MASTERINGADJUSTINGENTRIES

TESTBANK

Section1WHYWEUSEACCRUALS,DEFERRALSANDOTHER
ADJUSTMENTS

1. Inaccrualaccounting,anexpenseisrecognizedwhenitis:
a. paid
b. postedtothegeneralledger
c. incurred
d. eitherborc

2. Incashbasisaccounting,anexpenseisrecognizedwhenitis:
a. paid
b. postedtothegeneralledger
c. incurred
d. eitherborc

3. Inaccrualbasisaccounting,revenueisrecognizedwhenitis:
a. received
b. earned
c. postedtothegeneralledger
d. eitherborc

4. Incashbasisaccounting,revenueisrecognizedwhenitis:
a. received
b. earned
c. postedtothegeneralledger
d. eitherborc

5. OnDecember1,20X1,yourcalendaryearfirmreceives$12,000in
advanceforworktobeperformedevenlyoverthenext12months.
Underthecashandaccrualmethods,respectively,thisrevenuewillbe
reportedonthe20X1incomestatementas:
a. $1,000and$1,000
b. $12,000and$12,000
c. $1,000and$12,000
d. $12,000and$1,000

6. Thetwotypesofadjustingentriesare:
a. cashandrevenue
b. debitandcredit
c. accrualanddeferral
d. deferralandprepayment
7. Adjustingentries:
a. neverincludeacashaccount
b. aremadewhentherehavebeenprepaymentsduringtheyear

Testbank 1
MasteringAdjustingEntries
c. maybenecessarywhenrevenuehasbeenearnedinoneperiodbut
receivedinanother
d. alloftheabove

AmericanInstituteofProfessionalBookkeepers,2010

Section2ACCRUEDREVENUE

1. Accruedrevenueis:
a. paymentreceivedforworkcompleted
b. revenueearnedbutnotreceived
c. adebittocash
d. acredittocash

2. Thejournalentrytoaccrue$500commissionsrevenueis:
a. Cash 500
CommissionsRevenue 500
b. CommissionsRevenue 500
Cash 500
c. CommissionsRevenue 500
AccountsReceivable 500
d. AccountsReceivable 500
CommissionsRevenue 500

3. Severalyearsago,yourcalendaryearcompanyissueda$15,000noteat
8%ayearinterestdueeachJuly31.Ifnointerestisreceivedthisyear,
whatjournalentrydoyourecordatyearend?
a. InterestReceivable 500
DeferredRevenue 500
b. InterestReceivable 1,200
DeferredRevenue 1,200
c. InterestReceivable 1,200
InterestRevenue 1,200
d. InterestReceivable 500
InterestRevenue 500

4. Asofyearend,yourfirmwasowed$4,000forworkcompleted,buthad
receivedonly$1,500,thatyoudebitedtoRevenue.Bywhatamount
mustthebalanceinRevenuebeadjustedatyearend?
a. $4,000
b. $1,500
c. $2,500
d. $0

5. Yourcompanyperformsworkforacustomer,butasofyearend,has
receivednopayment.Ifyoudonotrecordanadjustingentryatyearend,
howwillthefinancialstatementsbeaffected?

Testbank 2
MasteringAdjustingEntries
Netincome Assets Liabilities
a. overstated notaffected understated
b. overstated overstated notaffected
c. understated notaffected overstated
d. understated understated notaffected

Testbank 3
MasteringAdjustingEntries
Section3ACCRUEDEXPENSES(ACCRUEDLIABILITIES)

1. Yourcompanyhasa5dayworkweekwithaweeklypayrollof$20,000
distributedeachFriday.IfanaccountingperiodendsonaTuesday,the
adjustingjournalentryis:
a. SalaryExpense 4,000
SalaryPayable 4,000
b. SalaryExpense 8,000
SalaryPayable 8,000
c. AccruedSalary 8,000
SalaryPayable 8,000
d. DeferredSalary 4,000
SalaryPayable 4,000

