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

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

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

A red Dodge Viper was bought on July 1 of the current year for $180,000. It is expected to last 20 years with 0 Salvage Value. Calculate the amount of depreciation as of December 31st of the current year using the straight line method of depreciation.

• $4500

• $9000

• $54,000

• $2,700

We purchased Indian Insurance (Prepaid Insurance) on June 1st, 2020 for $252. What is the Insurance Expense as of December 31, 2020?

• $105

• $50.40

• $147

• none of the above

Unearned revenue is a(n) _________________ account.

• Revenue

• Expense

• Asset

• Liability