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Adjusting Entries

Total questions: 20

Worksheet time: 21mins

Name
Class
Date
1.
Refer to the expenses that are already incurred, used, utilized or consumed but have not yeen been paid.
a)
Prepaid Expenses
b)
Unearned Expenses
c)
Accrued Expenses
d)
Accounts Expense
2.
Refer to income or revenue already earned but has not yet been collected. 
a)
Unearned Revenue
b)
Accrued Income
c)
Prepaid Income
d)
Service Revenue
3.
Represent advance payments made for expenses which have not yet been incurred, used, utilized or consumed.
a)
Accrued Expenses
b)
Unearned Expenses
c)
Prepaid Expenses
d)
Accounts Expense
4.
The accounting concept which states that income is recognized when earned regardless of when collected and expense is recognized when incurred regardless of when paid. 
a)
Matching Principle
b)
Time Period
c)
Accrual
d)
Deferral
5.
Adjusting entries are necessary to
a)
Update and correct the accounts at the end of the period
b)
balance the books at the end of the period
c)
record the sales of the period
d)
ensure the equality of the debits and credits
6.
The adjusting entry to record an accrued revenue results in which of the following types of accounts being debited and credited?
a)
Asset/Revenue
b)
Asset/Liability
c)
Expense/Asset
d)
Expense/Liability
7.
Office Equipment was purchased on May 1, 2017 at a cost of P 140,000 with a salvage value of P 20,000. The equipment’s useful life is five years. How much is the depreciation expense on December 31, 2017.
a)
Php 24,000
b)
Php 10,000
c)
Php 16,000
d)
Php 28,000
8.
On September 1, 2017, the company collected  P72,000 rent in advance. A debit to Cash and a credit to Unearned Revenue was made. The tenant was paying for one year's rent. How much is the Rental Revenue to be recorded in the adjusting entry on Dec. 31, 2017?
a)
Php 6,000
b)
Php 24,000
c)
Php 30,000
d)
Php 36,000
9.
CHS Hardware borrowed  P 120,000 at 12% interest on February 1, 2017. The amount will be paid after 1 year. No entry was entered in the journal to take up the interest. How much is the interest expense to be recorded on Dec. 31, 2017. 
a)
Php 14,400
b)
Php 10,800
c)
Php 12,000
d)
Php 13,200
10.
On October 1, 2017 the company paid P 18,000 for a one-year insurance policy. Insurance Expense was debited and Cash was credited. The account to be debited and its amount to be recorded on Dec. 31, 2017 is
a)
Insurance Expense/ Php 13,500
b)
Prepaid Insurance/ Php 13,500
c)
Insurance Expense/  Php 4,500
d)
Prepaid Insurance/  Php 4,500
11.
On Nov. 1, 2017, Ms. Cruz, owner of Labada Express, received  P 60,000 as advance payment from Hotel Dolores for laundry of assorted garments. Assuming, 60% of the unearned revenue has been rended on Dec. 31, 2017, what is the account to be credited and its amount? 
a)
Unearned Revenue/ Php 36,000
b)
Laundry Revenue/ Php 36,000
c)
Unearned Revenue/ Php 24,000
d)
Laundry Revenue/ Php 24,000
12.

Which of the following are temporary accounts?

a)

Accounts Receivable, Accounts Payable

b)

Fees Earned, Drawings

c)

Capital, Drawings

d)

Bank Loan, Mortgage Payable

13.

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

a)

asset, credit

b)

liability, debit

c)

asset, debit

d)

liability, credit

14.

At the beginning of Year 1, the Supplies account had a debit balance of P2,300. During the year, the business purchased P900 of supplies. An inventory count at the end of the year revealed that $650 of supplies remained. The adjusting entry as a result of this information is:

a)

DR Supplies Expense P1,650, credit Supplies P1,650

b)

DR Supplies Expense P3,850, credit Accumulated Depreciation -Supplies P3,850

c)

DR Supplies Expense P750, credit Supplies P750

d)

DR Supplies Expense P2,550, credit Supplies P2,550

15.

Which of the following statements concerning the Accumulated Depreciation account is false?

a)

it appears on the balance sheet

b)

it is an asset account

c)

it has a credit balance

d)

it is closed at the end of the fiscal period

16.

Which of the following is NOT a type of adjusting entry?

a)

Prepaid expenses

b)

Accrued expenses

c)

Unearned revenue

d)

Unearned expenses

17.

Which of the following is TRUE about the allowance for doubtful accounts?

a)

It is always equal to bad debts expense

b)

It is never equal to bad debts expense

c)

It will always be less than accounts receivable

d)

It will never be less than the accounts receivable

18.

Which of the following do NOT have a negative effect on the owner's capital?

a)

Depreciation expense

b)

Adjusting entry for unearned revenue

c)

Owner's drawings

d)

Payment of liabilities

19.

Which of the following is NOT a method of estimating doubtful accounts?

a)

Double-declining method

b)

Percentage of Accounts Receivable

c)

Percentage of Sales

d)

Aging of Accounts Receivable

20.

On May 1, 2020, Lappy Services received a Php450,000, 9% note for selling an equipment not being used by the business anymore. The note is payable in 2 years. How much is the accrued interest income?

a)

Php2,700

b)

Php27,000

c)

Php40,500

d)

None

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