2. IfacompanyreceivesaDecemberelectricbillfor$1,000anddecidesto
payitinJanuary:
a. noadjustmentisrequired
b. thecompanymustrecordajournalentrythatdebitsUtilities
ExpenseandcreditsUtilitiesExpensePayable
c. thecompanymustrecordajournalentrythatdebitsanasset
accountandcreditsanexpenseaccount
d. noneoftheabove

3. Yourcompanyhasa5dayworkweekandaweeklypayrollof$35,000
thatitdistributeseachFriday.Whenanaccountingperiodendsona
Thursday,whichofthefollowingentrieswillyourecord?
a. SalaryPayable 14,000
SalaryExpense 14,000
b. SalaryExpense 14,000
SalaryPayable 14,000
c. SalaryPayable 28,000
SalaryExpense 28,000
d. SalaryExpense 28,000
SalaryPayable 28,000

4. OnNovember1,yourcalendaryearfirmreceivesa$5,000invoicefor
magazineadsthatwillrunforthenext5months.Ifyouremit$1,000on
November1anddebitAdvertisingExpense,thenpaytheremainderin
January,whichofthefollowingentrieswillyourecordatyearend?
a. AdvertisingExpense 1,000
Cash 1,000
b. AdvertisingExpense 2,000
AdvertisingPayable 2,000
c. AdvertisingExpense 1,000
AdvertisingPayable 1,000
d. AdvertisingExpense 5,000
AdvertisingPayable 5,000

Testbank 4
MasteringAdjustingEntries

5. AcompanypaysitsemployeeseveryFriday.Thisyear,the
companysyearendsonaWednesday.Ifitdoesnottoaccruesalariesfor
theweek,howwillthefinancialstatementsbeaffected?
Netincome Assets Liabilities
a. overstated notaffected understated
b. overstated overstated notaffected
c. understated notaffected overstated
d. understated understated notaffected

6. OnAugust1,yourcompanytakesa$10,000notethatrequiresyourfirm
torepayprincipalandaccruedinterestof8%ayearattheendof4
years.Whichentryshouldyourecordattheendofthisyear?
a. InterestExpense 800
Cash 800
b. InterestExpense 333
InterestPayable 333
c. InterestExpense 800
InterestPayable 800
d. InterestExpense 467
InterestPayable 467

7. OnNovember1,20X4,yourecorda$20,000notereceivable,debiting
CashandcreditingNotesPayable.ThenotematuresonMay1,20X5
whenprincipalandaccruedinterestof6%ayearisdue.OnDecember31,
20X4,youradjustingentryforaccruedinterestwillinclude:
a. adebittoInterestPayablefor$400
b. adebittoInterestExpensefor$200
c. acredittoInterestPayablefor$400
d. noneoftheabove

Section4REVENUECOLLECTEDINADVANCE(UNEARNED
REVENUE)

1. Acompanycollectspaymentinadvance,debitingCashandcrediting
Revenue.Atyearend,anadjustingentry:
a.isnotrequiredifalltheadvancepaymenthasbeenearned
b.mayneedtodebitRevenue
c.mayneedtodebitUnearnedRevenue
d.bothaandb

2. OnSeptember1,yourcalendaryearcompanyrentsamachinetoanother
firmfor$24,000ayear.AsofDecember31,$17,000hasbeenreceivedand
recordedinRentRevenue.Whatadjustingentrydoyourecordatyearend?
a. RentRevenue 9,000
UnearnedRentRevenue 9,000
b. RentRevenue 8,000
UnearnedRentRevenue 8,000

Testbank 5
MasteringAdjustingEntries
c. RentRevenue 9,000
AccountsReceivable 9,000
d. UnearnedRentRevenue 8,000
RentRevenue 8,000

