1 Which of the following is/are the purpose of adjusting entries?

To update the accounts in the books

To apply the matching principle
To properly reflect the correct net income
To make the equation A=L+OE more accurate
All of the above
2. ___________ is defined as the systematic allocation of the cost of an asset over its useful life.
Accumulated Depreciation
Depreciation
Doubtful Accounts
Both a and b
3. The Unearned Revenue account is listed in the:
Statement of Financial Performance
Statement of Financial Position
Bank Statement
Statement of Changes in Equity

Accrual accounting involves all of the following except:

Recording all revenues when cash received
Applying the matching rule
Recognize expense when incurred
Adjusting the accounts
All of the above

Which of the following is an example of a deferral?

A. Apportioning costs between two or more periods
B. Recognizing an accrued expense
C. Recognizing an unearned revenue
D. Recognizing an accrued revenue
E. All of the above

Adjusting entries are used to:

A. Make financial statements from one period to the next more comparable
B.Make net income reflect cash flow
C.Correct errors in the recording of earlier transactions
D.Record initial transactions
E.None of the above

A purchase of office supplies that was recorded in the Office Equipment account would
require a correcting entry that:
A.Credits Office Supplies
B.Credits Cash
C.Debits Office Equipment
D.Credits Office Equipment
E.None of the above

Adjusting entries are made to ensure that:

A.Expenses are recognized in the period in which they are incurred
B.Revenues are recorded in the period on which they are earned
C.Balance sheet and income statement accounts have correct balances at the end of the
accounting period
D.All of the above

Adjustments for unearned revenues:

A.Decrease liabilities and increase revenues
B.Have an assets and revenues account relationship
C.Increase assets and increase revenues
D.Decrease revenues and decrease assets
E.B and D

The following statement/s about the accrual basis of accounting is/are false. That
statement is/are:
A.Events that change a company's financial statements are recorded in the period i which
the event's occur
B.Revenue is recognized in the period in which it is earned
C.This is basis is in accord with generally accepted accounting principles (GAAP)
D.Revenue is recorded only when cash is received, and expense is recorded only
when cash is paid