ACCT 2000 LOWE-ARDOIN EXAM 2 ACTUAL
/NEWEST VERSION 2026 EXAM QUESTIONS
AND ANSWERS /A+ GRADED PACK |
Complete Review Pack | A+
• the ______ Recognition Principle requires companies to recognize revenue in the
accounting period in which it is earned. -✓✓revenue
• Adjustments are prepared every time _____ are issued in order to ensure all accounts
are correctly reported. -✓✓financial statements
• Adjustments includes one _________ and one ________ accounts -✓✓balance sheet
(assets or liability) &
income statement (revenue or expense)
• Accumulated Deprecation is what type of account? __________. What financial
statement would include this account? _______________ -✓✓contra asset account &
balance sheet
• what are the four types of adjustments? -✓✓prepaid expenses, unearned revenues,
accrued revenues, and accrued expense
• An accrued expense adjustment, records amounts owed (or incurred), but not yet paid.
Prior to completing this type of adjustment, which accounts are understated? -
✓✓expenses and liabilities
• A Supply account at the end of the period showed a balance of $5,000. However, a
physical counts showed only $3,000. To correct this issue, the supplies account is
__________________ and the supplies expense account is __________ by
_____________.
If the company does not make the adjustment, supplies expense, net income, and
stockholders' equity would be ____________________ and assets would be
____________. -✓✓decreased
increased by $2000
understated
overstated
• Which one of these statements about the accrual basis of accounting is false? a.
Companies record events that change their financial statements in the period in which
events occur, even if cash was not exchanged.
, b. Companies recognize revenue in the period in which it is earned.
c. This basis is in accord with generally accepted accounting principles. d. Companies
record revenue only when they receive cash, and record expense only when they pay
out cash. -✓✓d. Companies record revenue only when they receive cash, and record
expense only when they pay out cash.
• Each of the following is a major type (or category) of adjustment except:
a. Prepaid expenses
b. Accrued revenues
c. Accrued expenses
d. Earned expenses -✓✓d. Earned expenses
• Colleen Mooney earned a salary of $600 for the last week of September. She will be
paid on October 1. The adjustment for Colleen's employer at September 30 is:
a. No entry is required.
b. Increase to Salaries and Wages Expense, $600 and Increase to Salaries and Wages
Payable, $600
c. Increase to Salaries and Wages Expense, $600 and Increase to Cash, $600
d. Increase to Salaries and Wages Payable, $600 and Increase to Cash, $600 -✓✓b.
Increase to Salaries and Wages Expense, $600 and Increase to Salaries and Wages
Payable, $600
• Adjustments for unearned revenues:
a. Decrease liabilities and increase revenues
b. Increase liabilities and increase revenues
c. Increase assets and increase revenues
d. Decrease revenues and increase assets -✓✓a. Decrease liabilities and increase
revenues
• Prepaid expenses are: a. paid and recorded in an asset account before they are used
or consumed b. paid and recorded in an asset account after they are used or
consumed. c. incurred but not yet paid or recorded. d. incurred and already paid or
recorded. -✓✓a. paid and recorded in an asset account before they are used or
consumed
• Deposits held by a bank are considered what type of account for the bank? -
✓✓liability
• List the three types of reconciling items for which a bank balance must be adjusted. -
✓✓Add - deposits in transit
Subtract - outstanding checks
Add/Subtract - bank errors
/NEWEST VERSION 2026 EXAM QUESTIONS
AND ANSWERS /A+ GRADED PACK |
Complete Review Pack | A+
• the ______ Recognition Principle requires companies to recognize revenue in the
accounting period in which it is earned. -✓✓revenue
• Adjustments are prepared every time _____ are issued in order to ensure all accounts
are correctly reported. -✓✓financial statements
• Adjustments includes one _________ and one ________ accounts -✓✓balance sheet
(assets or liability) &
income statement (revenue or expense)
• Accumulated Deprecation is what type of account? __________. What financial
statement would include this account? _______________ -✓✓contra asset account &
balance sheet
• what are the four types of adjustments? -✓✓prepaid expenses, unearned revenues,
accrued revenues, and accrued expense
• An accrued expense adjustment, records amounts owed (or incurred), but not yet paid.
Prior to completing this type of adjustment, which accounts are understated? -
✓✓expenses and liabilities
• A Supply account at the end of the period showed a balance of $5,000. However, a
physical counts showed only $3,000. To correct this issue, the supplies account is
__________________ and the supplies expense account is __________ by
_____________.
If the company does not make the adjustment, supplies expense, net income, and
stockholders' equity would be ____________________ and assets would be
____________. -✓✓decreased
increased by $2000
understated
overstated
• Which one of these statements about the accrual basis of accounting is false? a.
Companies record events that change their financial statements in the period in which
events occur, even if cash was not exchanged.
, b. Companies recognize revenue in the period in which it is earned.
c. This basis is in accord with generally accepted accounting principles. d. Companies
record revenue only when they receive cash, and record expense only when they pay
out cash. -✓✓d. Companies record revenue only when they receive cash, and record
expense only when they pay out cash.
• Each of the following is a major type (or category) of adjustment except:
a. Prepaid expenses
b. Accrued revenues
c. Accrued expenses
d. Earned expenses -✓✓d. Earned expenses
• Colleen Mooney earned a salary of $600 for the last week of September. She will be
paid on October 1. The adjustment for Colleen's employer at September 30 is:
a. No entry is required.
b. Increase to Salaries and Wages Expense, $600 and Increase to Salaries and Wages
Payable, $600
c. Increase to Salaries and Wages Expense, $600 and Increase to Cash, $600
d. Increase to Salaries and Wages Payable, $600 and Increase to Cash, $600 -✓✓b.
Increase to Salaries and Wages Expense, $600 and Increase to Salaries and Wages
Payable, $600
• Adjustments for unearned revenues:
a. Decrease liabilities and increase revenues
b. Increase liabilities and increase revenues
c. Increase assets and increase revenues
d. Decrease revenues and increase assets -✓✓a. Decrease liabilities and increase
revenues
• Prepaid expenses are: a. paid and recorded in an asset account before they are used
or consumed b. paid and recorded in an asset account after they are used or
consumed. c. incurred but not yet paid or recorded. d. incurred and already paid or
recorded. -✓✓a. paid and recorded in an asset account before they are used or
consumed
• Deposits held by a bank are considered what type of account for the bank? -
✓✓liability
• List the three types of reconciling items for which a bank balance must be adjusted. -
✓✓Add - deposits in transit
Subtract - outstanding checks
Add/Subtract - bank errors
