supplies Expense $560.<br \/>\n6. Use this information pertaining to ABC Company to answer the following question.<br \/>\nThe company received a $3,600 advance payment during the year on services to be performed.<br \/>\nBy the end of the year, 1\/3 of the services had been performed (Hint: What is 1\/3 of 3,600).<br \/>\nThe adjusting entry to record the amount of service revenue earned during the accounting period<br \/>\nis<br \/>\na. Service Revenue 2,400<br \/>\nUnearned Revenue 2,400<br \/>\nb. Unearned Revenue 1,200<br \/>\nName: _________________________________ Section: A or B<br \/>\nService Revenue 1,200<br \/>\nc. Service Revenue 1,200<br \/>\nUnearned Revenue 1,200<br \/>\nd. Unearned Revenue 2,400<br \/>\nService Revenue 2,400<br \/>\n7. Which of the following accounts is a Permanent account?<br \/>\na. Building<br \/>\nb. Depreciation Expense\u2013Buildings<br \/>\nc. Interest Expense<br \/>\nd. Service Revenue<br \/>\n8. Closing entries are made<br \/>\na. to clear revenue and expense accounts of their balances.<br \/>\nb. to clear withdrawals of its balance.<br \/>\nc. to summarize a period\u2019s revenues and expenses.<br \/>\nd. All of these choices.<br \/>\n9. An important purpose of closing entries is to<br \/>\na. set temporary account balances to zero to begin the next period.<br \/>\nb. adjust the accounts in the ledger.<br \/>\nc. help in preparing financial statements.<br \/>\nd. set permanent account balances to zero to begin the next period.<br \/>\n10. Closing entries ultimately will affect<br \/>\na. total liabilities.<br \/>\nb. the Cash account.<br \/>\nc. the owner&#8217;s Capital account.<br \/>\nd. total assets.<br \/>\n11. Use the following adjusted trial balance to answer the question below.<\/p>\n<p>John\u2019s Jet Skis<br \/>\nAdjusted Trial<br \/>\nBala December<br \/>\n31, 20<br \/>\nnce<br \/>\nx5<br \/>\nName: _________________________________ Section: A or B<br \/>\nCash $ 25,000<br \/>\nAccounts Receivable 35,000<br \/>\nSupplies 15,000<br \/>\nPrepaid Insurance 25,000<br \/>\nBuilding 142,000<br \/>\nAccumulated Depreciation\u2013Building $ 30,000<br \/>\nAccounts Payable 60,000<br \/>\nJohn Clair, Capital 100,000<br \/>\nJohn Clair, Withdrawals 40,000<br \/>\nJet Ski Rentals 192,000<br \/>\nDepreciation Expense-Building 10,000<br \/>\nWages Expense 70,000<br \/>\nInsurance Expense 20,000 _______<br \/>\n$382,000 $382,000<br \/>\nThe entry to close the John Clair, Withdrawals account is:<br \/>\na. John Clair, Withdrawals 40,000<br \/>\nIncome Summary 40,000<br \/>\nb. John Clair, Withdrawals 40,000<br \/>\nJohn Clair, Capital 40,000<br \/>\nc. John Clair, Withdrawals 40,000<br \/>\nIncome Summary 40,000<br \/>\nd. John Clair, Capital 40,000<br \/>\nJohn Clair, Withdrawals 40,000<br \/>\n13. Use the following adjusted trial balance to answer the question below.<\/p>\n<p>John\u2019s Jet Skis<br \/>\nAdjusted Trial<br \/>\nBala December<br \/>\n31, 20<br \/>\nnce<br \/>\nx5<br \/>\nCash $ 25,000<br \/>\nName: _________________________________ Section: A or B<br \/>\nAccounts Receivable 35,000<br \/>\nSupplies 15,000<br \/>\nPrepaid Insurance 25,000<br \/>\nBuilding 142,000<br \/>\nAccumulated Depreciation\u2013Building $ 30,000<br \/>\nAccounts Payable 60,000<br \/>\nJohn Clair, Capital 100,000<br \/>\nJohn Clair, Withdrawals 40,000<br \/>\nRentals Revenue 192,000<br \/>\nDepreciation Expense-Building 10,000<br \/>\nWages Expense 70,000<br \/>\nInsurance Expense 20,000 _______<br \/>\n$382,000 $382,000<br \/>\nThe entry to close the Jet Ski Rentals account is<br \/>\na. Income Summary 192,000<br \/>\nRentals Revenue 192,000<br \/>\nb. Rentals Revenue 192,000<br \/>\nJohn Clair, Withdrawals 192,000<br \/>\nc. John Clair, Capital 192,000<br \/>\nRentals Revenue 192,000<br \/>\nd. Rentals Revenue 192,000<br \/>\nIncome Summary 192,000<br \/>\n14. The post-closing trial balance would not include which of the following accounts?