3. OnSeptember1,yourcalendaryearcompanyrentsamachineto
anotherfirmfor$24,000ayear.If,atyearend,$15,000hasbeen
receivedandrecordedinRentRevenue,whatadjustingentrydoyou
recordatyearend?
a. RentRevenue 8,000
UnearnedRentRevenue 8,000
b. UnearnedRentRevenue 7,000
RentRevenue 7,000
c. UnearnedRentRevenue 8,000
RentRevenue 8,000
d. RentRevenue 7,000
UnearnedRentRevenue 7,000

4. Yourcompanyreceivesa$40,000advancefora$125,000paintingjob
andyoucreditPaintingRevenue.If,atyearend,14%ofthejobhasbeen
completed,whatadjustingentrywillyourecord?
a. PaintingRevenue 22,500
Cash 22,500
b. UnearnedPaintingRevenue 22,500
Cash 22,500
c. PaintingRevenue 22,500
UnearnedPaintingRevenue 22,500
d. UnearnedPaintingRevenue 22,500
PaintingRevenue 22,500

5. Yourcompanyreceivesa$75,000advancefor1year'srentthatyou
recordinRentReceivedInAdvance.If,atyearend,3monthshave
elapsed,whatadjustingentrywillyourecord?
a. RentRevenue 18,750
RentReceivedinAdvance 18,750
b. RentRevenue 56.250
RentReceivedinAdvance 56.250
c. RentReceivedinAdvance 18,750
RentRevenue 18,750
d. RentReceivedinAdvance 56,250
RentRevenue 56,250

6. OnOctober11,yourfirmreceivesa$7,500downpaymenttowarda
$15,000videoyourfirmwillproduce,andyoubookitinUnearned
Revenue.If,atyearend,20%oftheworkiscompleted,whatadjusting
entrywillyourecord?
a. UnearnedRevenue 3,000

Testbank 6
MasteringAdjustingEntries
Revenue 3,000
b. Cash 3,000
Revenue 3,000
c. Revenue 3,000
UnearnedRevenue 3,000
d. UnearnedRevenue 1,500
Revenue 1,500

7. OnApril1,acompanytakesonan18monthjobandreceivesa$10,000
advancethatisrecordedinRevenue.Ifnoadjustingentryismadeat
yearend,howwillthefinancialstatementsbeaffected?
Netincome Assets Liabilities
a. overstated notaffected understated
b. overstated overstated notaffected
c. understated notaffected overstated
d. understated understated notaffected

8. OnApril1,acompanytakesonan18monthjobandreceivesa$10,000
advancethatisrecordedinUnearnedRevenue.Ifnoadjustingentryis
madeatyearend,howwillthefinancialstatementsbeaffected?
Netincome Assets Liabilities
a. overstated notaffected understated
b. overstated overstated notaffected
c. understated notaffected overstated
d. understated understated notaffected

Section5PREPAID(DEFERRED)EXPENSES

1. Yourfirmbuys$27,000ofofficesuppliesanddebitsSuppliesExpense.
If,atyearend,$6,000ofsuppliesareonhand,whatadjustingentrywill
yourecord?
a. SuppliesOnHand 6,000
SuppliesExpense 6,000
b. SuppliesOnHand 21,000
SuppliesExpense 21,000
c. SuppliesExpense 21,000
SuppliesOnHand 21,000
d. SuppliesExpense 6,000
SuppliesOnHand 6,000

2. Yourcompanyprepays$15,000fora1yearinsurancepolicythatyou
recordedinPrepaidInsurance.Whenthefiscalyearends3months
later,whatadjustingentrywillyourecord?
a. PrepaidInsurance 11,250

Testbank 7
MasteringAdjustingEntries
InsuranceExpense 11,250
b. PrepaidInsuranc1e 3,750
InsuranceExpense 3,750
c. InsuranceExpense 11,250
PrepaidInsurance 11,250
d. InsuranceExpense 3,750
PrepaidInsurance 3,750

