QuickBooks Chapter 7 Questions and Answers 100% Verified

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QuickBooks Chapter 7 Questions and Answers 100% Verified The purpose of an adjusting entry is: A)Revenue was earned but not recorded. B)Expenses incurred but not recorded. C)To show the prepaid e... xpense for one month. D)Customer paid in advance of receiving goods or services. E)All of the above. ✔✔E)All of the above Adjusting entries are made on the: A)15th of every month .B)First day of the new year, meaning January 1. C)Last day of the month, quarter, or year. D)Adjusting entries are rarely recorded for a company. E)All of the above. ✔✔C)Last day of the month, quarter, or year On January 1 of the new year, this account shows Net Income: A)Sales. B)Cost of Goods Sold. C)Common Stock. D)Retained Earnings E)None of the above. ✔✔D)Retained Earnings On January 1, the Profit & Loss statement shows the following account balances: A)The same as on December 31 of the previous year. B)Zero. C)The same as the Balance Sheet accounts. D)The same as the Statement of Cash Flows accounts. E)None of the above. ✔✔B)Zero The Exercise 6-2 December trial balance shows account balances before: A)Recording expenses. B)Adjustments. C)Additional Common Stock investment. D)Before bills are paid. E)None of the above. ✔✔B)Adjustments Record adjusting entries on the: A)Customer payments window. B)Vendor payments window. C)Check window. D)Journal Entry window. E)None of the above. ✔✔D)Journal Entry window When depreciating Computer Equipment, this method was used: A)Double-declining balance. B)Computer Equipment is not depreciated. C)Straight-line. D)Average. E)None of the above. ✔✔C)Straight-line This report lists each account on the chart of accounts with a minus sign in front of credit balances. A)December 31 Journal. B)Adjusted Trial Balance. C)EOY Profit and Loss statement. D)Transaction Detail by Account. E)All of the above. ✔✔D)Transaction Detail by Account After adjustments are journalized and posted, the report(s) updated is/are: A)Trial Balance. B)Profit and Loss. C)Balance Sheet. D)Statement of Cash Flows. E)All of the above. ✔✔E)All of the above In Chapter 7, when the Balance Sheet date is changed to January 1: A)The Balance Sheet has zero account balances. B)Net income is shown as Retained Earnings. C)Depreciation expense has an $800.00 balance. D)The Balance Sheet is the same on December 31 and January 1. E)None of the above. ✔✔B)Net income is shown as Retained Earnings In Chapter 7, end-of-fourth quarter closing entries are recorded on the Journal Entry window. A)True B)False ✔✔B)False After completing closing entries, you print the Adjusted Trial Balance, Profit & Loss statement and other financial statements. A)True B)False ✔✔B)False The fiscal year is a period that a company uses for accounting purposes and preparing financial statements. A)True B)False ✔✔A)True For tax purposes, the fiscal year and calendar year are the same because that is the Internal Revenue Service default. A)True B)False ✔✔B)False Adjusting entries are recorded to correct an account balance. A)True B)False ✔✔A)True An example of an adjusting entry is an expense that has been prepaid but it has not been recorded for its appropriate monthly amount. A)True B)False ✔✔A)True A typical reason for an adjusting entry is that it involves deleting an asset, liability, or expense account balance. A)True B)False ✔✔B)False Accumulated depreciation has a credit balance. A)True B)False ✔✔A)True The purpose of financial statements is to show revenues earned and expenses incurred during the accounting period. A)True B)False ✔✔A)True The amount shown in Retained Earnings is last year's Net Income. A)True B)False ✔✔A)True [Show More]

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