Question 1

A company purchases a one-year insurance policy for $4,150 on July 1, 2025, covering July 2025 through June 2026. What is the adjusting entry for insurance expense on December 31, 2025?

Accepted Answer

Debit Insurance Expense $$2,075; Credit Prepaid Insurance 2$$,075

Question 2

A company has the following balances at year-end: Sales Revenue $$300,000, Sales Returns & Allowances 40$$,000, and Sales Discounts $9,600. What is the amount of net sales reported on the income statement?

Accepted Answer

$250,400

Question 3

Given the following trial balance information: Equipment $$277,800, Accumulated Depreciation 72$$,650, what is the net book value of equipment reported on the balance sheet?

Accepted Answer

$205,150

Question 4

A company estimates $8,150 in depreciation expense each year. What is the adjusting entry at year-end?

Accepted Answer

Debit Depreciation Expense $$8,150; Credit Accumulated Depreciation 8$$,150

Question 5

A company’s bank statement shows an ending balance of $$29,279. There is a deposit in transit of 1$$,675 and outstanding checks totaling $2,974. What is the adjusted bank balance?

Accepted Answer

$27,980

Question 6

If a company’s net sales are $850,000 and its gross profit percentage is 20%, what is the cost of goods sold?

Accepted Answer

$680,000

Question 7

A company uses a perpetual inventory system. It sells $$3,500 of blue jeans for cash. The customer later brings back 420 of $$blue jeans for a $$140 allowance. What is the correct journal entry for the 140 $$allowance?

Accepted Answer

Debit Sales Returns and Allowances $$140; Credit Cash 140$$

Question 8

A company’s adjusted trial balance shows Service Revenue $$48,100, Rent Expense 17$$,800, Salaries and Wages Expense $$3,000, and Supplies Expense 52$$,900. What is the company’s net income (loss)?

Accepted Answer

$-25,600

Question 9

A company’s unadjusted trial balance includes Supplies $$138,600. At year-end, a count shows 85$$,700 of supplies remain. What is the adjusting entry for supplies?

Accepted Answer

Debit Supplies Expense $$52,900; Credit Supplies 52$$,900

Question 10

A company receives $5,600 in advance for services to be performed. At year-end, all services have been performed. What is the adjusting entry?

Accepted Answer

Debit Deferred Revenue $$5,600; Credit Service Revenue 5$$,600

Question 11

A company’s bank statement includes a $$67 deduction for an NSF check and a 25 $$deduction for bank service charges. What is the correct journal entry to record these items?

Accepted Answer

Debit Bank Service Charges $$25, Debit Accounts Receivable 67$$; Credit Cash $92

Question 12

A company established a petty cash fund of $1,000 on April 1. What is the correct journal entry?

Accepted Answer

Debit Petty Cash $$1,000; Credit Cash 1$$,000

Question 13

A company’s adjusted trial balance shows: Cash $$68,900, Accounts Receivable 118$$,300, Supplies $$85,700, Prepaid Insurance 4$$,350, Equipment $$277,800, Accumulated Depreciation 72$$,650. What is the total current assets?

Accepted Answer

$277,250

Question 14

A company’s closing entries include: Service Revenue $$36,000, Salaries and Wages Expense 8$$,000, Rent Expense $$4,000, Depreciation Expense 2$$,000, Income Tax Expense $2,000. What is the amount transferred to Income Summary?

Accepted Answer

$$36,000 credit and 16$$,000 debit

Question 15

A company’s adjusted trial balance shows: Accounts Payable $$104,100, Salaries and Wages Payable 21$$,600, Notes Payable (long-term) $87,400. What is the total liabilities reported on the balance sheet?

Accepted Answer

$213,100

Question 16

A company’s adjusted trial balance shows: Common Stock $$216,100, Retained Earnings 143$$,500. What is the total stockholders’ equity?

Accepted Answer

$359,600

Question 17

A company’s adjusted trial balance shows: Service Revenue $$48,100, Interest Revenue 22$$,160, Supplies Expense $$52,900, Repairs and Maintenance Expense 26$$,400, Rent Expense $$17,800, Depreciation Expense 8$$,150, Insurance Expense $$4,350, Salaries and Wages Expense 3$$,000. What is the company’s income from operations?

Accepted Answer

$-42,340

Question 18

A company’s adjusted trial balance shows: Deferred Revenue $$3,600. At year-end, 5$$,600 of services have been performed that were previously paid in advance. What is the adjusting entry?

Accepted Answer

Debit Deferred Revenue $$5,600; Credit Service Revenue 5$$,600

Question 19

A company’s adjusted trial balance shows: Interest Receivable $$1,560. At year-end, an additional 260 of $$interest has been earned but not yet received. What is the adjusting entry?

Accepted Answer

Debit Interest Receivable $$260; Credit Interest Revenue 260$$

Question 20

A company’s adjusted trial balance shows: Rent Expense $$17,800, Repairs and Maintenance Expense 26$$,400, Depreciation Expense $$8,150, Insurance Expense 4$$,350, Salaries and Wages Expense $3,000. What is the total operating expenses?

Accepted Answer

$59,700

Financial Accounting Study Guide: Adjusting Entries, Trial Balances, Closing Entries, and Bank Reconciliation

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