Testbank 8
MasteringAdjustingEntries

3. OnOctober1,yourcalendaryearcompanysignsa$20,000contractto
haveitsofficespaintedandmakesadownpaymentof$14,000thatyou
recordedinPaintingExpense.If,onDecember31,managementinforms
youthat25%oftheworkhasbeencompleted,whatadjustingentrywill
yourecord?
a. adebittoPaintingExpensefor$5,000
b. acredittoPaintingExpensefor$9,000
c. adebittoPaintingExpensefor$9,000
d. acredittoPaintingExpensefor$5,000

4. Yourcalendaryearcompanypays$12,000ayearforsecurityservices.
OnNovember1,youremitpaymentforthenext3months'serviceand
recorditinPrepaidSecurityExpense.Atyearend,whatadjustingentry
willyourecord?
a. PrepaidSecurityExpense 1,000
SecurityExpense 1,000
b. SecurityExpense 2,000
PrepaidSecurityExpense 2,000
c. SecurityExpense 3,000
PrepaidSecurityExpense 3,000
d. PrepaidSecurityExpense 1,000
Cash 1,000

5. OnSeptember1,yourcalendaryearcompanypays$12,000for1years
rentthatyoudebittoPrepaidRent.Atyearend,whatadjustingentry
willyourecord?
a. PrepaidRent 4,000
RentExpense 4,000
b. RentExpense 4,000
Cash 4,000
c. RentExpense 4,000
PrepaidRent 4,000
d. PrepaidRent 8,000
RentExpense 8,000

6. InJune,yourcalendaryearcompanypays$1,200fora1yearinsurance
policythatyourecordedinPrepaidInsurance.Ifyoudonotrecordan
adjustingentryatyearend,howwillthefinancialstatementsbe
affected?
Netincome Assets Liabilities
a. overstated notaffected understated
b. overstated overstated notaffected
c. understated notaffected overstated
d. understated understated notaffected

Testbank 9
MasteringAdjustingEntries

7. InOctober,yourcalendaryearcompanypays$1,200for1yearsrent
thatyourecordedinRentExpense.Ifyoudonotrecordanadjusting
entryatyearend,howwillthefinancialstatementsbeaffected?
Netincome Assets Liabilities
a. overstated notaffected understated
b. overstated overstated notaffected
c. understated notaffected overstated
d. understated understated notaffected

8. InJuly,yourcalendaryearcompanypays$1,200for1yearsinsurance
thatyourecordedinPrepaidInsurance.Ifyoudonotrecordanadjusting
entryatyearend,howwillthefinancialstatementsbeaffected?
Netincome Assets
a. overstated overstated
b. overstated understated
c. understated overstated
d. understated understated

9. InApril,yourcalendaryearcompanypays$1,200for1yearsrentthat
yourecordedinPrepaidRent.Ifyoudonotrecordanadjustingentryat
yearend,howwillthefinancialstatementsbeaffected?
Netincome Assets
a. overstated overstated
b. overstated understated
c. understated overstated
d. understated understated

10. OnAugust1,20X8,yourcalendaryearfirmtakesouta3yearinsurance
policyatatotalcostof$3,600thatrequiresa50%downpaymentand
theremainderafter6months.Insuranceexpensefor20X8is:
a. $500
b. $600
c. $1,200
d. $1,800

Section6OTHERENDOFPERIODENTRIES

1. Aplantassetwithanoriginalcostof$121,875andaresidualvalueof
$15,000hasausefullifeof9years.Underthestraightlinemethod,the
journalentrytorecordtheannualdepreciationexpenseis:
a. DepreciationExpense 13,542
AccumulatedDepreciation 13,542
b. DepreciationExpense 11,875
AccumulatedDepreciation 11,875
c. DepreciationExpense 10,250

Testbank 10
MasteringAdjustingEntries
FixedAsset 10,250
d. DepreciationExpense 1,625
AccumulatedDepreciation 1,625

