Question

please highlight the answer it's very urgent subject is ACC 111

Q: One principal difference between an adjusting journal entry and a journal entry to record a transaction is

1. The adjustment can be needed because of an internal event such as using supplies

2. The transaction involved accounts payable

3. The adjustment always reduces cash

4. The transaction always increases common stock

Q: When adjusting for insurance coverage expiring during a period

1. Insurance expense is increased

2. Prepaid insurance is decreased

3. Both A and B

4. Cash is increased

Q: When adjusting for depreciation expense

1. An expense is increased

2. A liability is decreased

3. A revenue is decreased

4. An equity account is increased

Q: When adjusting unearned revenue

1. Revenue is increased

2. A liability is decreased

3. Both A and B

4. Neither A nor B

Q: When adjusting for an accrued expense

1. An expense is reduced

2. A liability is increased

3. An equity account is increased

4. A revenue is decreased

Q; Adjusting for wages earned by employees but not yet recorded

1. Increases an expense

2. Increases a liability

3. Both A and B

4. Neither A nor B

Q : Omitting the adjustment for unrecorded revenue

1. Understates net income

2. Understates assets

3. Understates equity

4. All of the above

5. Q:Which of the following events requires an adjustment

6. Borrowing money on a loan where principal and interest are due at maturity

7. Hiring an employee

8. Asking for proposals from three advertising agencies

9. Discussing future price increases

Q: Which of the following events requires an adjustment

1. Discussing possible future changes to the company’s logo

2. Receiving and paying October’s water bill before October 31

3. Hiring an attorney and agreeing to pay a retainer immediately

4. Completing revenue on October 20 and billing the customer the same day

Q: Omitting the adjustment for unearned revenue

1. Understates net income

2. Overstates liabilities

3. Both A and B

4. Neither A nor B

Q: The main accounting principle that requires adjusting entries is

1. Substance over form

2. The cost principle

3. The going concern principle

4. The matching principle

Q: Smith Company owns its building and land. The annual property tax bill is $12,000. Assuming Smith adjusts its accounts each month they should

1. Debit property tax expense and credit property tax payable for $12,000

2. Make no adjustment at all since it has not yet been paid

3. Debit property tax payable and credit property tax expense for $1,000

4. Debit property tax expense and credit property tax payable for $1,000

Q: Adjusting journal entries

1. Are optional according to GAAP

2. Are only used in months that end in y

3. Always use the cash account

4. Never use the cash account

Q : When closing the accounts at the end of the period

1. All asset accounts are closed

2. All equity accounts are closed

3. All temporary or nominal accounts are closed

4. All liability accounts are closed

Q : Closing the accounts

1. Sets nominal accounts back to zero at the end of a period

2. Updates the retained earnings account

3. Enables meaningful comparison of one period’s results to those of another period

4. All of the above

Q : When closing the revenue account

1. The revenue account is credited

2. The revenue account is debited

3. The unearned revenue account is closed

4. The expense accounts are debited

Q : When closing the expense accounts

1. The income summary account is debited

2. The expense accounts are credited

3. Both A and B

4. Neither A nor B

Q : When closing the income summary account

1. The retained earnings account may be debited or credited

2. The dividends account is debited

3. The cash account is credited

4. The common stock account is debited

Q ; When closing the dividends account

1. The income summary account is debited

2. The retained earnings account is credited

3. The retained earnings account is debited

4. None of the above

Q : The reason permanent or real accounts are not closed is because

1. They recorded how much of something occurred during a period

2. They recorded how much of something remains at the end of a period

3. They will stay open as long as the company still exists

4. Both B and C

Answer 1

Q.No	Question	Answer	Explanation
1.	One principal difference between an adjusting journal entry and a journal entry to record a transaction is	The adjustment can be needed because of an internal event such as using supplies	1. They use internal accounting. 2. Doesn’t soley effects payables sometimes also effects receviables, inventory, advances etc. 3. Never effects cash 4. Not necessarly increase cash always
2.	When adjusting for insurance coverage expiring during a period	Both A and B	Insurance expense is increased, Prepaid insurance is decreased Because when it is expiring in current year then all previously recognised as prepaid will be accruing for the current year and there will no separate prepaid for the current year.
3.	When adjusting for depreciation expense	An expense is increased	Because depreciation is an expenses that should be provided through adjusting entry.
4	When adjusting unearned revenue	Neither A nor B	Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It is recorded on a company’s balance sheet as a liability because it is a kind of advance received.
5	When adjusting for an accrued expense	A revenue is decreased	Accrued expenses are the expenses that related to current period but not due.. therefore it should be recorded as current period through Adjusting Journal entry thereby revenue decreases
6	Adjusting for wages earned by employees but not yet recorded	Both A and B	Expense for the current year increases and corresponding payable liability also increases.
7	Omitting the adjustment for unrecorded revenue	All of the above	Decreases revenue and thereby decreases equity (decrease in profit that goes to equity) and decreases in assets because of failure in recording corresponding receivables
8	Which of the following events requires an adjustment	Borrowing money on a loan where principal and interest are due at maturity	Because of interest accrued entry that should be passed at end of period, before the loan maturity.
9	Which of the following events requires an adjustment	Receiving and paying October’s water bill before October 31	Leads to prepaid expenditure
10	Omitting the adjustment for unearned revenue	Neither A nor B	It is an advance received for which services not provided therefore failure to record leads to overstate of profit and understates the liability.
11	The main accounting principle that requires adjusting entries is	The matching principle	Only Current period income should be matched with current period expenses and thereby arriving current period profit
12	Smith Company owns its building and land. The annual property tax bill is $12,000. Assuming Smith adjusts its accounts each month they should	Debit property tax expense and credit property tax payable for $1,000	Debit the expenses for each month and thereby increasing Liability by crediting with same amount each month.
13	Adjusting journal entries	Never use the cash account	Will never have an impact on cash balance.
14	When closing the accounts at the end of the period	All temporary or nominal accounts are closed	Since they relate to that current period only.
15	Closing the accounts	All of the above	Set nominal account to zero. Update the retained earnings by profit derived during the year and meaningful comparision of period to period.
16	When closing the revenue account	The revenue account is debited	Revenue account is credit in nature. So to close those accounts, they should be debited.
17	When closing the expense accounts	Both A and B	Expenses are in debit in nature so they are closed by crediting and transferred to income summary account by debiting.
18	When closing the income summary account	The retained earnings account may be debited or credited	Profit / Loss is transferred to Reserves/Retained earnings.
19	When closing the dividends account	The retained earnings account is debited	Dividend is opened by crediting income summary and closed by debting retained earnings/ owner’s equity.
20	The reason permanent or real accounts are not closed is because	Both B and C	It shows the position at every years end how much balance/life left. And will continue till the company cease to exist