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    ADJUSTING AND CLOSING ENTRIES Assignment Nov 20 2020

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    Kayle Mallillin
    The document contains multiple choice questions about accounting for accruals. Accruals are used to record expenses that have been incurred or revenue that has been earned but not yet paid. For expenses, an accrual entry debits an expense account and credits a liability account. For revenue, an accrual entry debits an asset account and credits a revenue account. The document tests understanding of accrual entries for expenses like wages, interest, and salaries. It also addresses how accrued items appear on the balance sheet and calculating the proper accrual amount.

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    ADJUSTING AND CLOSING ENTRIES Assignment Nov 20 2020

    Uploaded by

    Kayle Mallillin
    46 views2 pages
    The document contains multiple choice questions about accounting for accruals. Accruals are used to record expenses that have been incurred or revenue that has been earned but not yet paid. For expenses, an accrual entry debits an expense account and credits a liability account. For revenue, an accrual entry debits an asset account and credits a revenue account. The document tests understanding of accrual entries for expenses like wages, interest, and salaries. It also addresses how accrued items appear on the balance sheet and calculating the proper accrual amount.

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    ADJUSTING-AND-CLOSING-ENTRIES-Assignment-Nov-20-2020 (2)

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    The document contains multiple choice questions about accounting for accruals. Accruals are used to record expenses that have been incurred or revenue that has been earned but not yet paid. For expenses, an accrual entry debits an expense account and credits a liability account. For revenue, an accrual entry debits an asset account and credits a revenue account. The document tests understanding of accrual entries for expenses like wages, interest, and salaries. It also addresses how accrued items appear on the balance sheet and calculating the proper accrual amount.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    46 views2 pages

    ADJUSTING AND CLOSING ENTRIES Assignment Nov 20 2020

    Uploaded by

    Kayle Mallillin
    The document contains multiple choice questions about accounting for accruals. Accruals are used to record expenses that have been incurred or revenue that has been earned but not yet paid. For expenses, an accrual entry debits an expense account and credits a liability account. For revenue, an accrual entry debits an asset account and credits a revenue account. The document tests understanding of accrual entries for expenses like wages, interest, and salaries. It also addresses how accrued items appear on the balance sheet and calculating the proper accrual amount.

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    Homework Quiz

    Accruals

    1. An expense has not been paid and has not yet been recognized in the accounts by a routine entry. To properly
    adhere to the Matching Principle, which of the following is required:

    a. All of the below


    b. Deferral entry
    c. Accrual entry
    d. Inventory entry

    2. Alliah, Inc. has wages that have been earned but not paid at the end of the accounting period. The entry to
    properly accrue Wages Expense includes:

    a. Wages Payable, debit; Wages Income, credit


    b. Wages Income, debit; Wages Payable, credit
    c. Wages Payable, debit; Wages Expense, credit
    d. Wages Expense, debit; Wages Payable, credit

    3. Alliah, Inc. neglects to make the required adjusting entry for wages at the end of the accounting period. Which of
    the following statements reflect the impact of this oversight?

    a. Salary Expense for the year is overstated.


    b. Liabilities at the end of the year are understated.
    c. Assets at the end of the year are understated.
    d. Owner's equity at the end of the year is understated.

    4. Accrued Expenses usually appear on the Balance Sheet as:

    a. Cash
    b. Liabilities
    c. Assets
    d. Capital Stock

    5. Accrued Revenue is recorded when:

    a. Services have already been earned and recorded.


    b. Services have already been paid for in cash and are expected to be earned in the upcoming accounting
    period.
    c. Services have already been paid for in cash.
    d. Services have been earned but have not yet been recorded.

    6. Accrued Revenue usually appears on the Balance Sheet as:

    a. Cash
    b. Liabilities
    c. Assets
    d. Capital Stock

    7. At December 31, 2019, interest expense of 960 is owed on a two-year bank note that will not be paid until July
    2020, what is the appropriate accrual at the end of 2012?

    a. Interest Expense .................. 960


    Cash ..........................…….. 960
    b. Interest Payable .................. 960
    Interest Expense ................. 960
    c. Cash ..............................…. 960
    Interest Expense ..............… 960
    d. Interest Expense .................. 960
    Interest Payable ..............… 960

    7. Jeremie’s Lawn Service borrowed 10,000 from Philippine National Bank on November 1, 2019. The loan is for
    a term of three years and carries a 10% rate of interest. Interest is due at the maturity of the loan. The entry to
    properly accrue 2019 Interest Expense should include:

    a. A debit to Interest Expense and a credit to Interest Payable.


    b. A debit to Interest Expense and a credit to Cash.
    c. A debit to Interest Expense and a credit to Accounts Receivable.
    d. A debit to Interest Expense and a credit to Loan Receivable.

    8. Jeremie 's Lawn Service borrowed 10,000 from Philippine National Bank on November 1, 2019. The loan is for
    a term of three years and carries a 10% rate of interest. Interest is due at the maturity of the loan. To properly
    accrue interest expense in 2019, Jeremie should:
    a. Do nothing as the loan is not due until November1.
    b. Recognize Interest Expense for 2 of the loan's 36-month term.
    c. Recognize Interest Expense for 12 of the loan's 36-month term.
    d. Recognize Interest Expense for 10 of the loan's 36-month term.

    9. Jeremie 's Lawn Service borrowed 10,000 from Philippine National Bank on November 1, 2019. The loan is for
    a term of three years and carries a 15% rate of interest. Interest is due at the maturity of the loan. To properly
    accrue interest expense in 2019, Jeremie should debit Interest Expense and credit Interest Payable for:

    a. 1,500
    b. 1,000
    c. 500
    d. 250

    10. Jeremie 's Lawn Service borrowed 10,000 from Philippine National Bank on November 1, 2019. The loan is for a
    term of three years and carries a 15% rate of interest. Interest is due at the maturity of the loan. To properly
    accrue interest expense in 2020, Jeremie should debit Interest Expense and credit Interest Payable for:

    a. 1,500
    b. 1,000
    c. 500
    d. 250

    11. Lia 's Styling Salon, a Sole Proprietorship, pays weekly salaries of 5,000 each Friday for a five-day week ending
    on that day. The accrual required for a fiscal period ending on Thursday is:

    a. Debit Salaries Payable, 4,000; credit Cash, 4,000


    b. Debit Salary Expense, 4,000; credit Drawing, 4,000
    c. Debit Salary Expense, 4,000; credit Salaries Payable, 4,000
    d. Debit Drawing, 4,000; credit Cash, 4,000

    12. Lia 's Styling Salon, a Sole Proprietorship, pays weekly salaries of 8,000 each Friday for a five-day week ending
    on that day. The accrual required for a fiscal period ending on a Tuesday includes a debit to Salaries Expense and
    a credit to Salaries Payable for:

    a. 1,600
    b. 2,000
    c. 3,000
    d. 3,200

    13. Lia 's Styling Salon, a Sole Proprietorship, pays weekly salaries of 5,000 each Friday for a five-day week ending
    on that day. If 4,000 is accrued as Salaries Payable in the current fiscal period, the payment of salaries on the first
    Friday of the next fiscal period will include a:

    a. Debit to Salaries Expense for 4,000.


    b. Debit to Salaries Expense for 5,000.
    c. Debit to Salaries Payable for 5,000.
    d. Debit to Salaries Payable for 4,000.

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