2. CompanyAhasafixedassetwithanoriginalcostof$300,000,a
residualvalueof$25,000andausefullifeof10years.Thecompanyalso
haslandwithanoriginalcostof$1,000,000.Underthestraightline
method,thejournalentrytorecordtheannualdepreciationexpenseis:
a. DepreciationExpense 27,500
AccumulatedDepreciation 27,500
b. DepreciationExpense 30,000
FixedAsset 30,000
c. DepreciationExpense 26,000
AccumulatedDepreciation 26,000
d. DepreciationExpense 5,000
AccumulatedDepreciation 5,000

3. CompanyBestimatesbaddebtexpenseat2%ofcreditsales,whichwere
$610,000fortheyear.Thejournalentrytorecordbaddebtexpenseis:
a. BadDebtExpense 8,580
AllowanceforDoubtfulAccounts 8,580
b. AllowanceforDoubtfulAccounts 8,580
BadDebtExpense 8,580
c. BadDebtExpense 12,200
AllowanceforDoubtfulAccounts 12,200
d. AllowanceforDoubtfulAccounts 5,720
BadDebtExpense 5,720

4. If,atyearend,thebalanceinA/Ris$920,000,ofwhich5%isestimated
tobeuncollectible,andtheAllowanceforDoubtfulAccountshasacredit
balanceof$34,000,thejournalentrytorecordbaddebtexpenseis:
a. BadDebtExpense 46,000
AllowanceforDoubtfulAccounts 46,000
b. AllowanceforDoubtfulAccounts 46,000
BadDebtExpense 46,000
c. BadDebtExpense 12,000
AllowanceforDoubtfulAccounts 12,000
d. AllowanceforDoubtfulAccounts 12,000
BadDebtExpense 12,000

5. If,atyearend,thebalanceinA/Ris$525,000,ofwhich4%isestimated
tobeuncollectible,andtheAllowanceforDoubtfulAccountshasadebit
balanceof$7,000,thejournalentrytorecordbaddebtexpenseis:
a. BadDebtExpense 28,000
AllowanceforDoubtfulAccounts 28,000
b. AllowanceforDoubtfulAccounts 21,000
BadDebtExpense 21,000

Testbank 11
MasteringAdjustingEntries
c. BadDebtExpense 7,000
AllowanceforDoubtfulAccounts 7,000
d. AllowanceforDoubtfulAccounts 28,000
BadDebtExpense 28,000

6. YourcompanyestimatesbaddebtexpenseasapercentageofAccounts
Receivablethatwillbeuncollectible,whichcomesto$18,000forthe
currentyear.TheAllowanceforDoubtfulAccountshasacreditbalance
of$15,000.Ifnoadjustingentryisrecodedatyearend,howwillthe
financialstatementsbeaffected?
Netincome Assets
a. overstated overstated
b. overstated understated
c. understated overstated
d. understated understated

7. IfCompanyEhasafixedassetwithanoriginalcostof$95,000,auseful
lifeof8yearsandaresidualvalueof$13,000,thejournalentryfor
annualdepreciationunderthestraightlinemethodis:
a. DepreciationExpense 10,250
AccumulatedDepreciation 10,250
b. DepreciationExpense 11,875
AccumulatedDepreciation 11,875
c. AccumulatedDepreciation 11,875
DepreciationExpense 11,875
d. AccumulatedDepreciation 10,250
DepreciationExpense 10.250

8. CompanyFhasafixedassetwithausefullifeof5yearsandaresidual
valueof$22,000.Theassethadanoriginalcostof$152,000andthe
companyslandhadanoriginalcostof$750,000.Whatistheadjusting
entrytorecordannualdepreciationunderthestraightlinemethod?
a. DepreciationExpense 30,400
FixedAsset 30,400
b. DepreciationExpense 180,400
AccumulatedDepreciation 180,400
c. DepreciationExpense 26,000
AccumulatedDepreciation 26,000
d. AccumulatedDepreciation 176,000
DepreciationExpense 176,000

