Question

1. Which of the following accounts’ balance would be a different number on the Balance Sheet...

1. Which of the following accounts’ balance would be a different number on the Balance Sheet than it is on the adjusted trial balance?

a. retained earnings

b. accumulated depreciation

c. unearned service revenue

d. dividends

2. Which of the following is the federal, independent agency that provides oversight of public companies to maintain fair representation of company financial activities for investors to make informed decisions?

a. SEC (Securities and Exchange Commission)

b. IRS (Internal Revenue Service)

c. FASB (Financial Accounting Standards Board)

d. FDIC (Federal Deposit Insurance Corporation)

3. Which type of adjustment occurs when cash is either collected or paid, but the related income or expense is not reportable in the current period?

a. deferral

b. accrual

c. estimate

d. cull

4. Which of these transactions requires an adjusting entry (debit) to Unearned Revenue?

a. revenue collected before being earned, when it is later earned

b. revenue earned but not yet collected

c. revenue collected but not yet earned

d. revenue earned before being collected, when it is later collected

5. What critical purpose does the adjusted trial balance serve?

a. It is the source document from which to prepare the financial statements

b. It proves that transactions have been posted correctly

c. It shows the beginning balances of every account, to be used to start the new year’s records

d. It proves that all journal entries have been made correctly.

Business   Accounting   
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Homework Answers

Answer #1

1.
Answer is a. retained earnings
revenue, expenses and dividends is transferred to retained earnings on closing

2.
Answer is a. SEC (Securities and Exchange Commission)

3.
Answer is a. Deferral
Cash is paid or received and expense for same and revenue is deferred to next period.

4.
Answer is a. revenue collected before being earned, when it is later earned
When cash is received in advance it is recorded as unearned revenue and later recorded as revenue when it is earned

5.
Answer is a. It is the source document from which to prepare the financial statements
Financial statements are prepared from adjusted trial balance

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