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Louisiana State University, Shreveport

ACCT 701

Chapter 4 Self- Test

1)Every adjusting entry affects at least one income statement account and one balance sheet account.

All calendar years are also fiscal years, but not all fiscal years are calendar years.
The accumulated depreciation account is an asset account that shows the amount of depreciation for the current year only.
The Unearned Delivery Fees account is a revenue account.
If all of the adjusting entries are not made, the financial statements are incorrect.

An insurance policy premium of USD 1,200 was paid on 2010 September 1, to cover a one-year period from that date. An asset was debited on that date. Adjusting entries are prepared once a year, at year-end. The necessary adjusting entry at the company’s year-end, 2010 December 31, is:
The Supplies on Hand account has a balance of USD 1,500 at year-end. The actual amount of supplies on hand at the end of the period was USD 400. The necessary adjusting entry is:
A company purchased a truck for USD 20,000 on 2010 January 1. The truck has an estimated residual value of USD 5,000 and is expected to last five years. Adjusting entries are prepared only at year-end. The necessary adjusting entry at 2010 December 31, the company’s year-end, is:
A company received cash of USD 24,000 on 2010 October 1, as subscriptions for a one-year period from that date. A liability account was credited when the cash was received. The magazine is to be published by the company and delivered to subscribers each month. The company prepares adjusting entries at the end of each month because it prepares financial statements each month. The adjusting entry the company would make at the end of each of the next 12 months would be:
When a company earns interest on a note receivable or on a bank account, the debit and credit are as follows:
If USD 3,000 has been earned by a company’s workers since the last payday in an accounting period, the necessary adjusting entry would be:

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