ACCY 201 EXAM 2 2026 ADJUSTING ENTRIES
AND CLOSING PROCESS REVIEW QUESTIONS
ANSWERS VERIFIED GUIDE
◉ A deferral is a transaction in which:
Answer: The exchange of cash occurs before the recognition
◉ Accumulated depreciation is:
Answer: A contra-asset (and it also belongs on a balance sheet)
◉ Abacus Company has the following balances:
Current assets $30,000
Current liabilities 20,000
Stockholders' equity 60,000
Net sales 100,000
Net income 20,000
What is the company's profit margin on sales?
Answer: 20%
◉ Segregation of duties means that the person who has physical
custody of an asset is not the same person who has _______
responsibilities for that asset.
, Answer: record-keeping
◉ On the bank reconciliation, outstanding checks are
Answer: Deducted from the cash balance per bank
◉ Petarama wishes to account for bad debts. Accounts receivable
has a balance of $40,000 and sales for the period are $100,000. The
allowance for doubtful accounts has a $2,000 credit balance.
Petarama estimates its bad debts at 3.5% and uses the percentage
of sales method. The entry to estimate bad debts will be for what
amount?
Answer: $3,500
◉ Petarama wishes to account for bad debts. Accounts receivable
has a balance of $40,000 and sales for the period are $100,000. The
allowance for doubtful accounts has a $2,000 credit balance.
Petarama uses the aging of accounts receivable method. The total
amount at the bottom of its aging schedule is $6,000. The entry to
estimate bad debts will be for what amount?
Answer: $4,000
◉ Accounts receivable turnover is calculated as
Answer: Net sales divided by average accounts receivable
AND CLOSING PROCESS REVIEW QUESTIONS
ANSWERS VERIFIED GUIDE
◉ A deferral is a transaction in which:
Answer: The exchange of cash occurs before the recognition
◉ Accumulated depreciation is:
Answer: A contra-asset (and it also belongs on a balance sheet)
◉ Abacus Company has the following balances:
Current assets $30,000
Current liabilities 20,000
Stockholders' equity 60,000
Net sales 100,000
Net income 20,000
What is the company's profit margin on sales?
Answer: 20%
◉ Segregation of duties means that the person who has physical
custody of an asset is not the same person who has _______
responsibilities for that asset.
, Answer: record-keeping
◉ On the bank reconciliation, outstanding checks are
Answer: Deducted from the cash balance per bank
◉ Petarama wishes to account for bad debts. Accounts receivable
has a balance of $40,000 and sales for the period are $100,000. The
allowance for doubtful accounts has a $2,000 credit balance.
Petarama estimates its bad debts at 3.5% and uses the percentage
of sales method. The entry to estimate bad debts will be for what
amount?
Answer: $3,500
◉ Petarama wishes to account for bad debts. Accounts receivable
has a balance of $40,000 and sales for the period are $100,000. The
allowance for doubtful accounts has a $2,000 credit balance.
Petarama uses the aging of accounts receivable method. The total
amount at the bottom of its aging schedule is $6,000. The entry to
estimate bad debts will be for what amount?
Answer: $4,000
◉ Accounts receivable turnover is calculated as
Answer: Net sales divided by average accounts receivable
