achivmt test answ3

7/25/2019 Achivmt Test Answ3

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9th Edition

Financial and

Managerial AccountingWarren/Reeve

Chapter Test 3A

A


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TEST 3A (Concluded)

FILL-IN-THE-BLANKPRINCIPLES AND TERMINOLOGY

INSTRUCTIONS:Complete each of the following statements by writing the appropriate words in the Answers column.

For

Answers Scoring

0. The accounting principle that requires the matching of revenues andexpenses is called the ................................................................................ matching concept 0. ____

1. The expense associated with the decrease in economic usefulness of afixed asset with the passage of time is ...................................................... 1. ____


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2. Accumulated depreciation accounts that are offset against fixed assetaccounts are ............................................................................................... 2. ____

3. The process of posting adjusting and closing entries in the ledger at theend of an accounting period is called the .................................................. 3. ____

4. The journal entries at the end of the accounting period to properly matchrevenues and expenses are called ...........................................................

4. ____

5. Payments that have been initially recorded as assets but are expected tobecome expenses through the normal operations of the business arecalled .......................................................................................................... 5. ____


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TEST 3A (Concluded)

6. Revenues that have been earned but have not been recorded in theaccounts are called .................................................................................... 6. ____

PROBLEM 1ADJUSTING ENTRIES

INSTRUCTIONS:Indicate the accounts to be debited and credited in recording the selected transactions described

below by inserting the letter designations in the appropriate columns.

A.Accounts Receivable F.Fees Earned K.Rent Revenue O.Supplies Expense

B.Accumulated Depreciation G.Land L.Salaries Expense P.Taxes Expense


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C.Advertising Expense H.Prepaid Advertising M.Salaries Payable Q.Taxes Payable

D.Depreciation Expense I.Prepaid Rent N.Supplies R.Unearned Fees

E.Equipment J.Rent Expense

For For

DESCRIPTIONS Debit Scoring Credit Scoring

0.Adjust for rent accrued at the end of the period on property rentedto others .................................................................................................... A 0. ____ K 0. ____

1-2.Adjust for the cost of supplies used during the period ............................. 1. ____ 2. ____

3-4.Adjust for salaries accrued at the end of the period ................................ 3. ____ 4. ____


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TEST 3A (Concluded)

5-6.Adjust for depreciation of equipment for the period ................................. 5. ____ 6. ____

7-8.Adjust for the rent expired for the period .................................................. 7. ____ 8. ____

9-10.Adjust for prepaid advertising expired during the period .......................... 9. ____ 10. ____

11-12.Adjust for taxes accrued at the end of the period .................................... 11. ____ 12. ____

13-14.Adjust for fees collected in advance and now earned .............................. 13. ____ 14. ____


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PROBLEM 2PROBLEMS

INSTRUCTIONS:Solve the following problems and record the answers in the Answers column. Circle over or under

when applicable.

ForAnswers Scoring

0. If the unearned rent account has a balance of $9,000, representingreceipt of three months rent beginning on December 1, the rent revenuefor December is ............................................................................................ $3,000 0. ____


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TB1-56

TEST 1A (Concluded)

1. The amount reported as a liability at December 31, based on the data inQuestion 0, is ................................................................................................ 1. ____

2-7.The adjusting entry to record depreciation expense at the end of thecurrent year was not made. Indicate the effect of the omission(overstated, understated, or not affected) on each of the following:

2. Revenues for the current year ...................................................................... 2. ____

3. Expenses for the current year ...................................................................... 3. ____

4. Net income for the current year .................................................................... 4. ____

5.Total assets at the end of the current year ................................................... 5. ____

6.Total liabilities at the end of the current year ................................................ 6. ____


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7.Total owners equity at the end of the current year ...................................... 7. ____

8.The net income reported on the income statement is $65,000. However,adjusting entries have not been made at the end of the period fordepreciation expense of $15,000 and accrued fees earned of $4,500.Net income, as corrected, is ......................................................................... $ 8. ____

9-11.If the errors in Question 8 are not discovered and corrected, the effect onthe financial statements will be as follows:

9.Total owners equity will be misstated (overstated or understated) by .........over $under$ 9. ____

10.Total revenues will be misstated (overstated or understated) by ..................over $under$ 10. ____


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TB1-58

TEST 1A (Concluded)

11.Total assets will be misstated (overstated or understated) by ......................over $under$ 11. ____

12.If the balance in the supplies account on January 1 is $13,500, suppliespurchased during the last 12 months were $15,500, and the supplieson hand at December 31 were $13,000, the amount for the appropriateadjusting entry at December 31 is ................................................................ $ 12. ____

13. The amount of supplies reported on the balance sheet at December 31,based on the data in Question 12, is ............................................................ $ 13. ____

14.If the prepaid insurance account has a debit balance of $11,600 at theend of the month, before adjustment, and if the unexpired insuranceat the end of the month was $2,600, the amount of prepaid insurance


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that would appear on the balance sheet, after adjustment, is ..................... $ 14. ____

15-20.If the adjusting entry for supplies used is not recorded at the endof a year, how will the following be affected at the end of the year?(Answer using one of the following: not affected, overstated, orunderstated.)

15. Assets at end of year .................................................................................... 15. ____

16. Liabilities at end of year ................................................................................ 16. ____

17.Owners equity at end of year ....................................................................... 17. ____

18. Revenues for year ......................................................................................... 18. ____

19. Expenses for year ......................................................................................... 19. ____


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TB1-60

TEST 1A (Concluded)

20. Net income for year ...................................................................................... 20. ____

ACHIEVEMENT TEST SOLUTIONSCHAPTER 3

TEST 3A

Fill-in-the-Blank

Principles and Terminology


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1.depreciation

2.contra (asset) accounts

3.adjusting process

4.adjusting entries

5.prepaid (deferred) expenses

6.accrued revenues (assets)

Problem 1

Adjusting Entries


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TB1-62

TEST 1A (Concluded)

Debit Credit

1. O 2. N

3. L 4. M

5. D 6. B

7. J 8. I

9. C 10. H

11. P 12. Q

13. R 14. F


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Problem 2

Problems

1.$6,000

2.not affected

3.understated

4.overstated

5.overstated

6.not affected


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TB1-64

TEST 1A (Concluded)

7.overstated

8.$54,500

9.over $10,500

10.under $4,500

11.over $10,500

12.$16,000

13.$13,000

14.$2,600

15.overstated

16.not affected


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17.overstated

18.not affected

19.understated

20.overstated


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TB1-66

TEST 1A (Concluded)

TEST 3B

Fill-in-the-Blank

Principles and Terminology

1.book value

2.cash basis

3.adjusting process

4.unearned (deferred) revenues

5.accrued expenses (liabilities)

6.contra (asset) accounts


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TB3-67

Problem 1

Adjusting Entries

Debit Credit

1. P 2. Q

3. C 4. B

5. J 6. G

7. M 8. L


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TB1-68

TEST 1A (Concluded)

9. A 10. K

11. A 12. I

13. O 14. K

Problem 2

Problems

1.$2,500

2.$2,000


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TB3-69

3.$5,500

4.$30,000

5.over $10,000

6.under $5,000

7.over $15,000

8.$13,450

9.not affected

10.understated

11.overstated

12.overstated


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TEST 1A (Concluded)

13.not affected

14.overstated

15.understated

16.not affected

17.understated

18.understated

19.not affected

20.understated

achivmt test answ3

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