QuickBooks Adjustments Test Questions & Answers Chapter 9

Computer Accounting with QuickBooks 2019, 19e (Kay)

Chapter 9 QuickBooks Adjustments

1) The order of the steps in the accounting cycle includes:

A) Adjusted Trial Balance, financial reports, adjusting entries, Trial Balance

B) Adjusted Trial Balance, adjusting entries, financial reports, Trial Balance

C) Trial Balance, adjusting entries, Adjusted Trial Balance, financial reports

D) Trial Balance, financial reports, adjusting entries, Adjusted Trial Balance

Difficulty: 1 Easy

Learning Objective: 09-03 Accounting Cycle

Accessibility: Keyboard Navigation

Gradable: automatic

2) What is an asset?

A) What remains after the liabilities are satisfied

B) What a company owes

C) What a company owns

D) The excess of revenues over expenses

Difficulty: 1 Easy

Learning Objective: 09-08 Prepaid Items: Related Expense and Asset Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

3) To record adjusting journal entries in QuickBooks, select:

A) Company Center > Journal Entry icon

B) Accountant Menu > Make General Journal Entries

C) Banking section of the Home Page > Journal Entry icon

D) Company section of the Home Page > Journal Entry icon

Difficulty: 2 Medium

Learning Objective: 09-06 Using QuickBooks To Make Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: automatic

4) Sales are recorded under cash basis accounting when:

A) The goods or services are provided regardless of whether the cash is collected from the customers

B) The bookkeeper has time to record the transactions

C) The cash is collected from the customers

D) The costs are incurred to earn the revenue

Difficulty: 2 Medium

Learning Objective: 09-07 Types of Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: automatic

5) An accounting period may be:

A) One quarter

B) One month

C) One year

D) All the choices are correct

Difficulty: 1 Easy

Learning Objective: 09-03 Accounting Cycle

Accessibility: Keyboard Navigation

Gradable: automatic

6) The Trial Balance:

A) Lists all the company's accounts, all transactions affecting accounts, and ending account balances

B) Is prepared before making adjustments

C) Is prepared after financial statements are prepared

D) Verifies there are no errors in the entire accounting system

Difficulty: 1 Easy

Learning Objective: 09-03 Accounting Cycle; 09-04 Trial Balance

Accessibility: Keyboard Navigation

Gradable: automatic

7) Adjusting entries should be made:

A) Before preparing an Adjusted Trial Balance

B) After preparing financial statements

C) After preparing an Adjusted Trial Balance

D) Before preparing a Trial Balance

Difficulty: 1 Easy

Learning Objective: 09-05 Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: automatic

8) Unearned revenue occurs when:

A) Customers pay after receiving a service

B) Customers pay in advance of receiving a service

C) Customers default and do not pay you what is owed

D) All the choices are correct

Difficulty: 2 Medium

Learning Objective: 09-09 Unearned Items: Related Revenue and Liability Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

9) To record adjusting entries, use:

A) Reports Menu > General Journal Entries

B) Accountant Menu > Make General Journal Entries

C) Banking Menu > Make General Journal Entries

D) Home > Journal Entries

Difficulty: 2 Medium

Learning Objective: 09-06 Using QuickBooks To Make Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: automatic

10) Before making adjusting entries, you should:

A) Close permanent accounts

B) Prepare a Trial Balance

C) Close temporary accounts

D) Prepare a balance sheet

Difficulty: 1 Easy

Learning Objective: 09-03 Accounting Cycle

Accessibility: Keyboard Navigation

Gradable: automatic

11) Adjusting entries are used to:

A) Close temporary accounts at year end

B) Close permanent accounts at year-end

C) Bring account balances up to date at year end

D) All the choices are correct

Difficulty: 1 Easy

Learning Objective: 09-05 Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: automatic

12) To prepare a Trial Balance, select:

A) Reports Center > Accountant & Taxes

B) Company Center > Company & Financials

C) Reports Center > Company & Financials

D) Company Center > Accountant & Taxes

Difficulty: 2 Medium

Learning Objective: 09-04 Trial Balance

Accessibility: Keyboard Navigation

Gradable: automatic

13) To print an Adjusted Trial Balance, select:

A) Reports Center > Accountant & Taxes

B) Company Center > Company & Financials

C) Reports Center > Company & Financials

D) Company Center > Accountant & Taxes

Difficulty: 2 Medium

Learning Objective: 09-04 Trial Balance

Accessibility: Keyboard Navigation

Gradable: automatic

14) Types of adjusting entries include all of the following except:

A) Prepaid Items

B) Accrued Revenues

C) Accrued Expenses

D) Accrued Cash

Difficulty: 2 Medium

Learning Objective: 09-07 Types of Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: automatic

15) Prepaid items for which adjusting entries may be necessary include all of the following except:

A) Prepaid insurance

B) Prepaid Rent

C) Accrued Interest

D) Office Supplies

Difficulty: 2 Medium

Learning Objective: 09-08 Prepaid Items: Related Expense and Asset Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

16) If a count of office supplies on hand reveal $100 of supplies unused at year-end and the Office Supplies on Hand account has a balance of $350, the adjusting entry to bring the Office Supplies on Hand up to date at year-end should include:

A) Debit Office Supplies on Hand $100, Credit Office Supplies Expense $100

B) Debit Office Supplies on Hand $150, Credit Office Supplies Expense $150

C) Debit Office Supplies Expense $100, Credit Office Supplies on Hand $100

D) Debit Office Supplies Expense $250, Credit Office Supplies on Hand $250

Difficulty: 3 Hard

Learning Objective: 09-08 Prepaid Items: Related Expense and Asset Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

17) Adjusting entries for unearned items typically include which of the following related types of accounts:

A) Revenue and Liability accounts

B) Revenue and Asset accounts

C) Expense and Liability accounts

D) Expense and Asset accounts

Difficulty: 2 Medium

Learning Objective: 09-09 Unearned Items: Related Revenue and Liability Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

18) Adjusting entries for prepaid items typically include which of the following related types of accounts:

A) Revenue and Liability accounts

B) Revenue and Asset accounts

C) Expense and Liability accounts

D) Expense and Asset accounts

Difficulty: 2 Medium

Learning Objective: 09-08 Prepaid Items: Related Expense and Asset Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

19) Adjusting entries for accrued expenses typically include which of the following related types of accounts:

A) Revenue and Liability accounts

B) Revenue and Asset accounts

C) Expense and Liability accounts

D) Expense and Asset accounts

Difficulty: 2 Medium

Learning Objective: 09-10 Accrued Expenses: Related Expense and Liability Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

20) Adjusting entries for accrued revenues typically include which of the following related types of accounts:

A) Revenue and Liability accounts

B) Revenue and Asset accounts

C) Expense and Liability accounts

D) Expense and Asset accounts

Difficulty: 2 Medium

Learning Objective: 09-11 Accrued Revenues: Related Revenue and Asset Accounts

Accessibility: Keyboard Navigation

Gradable: automatic

21) Briefly explain 2 (two) differences between depreciation on a tax return and on a financial statement.

Difficulty: 2 Medium

Learning Objective: 09-07 Types of Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: manual

22) What is the difference between the cash basis and the accrual basis?

When the accrual basis is used, sales are recorded when the good or service is provided regardless of when the cash is collected from the customer. Expenses are recorded when the cost is incurred or expires, even if the expense has not been paid.

Difficulty: 3 Hard

Learning Objective: 09-07 Types of Adjusting Entries

Accessibility: Keyboard Navigation

Gradable: manual

23) Briefly explain the difference between voiding and deleting an erroneous document in order to correct an error entered in QuickBooks.

• Void the erroneous document, then create a new document. Voiding keeps a record of the document, but changes the amounts to zero.
• Delete the erroneous document, then create a new document. Deleting the document erases the document from our system.

Typically, voiding an erroneous document is preferable because then we have a better audit trail showing changes.

Difficulty: 2 Medium

Learning Objective: 09-13 Accounting Essentials: Accounting Adjustments and Corrections

Accessibility: Keyboard Navigation

Gradable: manual