ACC 311 Problem Set 4 (SNHU) LATEST UPDATE COMPLETE QUESTIONS
AND CORRECT SOLUTIONS || 100% GUARANTEED PASS <LATEST
VERSION>
Description: ACC 311 Problem Set 4 from SNHU includes the latest
accounting problems with step-by-step solutions and verified answers.
Topics include adjusting entries, financial statements, and managerial
accounting concepts. Fully updated for 2025.
Keywords: ACC 311 SNHU Accounting Problems Financial Statements
Adjusting Entries Managerial Accounting Verified Solutions
Part 1: The Accounting Cycle & Adjusting Entries
1. Question: The purpose of an adjusting entry is to:
a) Record transactions that occur during the period.
b) Close temporary accounts at the end of the period.
c) Ensure that the revenue recognition and expense recognition principles are followed.
d) Correct errors made in the general journal.
2. Question: An adjusting entry for accrued revenues always involves:
a) A debit to an asset and a credit to a revenue.
b) A debit to a revenue and a credit to a liability.
c) A debit to an expense and a credit to a liability.
d) A debit to a liability and a credit to a revenue.
3. Question: If a company fails to make an adjusting entry for expired insurance, what is
the effect on the financial statements?
a) Assets are overstated and expenses are understated.
b) Liabilities are overstated and expenses are understated.
c) Assets are understated and revenues are overstated.
d) Expenses are overstated and stockholders' equity is overstated.
,4. Question: Salaries payable, unearned revenue, and prepaid insurance are examples of:
a) Permanent accounts.
b) Temporary accounts.
c) Accounts that require adjusting entries.
d) Accounts that appear on the income statement.
5. Question: A company received $12,000 for a one-year rental contract in advance on
November 1. The December 31 adjusting entry will include a:
a) Debit to Unearned Revenue for $2,000.
b) Credit to Rent Revenue for $2,000.
c) Debit to Cash for $12,000.
d) Credit to Unearned Revenue for $10,000.
6. Question: Depreciation is a process of:
a) Valuation.
b) Cost allocation.
c) Cash accumulation.
d) Appraisal.
7. Question: The balance in the supplies account before adjustment is $3,400. The year-
end physical count shows $800 of supplies on hand. The adjusting entry will include a:
a) Debit to Supplies Expense for $2,600.
b) Credit to Supplies for $2,600.
c) Debit to Supplies for $800.
d) Credit to Supplies Expense for $800.
8. Question: If a company fails to adjust for accrued expenses, what is the result?
a) Net income is understated and liabilities are understated.
b) Net income is overstated and liabilities are understated.
c) Net income is overstated and assets are understated.
d) Net income is understated and assets are overstated.
9. Question: The adjusted trial balance is prepared:
a) After financial statements are prepared.
b) Before the adjusting entries are journalized.
c) After the adjusting entries are journalized and posted.
d) To list all permanent accounts only.
10. Question: Which of the following accounts is closed at the end of the accounting
period?
, a) Accumulated Depreciation
b) Retained Earnings
c) Salaries Payable
d) Service Revenue
Part 2: Merchandising Operations & Inventory
11. Question: For a merchandising company, the cost of goods sold is equal to:
a) Beginning inventory + Net purchases + Freight-in - Ending inventory.
b) Beginning inventory + Net purchases - Freight-out - Ending inventory.
c) Net purchases + Ending inventory - Beginning inventory.
d) Beginning inventory + Net purchases - Ending inventory.
12. Question: Gross profit is calculated as:
a) Net sales - Cost of goods sold.
b) Net sales - Operating expenses.
c) Net income + Operating expenses.
d) Net sales - Cost of goods sold - Operating expenses.
13. Question: In a perpetual inventory system:
a) Inventory and cost of goods sold are updated continuously.
b) A physical inventory count is never needed.
c) Purchases of inventory are recorded in a "Purchases" account.
d) Cost of goods sold is determined only at the end of the period.
14. Question: The entry to record the sale of inventory on account under a perpetual system
includes:
a) A debit to Cost of Goods Sold and a credit to Inventory.
b) A debit to Inventory and a credit to Cost of Goods Sold.
c) A debit to Purchases and a credit to Accounts Payable.
d) No entry for the cost of the inventory.
15. Question: A purchase return of merchandise is recorded with a credit to:
a) Accounts Payable.
b) Inventory.
c) Purchases.
d) Cost of Goods Sold.
