24. To correct this error in 20X0, you need to record just the adjusting entry that was not made because... a. an expense account is involved b. no error was made recording the note payable on July 1,20X0 c. an accrual is involved rather than a deferral d. the books have not been closed 25. If a check written by the company is recorded for the wrong amount, the error is likely to be found because... a. the trial balance will be out of balance by an amount divisible by 9 b. the trial balance will be out of balance by an amount divisible by 2 c. the bank reconciliation will be out of balance when the check clears d. the balance sheet will be out of balance 26. On October 1, 20X1, MarCo signs a one-year, 8% note payable for $10,000 with principle and interest due on October 1, 20X2. It is MarCo's only note outstanding. On October 1, 20X2 when the note is paid, MarCo debits Notes Payable and credits Cash for $10,800, the sum of principle and interest. This error is likely to be found because... a. the bank reconciliation will be out of balance when the check clears b. the trial balance will be out of balance by $800 c. the trial balance will show a balance in Notes Payable that is not normal d. interest expense will be understated 27. While writing a check for $2,000 on April 26, 20X2 for a computer purchased on December 26,20X1, you discover that when the purchase was made in December, the $2,000 had been credited to Notes Payable instead of Accounts Payable. If the books are closed, what single entry could you make? 28. At year end, a physical count of office supplies reveals that $7,000 of supplies were used up but no adjusting entry was made to account for this. If this error is found, it will most likely be because... a. the trial balance would be out of balance by $7,000 b. the trial balance would be out of balance by $14,000 c. the trial balance would be out of balance by $3,500 d. none of the above 29. If the omission in question 28 is found before the books are closed, the adjusting entry to correct the error will include... a. a debit to Office Supplies Expense b. a credit to Office Supplies Expense c. a debit to Inventory d. none of the above 30. The type of error given in question 28 is known as ... a. a deferral error b. an accrual error c. a prior period error d. none of the above 31. OutCo failed to record depreciation on certain machinery for 20X1. This error... a. affects the income statement only b. affects the balance sheet only c. affects both the income statement and the balance sheet d. affects neither the income statement nor the balance sheet 32. Preventing or discovering accounting errors requires knowing and using .... a. double-entry bookkeeping b. internal controls c. inspection of the trial balance d. all of the above 33. On July 1, 20X1, a machine is purchased at a cost of $20,000. Before the 20X1 books are clnser you discover that an error caused by using an incorrect residual value resulted in depreciation for the year being $200 too high. To correct this error you will record a second adjusting entry for depreciation that will include... a. a $200 debit to Depreciation Expense b. a $200 credit to Asset-Machinery c. a $200 debit to Accumulated Depreciation d. none of the above 34. The post-closing trial balance shmild be reviewed to make sure that ... a. Retained Earnings has the ending and not the beginning balance b. only balance sheet accounts remain open c. all temporary accounts and their contra accounts have been closed out d. all of the above 35. Before the 20X1 books are closed, you discover that on January 2,20X1, when a new machine was purchased for $20,000, the $20,000 was debited to Machinery Maintenance Expense. The new machine, which is being depreciated under the straight-line method, has a 10 -year life and no estimated salvage value. However, because of the error, no depreciation was recorded for the year. If no correction is made ... a. net income for 20X1 will be understated by $18,000 b. net income for 20X1 will be understated by $2,000 c. total assets on the December 31,20X1 balance sheet will be understated by $20,000 d. the trial balance will not balance 36. The error described in question 35 is likely to be discovered because ... a. inspection of the trial balance would reveal Machinery had a balance that was not normal b. inspection of the trial balance would reveal Machinery Maintenance Expense had an unusually large balance c. inspection of the trial balance would reveal no depreciation expense d. none of the above 24. To correct this error in 20X0, you need to record just the adjusting entry that was not made because... a. an expense account is involved b. no error was made recording the note payable on July 1,20X0 c. an accrual is involved rather than a deferral d. the books have not been closed 25. If a check written by the company is recorded for the wrong amount, the error is likely to be found because... a. the trial balance will be out of balance by an amount divisible by 9 b. the trial balance will be out of balance by an amount divisible by 2 c. the bank reconciliation will be out of balance when the check clears d. the balance sheet will be out of balance 26. On October 1, 20X1, MarCo signs a one-year, 8% note payable for $10,000 with principle and interest due on October 1, 20X2. It is MarCo's only note outstanding. On October 1, 20X2 when the note is paid, MarCo debits Notes Payable and credits Cash for $10,800, the sum of principle and interest. This error is likely to be found because... a. the bank reconciliation will be out of balance when the check clears b. the trial balance will be out of balance by $800 c. the trial balance will show a balance in Notes Payable that is not normal d. interest expense will be understated 27. While writing a check for $2,000 on April 26, 20X2 for a computer purchased on December 26,20X1, you discover that when the purchase was made in December, the $2,000 had been credited to Notes Payable instead of Accounts Payable. If the books are closed, what single entry could you make? 28. At year end, a physical count of office supplies reveals that $7,000 of supplies were used up but no adjusting entry was made to account for this. If this error is found, it will most likely be because... a. the trial balance would be out of balance by $7,000 b. the trial balance would be out of balance by $14,000 c. the trial balance would be out of balance by $3,500 d. none of the above 29. If the omission in question 28 is found before the books are closed, the adjusting entry to correct the error will include... a. a debit to Office Supplies Expense b. a credit to Office Supplies Expense c. a debit to Inventory d. none of the above 30. The type of error given in question 28 is known as ... a. a deferral error b. an accrual error c. a prior period error d. none of the above 31. OutCo failed to record depreciation on certain machinery for 20X1. This error... a. affects the income statement only b. affects the balance sheet only c. affects both the income statement and the balance sheet d. affects neither the income statement nor the balance sheet 32. Preventing or discovering accounting errors requires knowing and using .... a. double-entry bookkeeping b. internal controls c. inspection of the trial balance d. all of the above 33. On July 1, 20X1, a machine is purchased at a cost of $20,000. Before the 20X1 books are clnser you discover that an error caused by using an incorrect residual value resulted in depreciation for the year being $200 too high. To correct this error you will record a second adjusting entry for depreciation that will include... a. a $200 debit to Depreciation Expense b. a $200 credit to Asset-Machinery c. a $200 debit to Accumulated Depreciation d. none of the above 34. The post-closing trial balance shmild be reviewed to make sure that ... a. Retained Earnings has the ending and not the beginning balance b. only balance sheet accounts remain open c. all temporary accounts and their contra accounts have been closed out d. all of the above 35. Before the 20X1 books are closed, you discover that on January 2,20X1, when a new machine was purchased for $20,000, the $20,000 was debited to Machinery Maintenance Expense. The new machine, which is being depreciated under the straight-line method, has a 10 -year life and no estimated salvage value. However, because of the error, no depreciation was recorded for the year. If no correction is made ... a. net income for 20X1 will be understated by $18,000 b. net income for 20X1 will be understated by $2,000 c. total assets on the December 31,20X1 balance sheet will be understated by $20,000 d. the trial balance will not balance 36. The error described in question 35 is likely to be discovered because ... a. inspection of the trial balance would reveal Machinery had a balance that was not normal b. inspection of the trial balance would reveal Machinery Maintenance Expense had an unusually large balance c. inspection of the trial balance would reveal no depreciation expense d. none of the above