Pop Quiz Trial Bal & Adjusting Entries

Creating financial statements starts with the _________

• Trial balance

• Adjusted trial balance

• Balance sheet

• Income statement

When are financial statements created? (Mark All)

• End of month

• End of quarter

• End of year

• End of day

_________ is a complete list of every general ledger account and its current balance.

• Unadjusted trial balance

• Chart of accounts

• Adjusted trial balance

• General ledger

Why are adjusting entries made?

• To make sure we are in compliance with accrual accounting

• To make sure accounts are in balance

• To make sure income equals expenses

• To make sure GAAP is followed each month

When are adjustments made to the trial balance?

• Before financial statements are created.

• After financial statements are created.

• Before the adjusted trial balance

• After the adjusted trial balance

Which accounts are subject to depreciation?

• Assets that provide a benefit beyond one year.

• Assets that provide a benefit beyond one month.

• Assets that provide a benefit less than one year.

• Assets that provide a benefit less than one month.

If depreciation totals $6,000 and we need to calculate 5 months of depreciation expense, what is the correct formula?

• $6,000 x 5/12

• $6,000 / 5/12

• $6,000 + 5/12

• $6,000 - 5/12

Which types of expenses must be adjusted? (MARK ALL)

• Salaries that have not been paid

• Depreciation of equipment

• Tax expenses

• Office expenses

Which types of revenue must be adjusted?

• Revenue that has not been earned.

• Revenue that has been discounted

• Revenue that is already posted

• Revenue that has been returned

Which parts of a mortgage loan are recognized as a current liability? (Mark all)

• The monthly mortgage payment

• The monthly interest payment

• The full mortgage balance

• The full interest balance