21 every adjusting entry must affect both the income statement and the balance sheet 4298000
21) Every adjusting entry must affect both the income statement and the balance sheet.
22) Adjusting entries are:
A) not needed under the accrual basis of accounting.
B) prepared at the option of the accountant.
C) prepared at the beginning of the accounting period to update all accounts.
D) prepared at the end of the accounting period to update certain accounts.
23) The following accounts are up-to-date and need no adjustment at the end of the period:
A) cash, common stock and prepaid rent.
B) prepaid rent, supplies and unearned rent.
C) cash, dividends and common stock.
D) cash, dividends and unearned rent.
24) Adjusting entries:
A) close the revenue accounts.
B) close the expense accounts.
C) adjust cash.
D) adjust unearned revenue.
25) Adjusting entries:
A) are needed for all balance sheet accounts.
B) must be made on a daily basis to record supplies used during that day.
C) are needed because errors have been made in previous journal entries.
D) are made before the financial statements can be prepared.
26) When determining the adjusting entries that may be needed:
A) prepaid rent requires an accrual adjustment.
B) a deferral is an adjustment for payment of an item in advance.
C) a deferral is an adjustment for the receipt of cash after the service has been performed.
D) unpaid salaries requires a deferral adjustment.
27) Prepaid expenses will:
A) become expenses when their future benefits expire.
B) become revenues when their future benefits expire.
C) become liabilities when their future benefits expire.
D) become assets when their future benefits expire.
28) When determining adjusting entries that may be needed:
A) there can be deferral adjustments for assets.
B) there can be deferral adjustments for liabilities.
C) there can be accrual adjustments for revenues.
D) all of the above.
29) The deferral adjustment for liabilities:
A) records the amount of the asset used up during the period.
B) records the amount of revenue earned for the period.
C) increases a liability account.
D) decreases an asset account.
30) ________ is the allocation of the cost of an asset over the asset's useful life.