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College Accounting

John Price, University of North Texas
M. David Haddock, Chattanooga State Technical Comm. College
Horace Brock, University of North Texas
Connie Hahn, Southern Alberta Institute of Technology
Traven Reed, Canadore College

Adjusting Entries and Completing the Worksheet

True/False Questions


1	A prepaid expense incorrectly charged to expense in an accounting period results in an understatement of net income in that period and an overstatement of net income in the following period.
		A)	True
		B)	False


2	Accrued income has been earned but not received, while deferred income has been recorded but not earned.
		A)	True
		B)	False


3	The entry to record accrued interest on notes payable is a debit to Interest Payable and a credit to Interest Expense.
		A)	True
		B)	False


4	A prepaid expense account is classified as a liability on the balance sheet
		A)	True
		B)	False


5	Interest Receivable is classified as a revenue account
		A)	True
		B)	False


6	The Interest Expense account must be adjusted if an interest- bearing note payable is outstanding at the end of the fiscal period
		A)	True
		B)	False


7	To determine items to be adjusted, the first step is to examine each account in the trial balance to see whether the balance correctly reflects all the events of the accounting period.
		A)	True
		B)	False


8	The trial balance figures for accumulated depreciation accounts do not contain the depreciation for the current period.
		A)	True
		B)	False


9	Adjustments of income items that have not been previously recorded are not entered in the records since the amounts may not be collected.
		A)	True
		B)	False


10	An adjustment for Amortization results in an entry debiting the Amortization Expense account and crediting the Accumulated Amortization account.
		A)	True
		B)	False


11	If an expense item has not been entered in the accounting records, an adjusting entry is needed to account for the amount of the accrued expense involved.
		A)	True
		B)	False


12	The accountant completes the worksheet and prepares the financial statements as soon as all adjustments have been entered in the general ledger.
		A)	True
		B)	False

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