Not all adjusting entries are reversed. Only those that increased an asset or a liability account are to be reversed. True or False
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- A change in the expected service life of an asset arising because additional information has been obtained is: a. an accounting change that should be reported by restating the financial statements of all prior periods represented b. an accounting change that should be reported in the period of change and future periods if the change affects both c. a correction of an error d. not an accounting changeWhich of the following adjusting entries would most likely be reversed? Depreciation Unpaid Salaries Depreciation Bad expenseEnd of period adjusting entries are considered important due to which of the following? A.All the items on the Income statement are recorded correctly B.All the items on the Balance sheet are recorded correctly C.Asset balances are not overstated D.All of the other answers are correct E.Liability balances are not understand
- Which of the following is not a type of adjusting entry? a. Depreciation of long-term physical assets b. Allocation of unearned revenue c. Correction of an error in the general journal d. Recording of accrued revenueWhich of the following statements is incorrect? A. Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities. B. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded. C. Adjusting entries can be used to record both accrued expenses and accrued revenues. D. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time.Which of the following is not accomplished by an adjusting entry? A. Updating liability and asset accounts to their proper balances. B. Assigning revenues to the periods in which they are earned. C. Assigning expenses to the periods in which they are incurred. D. Assuring that financial statements reflect the revenues earned and the expenses incurred.
- If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account,which of the following statements describes the effect of the debit portion of the entry?a. Increases the balance of a revenue account.b. Increases the balance of an expense account.c. Increases the balance of an asset account.Which of the following is not accomplished by an adjusting entry? A. Updating liability and asset accounts to their proper balances. B. Assigning revenues to the periods in which they are earned. C. Assigning expenses to the periods in which they are incurred. D. Assuring that financial statements reflect the revenues earned and the expenses incurred. E. Assuring that external transaction amounts remain unchanged.If the adjusting entry is not made for unearned revenues, the result will be: A. Overstate assets and understate liabilities B. Overstate liabilities and understate revenue C. Understate net income and overstate owner’s equity D. Understate owner’s equity and overstate revenue
- A company fails to recognize an expense incurred but not paid. In dicate which of the following accounts is debited and which is credited in the adjusting entry: (a) asset, (b) liability, (c) revenue, or (d) expense.Which of the following statements is false? Adjusting entries are necessary because timing differences exist between when a revenue or expense is recognized and cash is received or paid. Adjusting entries always affect at least one revenue or expense account and one asset or liability account. The cash account will always be affected by adjusting journal entries. Adjusting entries can be classified as either accruals or deferrals.Which of the following statements is incorrect? A. Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities. B. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded. C. Adjusting entries can be used to record both accrued expenses and accrued revenues. D. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time. E.Adj usting entries affect only balance sheet accounts.