ACC 280

ACC/280 Principles of Accounting Final Exam

Which one of the following is not a justification for adjusting entries? A. Adjusting entries are necessary to enable financial statements to be in conformity with GAAP. B. Adjusting entries are necessary to ensure that the matching principle is followed. C. Adjusting entries are necessary to ensure that revenue recognition principles are followed. D. Adjusting entries are necessary to bring the general ledger accounts in line with the budget.

The preparation of adjusting entries is A. only required for accounts that do not have a normal balance. B. often an involved process requiring the skills of a professional. C. straight forward because the accounts that need adjustment will be out of balance. D. optional when financial statements are prepared.

Accounts often need to be adjusted because A. there are always errors made in recording transactions. B. many transactions affect more than one time period.C. there are never enough accounts to record all the transactions. D. management can’t decide what they want to report.

The adjusted trial balance is prepared A. after financial statements are prepared. B. before the trial balance. C. after adjusting entries have been journalized and posted.D. to prove the equality of total assets and total liabilities.

Financial statements are prepared directly from the A. general journal. B. ledger. C. adjusted trial balance. D. trial balance.

An adjusted trial balance A. is prepared after the financial statements are completed. B. proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made.C. cannot be used to prepare financial statements. D. is a required financial statement under generally accepted accounting principles.