<br \/>\na. Unearned Legal Revenue<br \/>\nb. Accumulated Depreciation\u2013Office Equipment<br \/>\nc. Withdrawals<br \/>\nd. Owner&#8217;s Capital<br \/>\nName: _________________________________ Section: A or B<br \/>\nProblem (35 points)<br \/>\n1. Indicate with an X in the appropriate column the type of entry to be made to close the following<br \/>\naccounts: (3 points)<br \/>\nDebit Credit Not Closed<br \/>\na. Design Revenue ____ ____ ____<br \/>\nb. Telephone Expense ____ ____ ____<br \/>\nc. Withdrawals ____ ____ ____<br \/>\nd. Cash ____ ____ ____<br \/>\ne. Depreciation ExpenseBuilding<br \/>\n____ ____ ____<br \/>\nf. Owner&#8217;s Capital ____ ____ ____<br \/>\n2. In the journal provided, prepare adjusting entries for the following items. Omit explanations. (If<br \/>\nno entry is required for a transaction\/event, write &#8220;No Journal Entry Required&#8221;.) (12<br \/>\npoints)<br \/>\nList of accounts: Supplies, Acct. Rec., Acct. Pay., Wage Expense, Equipment Expense, Cash,<br \/>\nService Revenue, Unearned Service Revenue, Owner\u2019s capital, Supplies Expense, Depreciation<br \/>\nExpense, Wage payable, Accumulated Depreciation<br \/>\na. Depreciation on machinery is $940 for the accounting period.<br \/>\nb. Office supplies of $600 were on hand at the beginning of the period. Purchases of office<br \/>\nsupplies during the period totaled $200. At the end of the period, $80 in office supplies<br \/>\nremained.<br \/>\nc. Wages of $4,000 are paid every Friday for a five-day workweek. If July 1 falls on a<br \/>\nWednesday, the adjusting entry for wages would be recorded at what amount?<br \/>\nTransaction General Journal $$ $$<br \/>\na.<\/p>\n<p>b.<\/p>\n<p>Name: _________________________________ Section: A or B<br \/>\nc.<\/p>\n<p>3. In the journal provided, prepare Sterling&#8217;s closing entries. Omit explanations. (20 points)<br \/>\nBelow are the adjusted accounts of Sterling Company for the month ended May 31, 20&#215;5, listed<br \/>\nin alphabetical order:<br \/>\nAccounts Payable $ 6,000 Office Equipment $75,000<br \/>\nAccounts Receivable 24,000 Prepaid Rent 11,000<br \/>\nAccumulated Depreciation- Salaries Expense 18,000<br \/>\nOffice Equipment 30,000 Paul Sterling, Capital 60,000<br \/>\nCash 12,000 Paul Sterling, Withdrawals 7,500<br \/>\nCommissions Revenue 54,000 Utilities Expense 1,000<br \/>\nDepreciation Expense-<br \/>\nOffice Equipment 1,500<br \/>\nList of accounts: Commissions Revenue, Acct. Rec., Acct. Pay., Wage Expense, Equipment<br \/>\nExpense, Cash, Service Revenue, Salaries Expense , Unearned Service Revenue, Paul Sterling,<br \/>\nCapital, Supplies Expense, Depreciation Expense, Income Summary, Wage payable, Paul<br \/>\nSterling, Withdrawals, Depreciation Expense\u2013Office Equipment, Utilities Expense<br \/>\nTransaction General Journal $$ $$<br \/>\nStep 1<\/p>\n<p>Step 2<\/p>\n<p>Step 3<br \/>\nName: _________________________________ Section: A or B<\/p>\n<p>Step 4<\/p>\n<p><center><a href=\"http:\/\/onlineclassesguru.com\/orders\/ordernow\"><img decoding=\"async\" src=\"https:\/\/encrypted-tbn0.gstatic.com\/images?q=tbn:ANd9GcTyj99p60XCLyLk1htB7-1neRt8-2QdnenNlQ&usqp=CAU\"target=\"_http:\/\/onlineclassesguru.com\/orders\/ordernow\"\/><\/center><p>","protected":false},"excerpt":{"rendered":"<p>True\/False (12 points, 1 point each) 1. Net income results when expenses exceed revenues. ____ ____ 2. One application of accrual accounting is adjusting the accounts. ___ ____ 3. Accrual accounting recognizes revenues and expenses at the point that cash changes hands. _____ _____ 4. Depreciation Expense\u2013Equipment is an example of a contra account. ___&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2535","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Accounting Revenue Depreciation &amp; Income Questions - onlineclassesguru<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/onlineclassesguru.com\/index.php\/2020\/10\/30\/accounting-revenue-depreciation-income-questions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Accounting Revenue Depreciation &amp; Income Questions - onlineclassesguru\" \/>\n<meta property=\"og:description\" content=\"True\/False (12 points, 1 point each) 1. 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