Test Bank for Accounting Principles, Ch03, Seventh Edition, Exercises for AccountingTest Bank for Accounting Principles, Ch03, Seventh Edition, Exercises for AccountingTest Bank for Accounting Principles, Ch03, Seventh Edition, Exercises for AccountingTest Bank for Accounting Principles, Ch03, Seve...
Test Bank for Accounting
Principles, Ch03, Seventh Edition
Accounting
Islamic University of Gaza
47 pag.
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, CHAPTER 3
ADJUSTING THE ACCOUNTS
SUMMARY OF QUESTIONS BY OBJECTIVES AND BLOOM’S TAXONOMY
Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT
True-False Statements
1. 1 C 9. 2 C 17. 5 C 25. 5 K 33. 3
2. 1 K 10. 2 K 18. 5 K 26. 6 K 34. 5
3. 1 K 11. 3 C 19. 5 C 27. 7 K 35. 6
a
4. 1 C 12. 3 K 20. 5 C 28. 8 C 36. 7
a a
5. 1 K 13. 3 K 21. 5 C 29. 8 C 37. 8
a
6. 2 C 14. 3 K 22. 5 K 30. 8 C
7. 2 K 15. 4 C 23. 5 K 31. 2
8. 2 K 16. 4 K 24. 5 C 32. 3
Multiple Choice Questions
a
38. 1 K 58. 2 K 78. 4 AN 98. 5 C 118. 8 C
a
39. 1 K 59. 2 C 79. 5 C 99. 5 K 119. 8 C
a
40. 1 K 60. 3 K 80. 5 C 100. 5 C 120. 8 AN
a
41. 1 C 61. 3 C 81. 5 K 101. 5 AN 121. 8 AN
a
42. 1 K 62. 3 C 82. 5 K 102. 5 AN 122. 8 AN
a
43. 1 K 63. 3 K 83. 5 AN 103. 6 C 123. 8 AN
44. 1 C 64. 3 C 84. 5 AN 104. 6 C 124. 2
45. 1 C 65. 3 C 85. 5 K 105. 6 AN 125. 2
46. 1 C 66. 3 C 86. 5 K 106. 6 AN 126. 2
47. 1 K 67. 3 C 87. 5 C 107. 6 AN 127. 4
48. 2 K 68. 4 K 88. 5 C 108. 6 C 128. 4
49. 2 K 69. 4 C 89. 5 AN 109. 6 AN 129. 5
50. 2 K 70. 4 K 90. 5 K 110. 6 AN 130. 6
51. 2 K 71. 4 K 91. 5 AN 111. 6 AN 131. 6
52. 2 C 72. 4 K 92. 5 C 112. 6 AP 132. 6
53. 2 C 73. 4 K 93. 5 K 113. 6 C 133. 7
54. 2 C 74. 4 K 94. 5 K 114. 6 AN 134. 7
55. 2 C 75. 4 K 95. 5 K 115. 7 K
56. 2 C 76. 4 C 96. 5 K 116. 7 K
57. 2 C 77. 4 K 97. 5 C 117. 7 C
Exercises
135. 2 AN 141. 4 C 147. 5,6 AN 153. 6 AN 159. 7 AP
a
136. 2 AN 142. 4 C 148. 5,6 AN 154. 6 AN 160. 8 AN
137. 3 AN 143. 4,5 AN 149. 5,6 AN 155. 6 AN
138. 3 AN 144. 5 AN 150. 5,6 AN 156. 5-7 AN
139. 4 C 145. 5 AN 151. 5,6 AN 157. 5-7 AN
140. 4 AN 146. 5,6 AN 152. 5,6 C 158. 7 AN
Completion Statements
161. 1 K 164. 2 K 167. 5 K 170. 6 K
162. 1 K 165. 2 K 168. 5 K 171. 7 K
163. 2 K 166. 5 K 169. 5 K
a
This topic is dealt with in an Appendix to the chapter
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,3-2 Test Bank for Accounting Principles, Seventh Edition
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Study Objective 1
1. TF 4. TF 39. MC 42. MC 45. MC 161. C
2. TF 5. TF 40. MC 43. MC 46. MC 162. C
3. TF 38. MC 41. MC 44. MC 47. MC
Study Objective 2
6. TF 10. TF 50. MC 54. MC 58. MC 126. MC 164. C
7. TF 31. TF 51. MC 55. MC 59. MC 135. Ex 165. C
8. TF 48. MC 52. MC 56. MC 124. MC 136. Ex
9. TF 49. MC 53. MC 57. MC 125. MC 163. C
Study Objective 3
11. TF 14. TF 60. MC 63. MC 66. MC 138. Ex
s
12. TF 32. TF 61. MC 64. MC 67. MC
s
13. TF 33. TF 62. MC 65. MC 137. Ex
Study Objective 4
15. TF 69. MC 72. MC 75. MC 78. MC 139. Ex 142. Ex
16. TF 70. MC 73. MC 76. MC 127. MC 140. Ex 143. Ex
68. MC 71. MC 74. MC 77. MC 128. MC 141. Ex
Study Objective 5
17. TF 25. TF 85. MC 93. MC 101. MC 148. Ex 167. C
18. TF 34. TF 86. MC 94. MC 102. MC 149. Ex 168. C
19. TF 79. MC 87. MC 95. MC 129. MC 150. Ex 169. C
