ACCT 2000 LOWE ARDOIN 2 REVIEW
SHEET FULL SOLUTION ACTUAL
QUESTIONS WITH VERIFIED RESPONSES
ALREADY PASSED
⩥ At December 31, 2022, before any year-end adjustments, Marty
Company's Prepaid Insurance account had a balance of $2,700. it was
determined that $1,500 of the prepaid Insurance had expired. The
adjusted balance for insurance expense for the year would be
Answer: $1,500
⩥ On August 1 the Darius Co. purchased a photocopy machine for
$8,000. The estimated annual depreciation on the machine is $1,680. If
the company prepares annual financial statements on December 31, the
appropriate adjusting journal entry to make on December 31 of the first
year would be
Answer: Increase depreciation expense and increase accumulated
depreciation- equipment for $700
(1,680 x (5/12))
⩥ if the adjustment at the end of the accounting period is NOT made for
unearned revenues, then the result will be to
Answer: overstate liabilities and understate revenues
,⩥ Which of the following is NOT a typical example of an accrued
Answer: depreciation
⩥ During the adjusting process two transactions were missed. The first
is for unearned rent revenue of which $450 was earned during the
period, the second was for accrued interest payable of which $275 is
owed for the period. As a result of these omissions
Answer: net income is understated by $175
⩥ at the end of fiscal year, the usual adjustment made at the end of an
accounting period for accrued salaries owned to employees was omitted.
Which of the following statements is true?
Answer: Liabilities at the end of the year are understated
⩥ On August 1, Luang Corporation signed a $30,000, 14%, 2-year note
to help finance renovations being made to the corporation headquarters.
Assuming interest is accrued only when the year ends on December 31,
the appropriate adjustment to record interest expense for the first year
would be
Answer: an increase to interest expense and an increase to interest
payable for $1,750.
($30,000 x .14 x 5/12)
⩥ Saira works for a sports franchise which pays wages and salaries
earned on a monthly basis. A new accountant was hired by the sports
, franchise in late May. Due to inexperience, the new accountant failed to
accrue Saira's salary for May. What is the impact on the May 31
financial statements of the sports franchise?
Answer: expenses are understated; net income is overstated
⩥ Employees at the Waco Waffle House were paid on Friday, December
27 for the five days ending on December 27. The next payday is Friday,
January 3. Employees work 5 days a week. The weekly payroll amounts
to $3,800. The appropriate adjusting journal entry on December 31
would be to credit Salaries and Wages Payable for
Answer: $1,520 (3800 x 2/5)
⩥ Springer Company listed outstanding checks totaling $4,500 on its
September bank reconciliation. In October, the company issued checks
totaling $45,700. The October bank statement shows that checks totaling
$39,800 cleared the bank. In addition, a check from one of Springer's
customers in the amount of $500 was returned as NSF. The outstanding
checks on the October bank reconciliation should total
Answer: $10,400
⩥ How are deposits in transit treated in a bank reconciliation?
Answer: Added to the bank balance
⩥ for which item below might a bank issue a credit memorandum to
depositor's account
SHEET FULL SOLUTION ACTUAL
QUESTIONS WITH VERIFIED RESPONSES
ALREADY PASSED
⩥ At December 31, 2022, before any year-end adjustments, Marty
Company's Prepaid Insurance account had a balance of $2,700. it was
determined that $1,500 of the prepaid Insurance had expired. The
adjusted balance for insurance expense for the year would be
Answer: $1,500
⩥ On August 1 the Darius Co. purchased a photocopy machine for
$8,000. The estimated annual depreciation on the machine is $1,680. If
the company prepares annual financial statements on December 31, the
appropriate adjusting journal entry to make on December 31 of the first
year would be
Answer: Increase depreciation expense and increase accumulated
depreciation- equipment for $700
(1,680 x (5/12))
⩥ if the adjustment at the end of the accounting period is NOT made for
unearned revenues, then the result will be to
Answer: overstate liabilities and understate revenues
,⩥ Which of the following is NOT a typical example of an accrued
Answer: depreciation
⩥ During the adjusting process two transactions were missed. The first
is for unearned rent revenue of which $450 was earned during the
period, the second was for accrued interest payable of which $275 is
owed for the period. As a result of these omissions
Answer: net income is understated by $175
⩥ at the end of fiscal year, the usual adjustment made at the end of an
accounting period for accrued salaries owned to employees was omitted.
Which of the following statements is true?
Answer: Liabilities at the end of the year are understated
⩥ On August 1, Luang Corporation signed a $30,000, 14%, 2-year note
to help finance renovations being made to the corporation headquarters.
Assuming interest is accrued only when the year ends on December 31,
the appropriate adjustment to record interest expense for the first year
would be
Answer: an increase to interest expense and an increase to interest
payable for $1,750.
($30,000 x .14 x 5/12)
⩥ Saira works for a sports franchise which pays wages and salaries
earned on a monthly basis. A new accountant was hired by the sports
, franchise in late May. Due to inexperience, the new accountant failed to
accrue Saira's salary for May. What is the impact on the May 31
financial statements of the sports franchise?
Answer: expenses are understated; net income is overstated
⩥ Employees at the Waco Waffle House were paid on Friday, December
27 for the five days ending on December 27. The next payday is Friday,
January 3. Employees work 5 days a week. The weekly payroll amounts
to $3,800. The appropriate adjusting journal entry on December 31
would be to credit Salaries and Wages Payable for
Answer: $1,520 (3800 x 2/5)
⩥ Springer Company listed outstanding checks totaling $4,500 on its
September bank reconciliation. In October, the company issued checks
totaling $45,700. The October bank statement shows that checks totaling
$39,800 cleared the bank. In addition, a check from one of Springer's
customers in the amount of $500 was returned as NSF. The outstanding
checks on the October bank reconciliation should total
Answer: $10,400
⩥ How are deposits in transit treated in a bank reconciliation?
Answer: Added to the bank balance
⩥ for which item below might a bank issue a credit memorandum to
depositor's account
