Accounting

Which of the statements below is not true?

An adjusted trial balance proves the mathematical equality of debits and credits in the ledger.

An adjusted trial balance can be used to prepare financial statements.

An adjusted trial balance should show ledger account balances.

An adjusted trial balance is prepared before all transactions have been journalized.

A candy factory’s employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in

the period when the workers receive their checks.

March.

either in February or March depending on when the pay period ends.

February.

Management usually desires ________ financial statements and the IRS requires all businesses to file _________ tax returns.

monthly, monthly

monthly, annual

quarterly, monthly

annual, annual

If business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

unearned rent revenue.

accrued rent revenue.

cash.

prepaid rent.

Which one of the following is not a justification for adjusting entries?

Adjusting entries are necessary to ensure that the expense recognition principle is followed.

Adjusting entries are necessary to ensure that the revenue recognition principle is followed.

Adjusting entries are necessary to enable financial statements to be in conformity with GAAP.

Adjusting entries are necessary to bring the general ledger accounts in line with the budget

At March 1, Psychocandy Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $750 and consumed supplies of $800. If no adjusting entry is made for supplies

assets will be understated by $250.

net income will be understated by $800.

owner’s equity will be overstated by $800.

expenses will be understated by $750.

Stone Roses Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29–31). Employees work 5 days a week and the company pays $1,500 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?

Salaries and Wages Expense 4,500  Salaries and Wages Payable 4,500

Salaries and Wages Expense 1,500  Salaries and Wages Payable 1,500

Salaries and Wages Expense 7,500  Salaries and Wages Payable 7,500

No adjusting entry is required

Fugazi City College sold season tickets for the 2014 football season for $240,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

$150,000.

$60,000.

$90,000.

$0.

Employees at Tengo Corporation are paid $15,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Wednesday, December 31. How much salaries and wages expense should be recorded two days later on January 2?

$15,000

$9,000

$6,000

None, matching requires the weekly salary to be accrued on December 31

The balance in the supplies account on June 1 was $5,200, supplies purchased during June were $3,500, and the supplies on hand at June 30 were $3,000. The amount to be used for the appropriate adjusting entry is

$6,500.

$11,700.

$3,500.

$5,700.