Adjustment Entries I (1-10)

1. Every adjusting entry affects?

(a) Income statement account only

(b) Balance sheet account only

(c) Both A & B

(d) None

Correct! Wrong!

2. If a business pays for only 11 months rent during a financial year, what accounting term is given to the outstanding one month's rent?

(a) Repayment

(b) Prepayment

(c) Underpayment

(d) Payable

Correct! Wrong!

3. The record of such transactions in the book of prime entry is called?

(a) Adjustments

(b) Trial balance

(c) Ledger

(d) Income Statement

Correct! Wrong!

4. Adjusting Entries?

(a) Assign revenue to the period in which they are earned

(b) Help to properly measure the period’s Net Profit / Loss

(c) Bring asset and liability account to correct balances

(d) All of about statements are true regarding Adjusting Entries

Correct! Wrong!

5. A balance of unearned rent at the end of period represents?

(a) An asset

(b) An expenses

(c) A liability

(d) Revenue

Correct! Wrong!

6. Which one of the following is an example of unearned income?

(a) Cash paid to supplier

(b) Advanced received from bank

(c) Advanced received from a customer for a purchase order place by him

(d) Cash discount received from customer

Correct! Wrong!

7. The portion of cost expires during a year is?

(a) Cost

(b) Expense

(c) Expenditure

(d) None

Correct! Wrong!

8. Which of the following is not an adjusting entry?

(a) Debit unearned revenue; credit revenue

(b) Debit insurance expense; credit pre-paid insurance

(c) Debit cash; credit unearned revenue

(d) Debit wages expense; credit wages payable

Correct! Wrong!

9. A liability account that reports amounts received in advance of providing goods and services?

(a) Unearned Revenue

(b) Earned liabilities

(c) Earned Revenue

(d) Revenue

Correct! Wrong!

10. Which of the following entries records the utility bill incurred but not paid from the water company?

(a) Debit Utilities Expense; credit Utilities Payable

(b) Debit Accounts Payable; credit Utilities Payable

(c) Debit Accounts Payable; credit Cash

(d) Debit Utilities Payable; credit Accounts Receivable

Correct! Wrong!

1. Every adjusting entry affects?

2. If a business pays for only 11 months rent during a financial year, what accounting term is given to the outstanding one month's rent?

3. The record of such transactions in the book of prime entry is called?

4. Adjusting Entries?

5. A balance of unearned rent at the end of period represents?

6. Which one of the following is an example of unearned income?

7. The portion of cost expires during a year is?

8. Which of the following is not an adjusting entry?

9. A liability account that reports amounts received in advance of providing goods and services?

10. Which of the following entries records the utility bill incurred but not paid from the water company?

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