20. TF 80. MC 88. MC 96. MC 143. Ex 151. Ex
21. TF 81. MC 89. MC 97. MC 144. Ex 152. Ex
22. TF 82. MC 90. MC 98. MC 145. Ex 156. Ex
23. TF 83. MC 91. MC 99. MC 146. Ex 157. Ex
24. TF 84. MC 92. MC 100. MC 147. Ex 166. C
Study Objective 6
26. TF 107. MC 112. MC 132. MC 150. Ex 155. Ex
35. TF 108. MC 113. MC 146. Ex 151. Ex 156. Ex
104. MC 109. MC 114. MC 147. Ex 152. Ex 157. Ex
105. MC 110. MC 130. MC 148. Ex 153. Ex 170. C
106. MC 111. MC 131. MC 149. Ex 154. Ex
Study Objective 7
27. TF 115. MC 117. MC 134. MC 157. Ex 159. Ex
36. TF 116. MC 133. MC 156. Ex 158. Ex 171. C
a
Study Objective 8
a a a
28. TF 30. TF 118. MC a120. MC a122. MC a
160. Ex
a a a
29. TF 37. TF 119. MC a121. MC a123. MC
Note: TF = True-False C = Completion
MC = Multiple Choice Ex = Exercise
The chapter also contains one set of ten Matching questions and four Short-Answer Essay
questions.
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, Adjusting the Accounts 3-3
CHAPTER STUDY OBJECTIVES
1. Explain the time period assumption. The time period assumption assumes that the
economic life of a business can be divided into artificial time periods.
2. Explain the accrual basis of accounting. Accrual-basis accounting means that events
that change a company's financial statements are recorded in the periods in which the
events occur, rather than in the periods in which the company receives or pays cash.
3. Explain why adjusting entries are needed. Adjusting entries are made at the end of an
accounting period. They ensure that revenues are recorded in the period in which they are
earned and that expenses are recognized in the period in which they are incurred.
4. Identify the major types of adjusting entries. The major types of adjusting entries are
prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.
5. Prepare adjusting entries for prepayments. Prepayments are either prepaid expenses or
unearned revenues. Adjusting entries for prepayments are required at the statement date to
record the portion of the prepayment that represents the expense incurred or the revenue
earned in the current accounting period.
6. Prepare adjusting entries for accruals. Accruals are either accrued revenues or accrued
expenses. Adjusting entries for accruals are required to record revenues earned and
expenses incurred in the current accounting period that have not been recognized through
daily entries.
7. Describe the nature and purpose of an adjusted trial balance. An adjusted trial balance
shows the balances of all accounts, including those that have been adjusted, at the end of
an accounting period. Its purpose is to show the effects of all financial events that have
occurred during the accounting period.
a
8. Prepare adjusting entries for the alternative treatment of prepayments. Prepayments
may be initially debited to an expense account. Unearned revenues may be credited to a
revenue account. At the end of the period, these accounts may be overstated. The adjusting
entries for prepaid expenses are a debit to an asset account and a credit to an expense
account. Adjusting entries for unearned revenues are a debit to a revenue account and a
credit to a liability account.
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