INTUIT BOOKKEEPING FINAL PAPER EXAM QUESTIONS ACCURATE ANSWERS FULL
SOLUTION
●● what is the main purpose of the adjusting process in accounting
Answer: to correct error and misstatements in final statements that can
result from inaccurate records or faulty assumptions.
to record transactions that have not been entered in the accounting
records during the accounting period
to record changes of a business that occur as a result of time or business
activity
●● which statements are true about the balance sheet Answer: it displays
what the business owns and what the business owes as of a single day.
it should be monitored on a regular basis since it's integral to
maintaining the health of the business
it is used to track all assets, liabilities, and equity of a business
, it is final statement that reports assets, liabilities, and equity for specific
time
●● asset Answer: a resource with economic value that a business owns
or controls
●● you're a bookkeeper for a small law firm that provides legal services
to clients on a monthly retainer basis. you use accrual accounting to
record the final transactions of the firm in june, you billed 10 clients for
a total of $20,000, but only 8 of them paid you by june 30th the other 2
clients paid $2,000 each on july 10. you also incurred $5,000 in
expenses for rent, utilities, and supplies in june, which you paid june 30.
now would you report your revenue and expenses for june under the
matching principle? Answer: revenue = $20,000
expenses = $5,000
●● bookkeeper notices there is increase in Accounts Payable (liability
account) from recording a utility bill. what is impact on accounting
equation? Answer: decrease owners equity
●● business bought a new printer with cash for $1,000 on 1/10. useful
life = 5 years. residual value $100. uses straight line method to calculate
depreciation.
-business has received $50 coupon to buy books.
-business made rounding error of $2 in recording COGS for january.
COGS before error = $10,000
SOLUTION
●● what is the main purpose of the adjusting process in accounting
Answer: to correct error and misstatements in final statements that can
result from inaccurate records or faulty assumptions.
to record transactions that have not been entered in the accounting
records during the accounting period
to record changes of a business that occur as a result of time or business
activity
●● which statements are true about the balance sheet Answer: it displays
what the business owns and what the business owes as of a single day.
it should be monitored on a regular basis since it's integral to
maintaining the health of the business
it is used to track all assets, liabilities, and equity of a business
, it is final statement that reports assets, liabilities, and equity for specific
time
●● asset Answer: a resource with economic value that a business owns
or controls
●● you're a bookkeeper for a small law firm that provides legal services
to clients on a monthly retainer basis. you use accrual accounting to
record the final transactions of the firm in june, you billed 10 clients for
a total of $20,000, but only 8 of them paid you by june 30th the other 2
clients paid $2,000 each on july 10. you also incurred $5,000 in
expenses for rent, utilities, and supplies in june, which you paid june 30.
now would you report your revenue and expenses for june under the
matching principle? Answer: revenue = $20,000
expenses = $5,000
●● bookkeeper notices there is increase in Accounts Payable (liability
account) from recording a utility bill. what is impact on accounting
equation? Answer: decrease owners equity
●● business bought a new printer with cash for $1,000 on 1/10. useful
life = 5 years. residual value $100. uses straight line method to calculate
depreciation.
-business has received $50 coupon to buy books.
-business made rounding error of $2 in recording COGS for january.
COGS before error = $10,000