9. CompanyGhasafixedassetwithanoriginalcostof$73,000,auseful
lifeof6yearsandaresidualvalueof$8,000.Thejournalentrytorecord
CompanyGsannualdepreciationunderthestraightlinemethodis:
a. DepreciationExpense 12,167

Testbank 12
MasteringAdjustingEntries
AccumulatedDepreciation 12,167
b. AccumulatedDepreciation 12,167
DepreciationExpense 12,167
c. AccumulatedDepreciation 10,833
DepreciationExpense 10.833
d. DepreciationExpense 10,833
AccumulatedDepreciation 10,833

10. Youaregiventhefollowingdataforafixedasset:

Originalcost $31,000
Usefullife 9years
Residualvalue $4,000

Howdoyourecordannualdepreciationfortheassetunderthestraight
linemethod?
a. DepreciationExpense 444
FixedAsset 444
b. DepreciationExpense 3,000
AccumulatedDepreciation 3,000
c. AccumulatedDepreciation 3,444
DepreciationExpense 3,444
d. DepreciationExpense 3,444
AccumulatedDepreciation 3,444

11. ThedataforafixedassetownedbyCompanyHisasfollows:
Originalcost $223,000
Usefullife 7years
Residualvalue $40,000
Thejournalentrytorecordtheassetsannualdepreciationunderthe
straightlinemethodis:
a. DepreciationExpense 26,143
AccumulatedDepreciation 26,143
b. AccumulatedDepreciation 26,143
DepreciationExpense 26,143
c. DepreciationExpense 31,857
AccumulatedDepreciation 31,857
d. AccumulatedDepreciation 5,714
DepreciationExpense 5,714

12. Ifyourfirmestimatesbaddebtexpenseas2%ofcreditsales,whichare
$286,000fortheyear,andtheAllowanceforDoubtfulAccountshasa
debitbalanceof$2,860,howdoyourecordbaddebtexpense?
a. BadDebtExpense 8,580

Testbank 13
MasteringAdjustingEntries
AllowanceforDoubtfulAccounts 8,580
b. AllowanceforDoubtfulAccounts 8,580
BadDebtExpense 8,580
c. BadDebtExpense 5,720
AllowanceforDoubtfulAccounts 5,720
d. AllowanceforDoubtfulAccounts 5,720
BadDebtExpense 5,720

Testbank 14
MasteringAdjustingEntries

13. IfCheapCoestimatesbaddebtexpenseasapercentageofits$159,000
creditsales,estimates3%forthisyearandhasanAllowancefor
DoubtfulAccountswithacreditbalanceof$1,230,howdoesitrecord
baddebtexpense?
a. BadDebtExpense 4,770
AllowanceforDoubtfulAccounts 4,770
b. BadDebtExpense 3,540
AllowanceforDoubtfulAccounts 3,540
c. AllowanceforDoubtfulAccounts 4,770
BadDebtExpense 4,770
d. AllowanceforDoubtfulAccounts 3,540
BadDebtExpense 3,540
14. Ifacompanyfailstorecordanadjustingentryfordepreciationexpense
atyearend,howwillthefinancialstatementsbeaffected?
Netincome Assets
a. overstated overstated
b. overstated understated
c. understated overstated
d. understated understated
15. ByCoestimatesbaddebtasapercentageofcreditsales.Ifitfailsto
recordanadjustingentryatyearend,howwillitaffectByCosfinancial
statements?
Netincome Assets
a. overstated overstated
b. overstated understated
c. understated overstated
d. understated understated
16. Thisyear,yourcompanyestimatesthat$18,000ofA/Rwillbe
uncollectible.TheAllowanceforDoubtfulAccountshasacreditbalanceof
$5,000.Ifnoadjustingjournalentryisrecorded,howwillthefinancial
statementsbeaffected?
Netincome Assets
a. overstated overstated
b. overstated understated
c. understated overstated
d. understated understated

