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Circle the letter of the best response. 1. Which is the proper order of accounting cycle activities? A trial balance is prepared Business Transactions occur and analyzed Financial Statements are prepared Information from the journal is posted to the ledger Journal entries are recorded in the general journal The worksheet is completed 5, 2, 6, 1, 4,3 1, 3, 6, 5, 4,2 2,5,4, 1, 6,3 2, 5, 1, 6, 3, 4 d. The purpose of adjusting entries is to: a record revenues in the period in which they are earned b. record expenses in the period in which they are incurred c. the balances on the income statement and balance sheet are correct @ all of the above 3. Which of the following accounts is not commonly adjusted in an adjusting entry? a cash-adjusted to match the bank statement b. office supplies - adjusted to record supplies used during the period c. prepaid rent - adjusted to record rent expense d. equipment - adjusted to record depreciation 4. At the end of its fiscal year, the company had only $100 of office supplies on hand but the supplies account listed S550. What is the year end adjusting journal entry? a. debit supplies and credit supplies expense for $100 debit supplies expense and credit supplies for $100 c. debit supplies and credit supplies expense for $450 d. ebit supplies expense and credit supplies for $450 On March 1, Babko Company paid $1,500 for 6 months rent. What is the adjusting entry for the fiscal year ending June 30? debit rent expense and credit prepaid rent for $750 b. debit prepaid rent and credit rent expense for $750 c. debit rent expense and credit prepaid rent for $1,000 d. debit prepaid rent and credit rent expense for $1,000 6. Annual equipment depreciation is calculated as S5,000. What is the adjusting journal entry? a. debit equipment and credit depreciation expense for $5,000 b. debit depreciation expense and credit accumulated depreciation for $5,000 c. debit accumulated depreciation and credit equipment for $5,000 d. debit accumulated depreciation and credit depreciation expense for $5,000 7. Employees are paid every two weeks. On December 31, employees are owed $2,500 in salaries since the last payday on December 22. What is the adjusting journal entry? debit cash and credit salaries expense debit salaries expense and credit cash debit salaries payable and credit salaries expense debit salaries expense and credit salaries payable Adjustments for prepaid expenses: a. decrease revenues and increase assets b. decrease assets and increase expenses c decrease assets and increase revenues d. decrease expenses and increase assets Which is correct concerning the adjusted trial balance? a. An adjusted trial balance lists all ledger account balances separated by assets and liabilities. b. An adjusted trial balance is a method used to prove the accounting to date has been posted properly. c. An adjusted trial balance is prepared after adjusting entries have been journalized and posted. d. The balance sheet accounts in the adjusted trial balance have the proper financial statement amounts. 10. In a worksheet, the debit and credit columns listed in the Balance Sheet and Income Statement area: a. do not have debits equal credits, and the difference is the net income or net loss b. prove that debits equal credits c. prove the balance in owner's equity d. are formal financial statements 11. b. Which of the following is not an adjusting entry? The supplies used during the period. The cash payment on a note from the bank. The depreciation of equipment. The salaries owed but not yet paid. Which of the following accounts is a permanent account? Cash b. Salary expense Interest income Revenue Which of the following accounts is a temporary account? Cash Accounts Payable Capital Revenue 14. Which of the following is an adjusting entry? a. Accounts receivable is closed to reflect the amounts paid during the year. b. Depreciation on automobiles is $1,000 for the year. c. Revenues are closed to reflect the revenue earned but not yet received d. Capital is closed to reflect the withdrawals during the year. 15. Which of the following accounts is a closing entry? a. Accounts receivable is closed to reflect the amounts paid during the year. b. Salary expense is closed to reflect the salaries owed but not yet paid. c. Revenues are closed to allow an accurate account of annual revenue. d. Capital is closed to reflect the withdrawals during the year. What is the correct way to close expenses? Debit expenses and credit Capital. Debit Capital and credit expenses. Debit expenses and credit Income Summary. Debit Income Summary and credit expenses. b. What is the correct way to close withdrawals? Debit withdrawals and credit Capital. Debit Capital and credit withdrawals Debit withdrawals and credit Income Summary. Debit Income Summary and credit withdrawals. 18. The entry to close Income Summary a. depends on the total amount of revenues and total amount of expenses. b. is always a debit to Income Summary and a credit to Capital. c. is always a debit to Capital and a credit to Income Summary. d. never occurs. A post-closing trial balance only reflects the balance sheet accounts. only reflects the changes during the year. shows every account has a zero balance does not show total debits equal total credits. Which of the following is not true? a. All information from closing can be obtained from the worksheet or ledger. b. Closing entries are usually done only at year-end. c. Assets, liabilities, and capital are temporary accounts. d. When closing is complete, all revenue accounts will have a zero balance. 21. Which of the following should not be included in the bank reconciliation? outstanding checks at year end deposits in transit nonsufficient funds petty cash receipts 22. When preparing a bank reconciliation, which of the following will not result in a journal entry for the business? a. Deposit in transit b. Bank service charge previously recognized by the business c. Error made by the bank in recording the amount of a check deposited d. Error made by the business in recording the amount of a check deposited 23. When preparing a bank reconciliation, bank service charges are a. added to the balance per bank statement b. deducted from the balance per bank statement c. deducted from the balance per book d. added to the balance per book 24. Journal entries using the petty cash fund account b. changed occur when the fund is established and the balance occur each month never occur 25. When the cash drawer is short at the end of the day, Cash Short and Over is debited and sales is credited Cash Short and Over is debited and cash is credited c. Sales is debited and Cash Short and Over is credited d. Cash is debited and Cash Short and Over is credited BONUS When the petty cash fund is replenished, a. the expenses as described in the vouchers are debited cash per checking account is credited both a and b neither a norb b