16. Question: Which of the following is not included in the cost of inventory?
a) Purchase price
b) Import duties
AND CORRECT SOLUTIONS || 100% GUARANTEED PASS <LATEST
VERSION>
Description: ACC 311 Problem Set 4 from SNHU includes the latest
accounting problems with step-by-step solutions and verified answers.
Topics include adjusting entries, financial statements, and managerial
accounting concepts. Fully updated for 2025.
Keywords: ACC 311 SNHU Accounting Problems Financial Statements
Adjusting Entries Managerial Accounting Verified Solutions
Part 1: The Accounting Cycle & Adjusting Entries
1. Question: The purpose of an adjusting entry is to:
a) Record transactions that occur during the period.
b) Close temporary accounts at the end of the period.
c) Ensure that the revenue recognition and expense recognition principles are followed.
d) Correct errors made in the general journal.
2. Question: An adjusting entry for accrued revenues always involves:
a) A debit to an asset and a credit to a revenue.
b) A debit to a revenue and a credit to a liability.
c) A debit to an expense and a credit to a liability.
d) A debit to a liability and a credit to a revenue.
3. Question: If a company fails to make an adjusting entry for expired insurance, what is
the effect on the financial statements?
a) Assets are overstated and expenses are understated.
b) Liabilities are overstated and expenses are understated.
c) Assets are understated and revenues are overstated.
d) Expenses are overstated and stockholders' equity is overstated.
,4. Question: Salaries payable, unearned revenue, and prepaid insurance are examples of:
a) Permanent accounts.
b) Temporary accounts.
c) Accounts that require adjusting entries.
d) Accounts that appear on the income statement.
5. Question: A company received $12,000 for a one-year rental contract in advance on
November 1. The December 31 adjusting entry will include a:
a) Debit to Unearned Revenue for $2,000.
b) Credit to Rent Revenue for $2,000.
c) Debit to Cash for $12,000.
d) Credit to Unearned Revenue for $10,000.
6. Question: Depreciation is a process of:
a) Valuation.
b) Cost allocation.
c) Cash accumulation.
d) Appraisal.
7. Question: The balance in the supplies account before adjustment is $3,400. The year-
end physical count shows $800 of supplies on hand. The adjusting entry will include a:
a) Debit to Supplies Expense for $2,600.
b) Credit to Supplies for $2,600.
c) Debit to Supplies for $800.
d) Credit to Supplies Expense for $800.
8. Question: If a company fails to adjust for accrued expenses, what is the result?
a) Net income is understated and liabilities are understated.
b) Net income is overstated and liabilities are understated.
c) Net income is overstated and assets are understated.
d) Net income is understated and assets are overstated.
9. Question: The adjusted trial balance is prepared:
a) After financial statements are prepared.
b) Before the adjusting entries are journalized.
c) After the adjusting entries are journalized and posted.
d) To list all permanent accounts only.
10. Question: Which of the following accounts is closed at the end of the accounting
period?
, a) Accumulated Depreciation
b) Retained Earnings
c) Salaries Payable
d) Service Revenue
Part 2: Merchandising Operations & Inventory
11. Question: For a merchandising company, the cost of goods sold is equal to:
a) Beginning inventory + Net purchases + Freight-in - Ending inventory.
b) Beginning inventory + Net purchases - Freight-out - Ending inventory.
c) Net purchases + Ending inventory - Beginning inventory.
d) Beginning inventory + Net purchases - Ending inventory.
12. Question: Gross profit is calculated as:
a) Net sales - Cost of goods sold.
b) Net sales - Operating expenses.
c) Net income + Operating expenses.
d) Net sales - Cost of goods sold - Operating expenses.
13. Question: In a perpetual inventory system:
a) Inventory and cost of goods sold are updated continuously.
b) A physical inventory count is never needed.
c) Purchases of inventory are recorded in a "Purchases" account.
d) Cost of goods sold is determined only at the end of the period.
14. Question: The entry to record the sale of inventory on account under a perpetual system
includes:
a) A debit to Cost of Goods Sold and a credit to Inventory.
b) A debit to Inventory and a credit to Cost of Goods Sold.
c) A debit to Purchases and a credit to Accounts Payable.
d) No entry for the cost of the inventory.
15. Question: A purchase return of merchandise is recorded with a credit to:
a) Accounts Payable.
b) Inventory.
c) Purchases.
d) Cost of Goods Sold.
16. Question: Which of the following is not included in the cost of inventory?
a) Purchase price
b) Import duties