Testbank 15
MasteringAdjustingEntries
Section7FROMUNADJUSTEDTRIALBALANCETOFINANCIAL
STATEMENTS
and
Section8APPLYINGYOURKNOWLEDGETOTHETRIAL
BALANCE

1. Adjustingentries:
a. alwaysinvolvetwoincomestatementaccounts
b. alwaysinvolveabalancesheetaccountandanincomestatement
account
c. neverinvolvecash
d. bothbandc

2. InterestReceivableandInterestPayableare:
a. balancesheetaccounts
b. incomestatementaccounts
c. liabilityaccounts
d. assetaccounts

3. Whichofthefollowingaccountsnormallyhasacreditbalance?
a. PrepaidTaxes
b. InterestIncome
c. RentExpense
d. Equipment

4. Whichofthefollowingisnotaliabilityaccount?
a. PrepaidRent
b. AccruedSalaries
c. PayrollTaxesPayable
d. UnearnedRevenue

5. Thechartofaccountsisnormallypresentedinthefollowingsequence:
a. Income,Expense,Asset,Liability,Equity
b. Equity,Liability,Asset,Expense,Income
c. Asset,Liability,Equity,Revenue,Expenses
d. Noneoftheabove

6. Numberingofaccountsisgenerallyinthefollowingsequence:
a. Income,Expense,Asset,Liability,Equity
b. Equity,Liability,Asset,Expense,Income
c. establishedbyGAAP
d. noneoftheabove

Testbank 16
MasteringAdjustingEntries

7. Whichofthefollowingaccountshasanormaldebitbalance?
a. RentReceivable
b. InterestPayable
c. PrepaidLegalFees
d. bothaandc

8. Whichofthefollowingaccountshasanormalcreditbalance?
a. AccumulatedDepreciation
b. UnearnedRevenue
c. SuppliesOnHand
d. bothaandb

9. Whichofthefollowingaccountshasanormaldebitbalance?
a. AccumulatedDepreciation
b. AllowanceforDoubtfulAccounts
c. RentRevenue
d. noneoftheabove

10. Whichofthefollowingaccountshasanormalcreditbalance?
a. UnearnedSubscriptionRevenue
b. SuppliesOnHand
c. InterestReceivable
d. noneoftheabove

Testbank 17
MasteringAdjustingEntries
Questions1114:MidCoisacalendaryearcompany.Belowisitspartial
worksheetfor,fortheyearendedDecember31,20X8.Usethedatatoanswer
thenextfourquestions.

Unadjusted Adjusted
trialbalance Adjustments trialbalance
Dr Cr Dr Cr Dr Cr
AccountsReceivable 50,000
Allow.ForDoubtfulAccounts 2,000
SuppliesOnHand 1,500
WagesPayable 1,000
NotesPayable 20,000
BadDebtExpense
SuppliesExpense 600
WageExpense 4,000

11. IfthepartialadjustmenttoWagesPayableiscorrect,whatisthe
adjustedbalanceinWageExpense?
a. $4,000
b. $5,000
c. $3,000
d. $1,000

12. IftheadjustmenttoSuppliesExpenseiscorrect,whatistheadjusted
balanceinSuppliesOnHand?
a. $1,500
b. $2,100
c. $1,900
d. $900

13. Ifthecompanyestimates4%ofAccountsReceivabletobeuncollectible,
whatisthedebittoBadDebtExpenseintheadjustmentscolumn?
a. $0
b. $2,000
c. $4,000
d. $1,000

14. OnJuly1,20X6,thecompanyborrowed$20,000andmustrepay
principalandaccruedinterestof10%ayearonJuly1,20X9.Basedon
thisinformation,thedebittoInterestExpenseintheAdjustments
columnis:
a. $0
b. $1,000
c. $2,000
d. $4,000

Testbank 18