Adjusting Entries

Adjusting entries are necessary because accounts are allowed to become inaccurate between financial statement dates.

• True

• False

Whenever supplies are used (like a paper clip from a supply drawer), the Supplies Expense should immediately be debited.

• True

• False

A post-closing Trial Balance (which is done after closing entries) includes no Revenue or Expense accounts.

• True

• False

The Accumulated Depreciation account is decreased when it is credited.

• True

• False

The source of data for preparing closing entries is the:

• trial balance

• worksheet

• worksheet plus general journal

• all of the above are possible

When all closing entries have been posted, a net income will be shown on the:

• credit side of the Drawings account

• debit side of the Capital account

• credit side of the Capital account

• debit side of the Drawings account

Which of the following is NOT closed out at the end of the accounting period?

• Wages

• Accounts Receivable

• Bank Charges

• Loss on Sale of Equipment

Which of the following are temporary accounts?

• Accounts Receivable, Accounts Payable

• Fees Earned, Drawings

• Capital, Drawings

• Bank Loan, Mortgage Payable

Using the declining balance method of depreciation, calculate the depreciation (30%) for a Truck bought for $65,000 on January 1st of the current year if it is now March 31st.

• $19,500

• $1,626

• $4,875

• $9,750

The Accumulated Depreciation account is known as a "contra" account because even though it is a ____________ account, it has a ________________ balance.

• asset, credit

• liability, debit

• asset, debit

• liability, credit