Consider the adjustment process at the end of the accounting period.

1. Record the adjusting entries in the journal.

2. Prepare an adjusted trial balance to check the equality of the debits and credits.

3. Determine the accounts requiring adjustment, using the unadjusted trial balance.

4. Post the adjusting entries to the general ledger.

Place the actions above in the proper order.

A) 1, 4, 3, 2.

B) 1, 2, 4, 3.

C) 3, 4, 2, 1.

D) 3, 1, 4, 2.

Answer: D

An adjusted trial balance:

A) Is a list of all accounts and their balances after adjusting entries.

B) Is a list of all accounts and their balances before adjusting entries.

C) Is a list of all accounts and their balances after closing entries.

D) Is a trial balance adjusted for cash-basis accounting.

Answer: A

The adjusted trial balance should be prepared ________ the financial statements are prepared in order to prove the ________ of the debits and credits.

A) after; equality

B) before; accuracy

C) before; equality

D) after; accuracy

Answer: C

On November 1, $4,800 of rent on equipment for the next six months was paid and charged to Prepaid Rent. At the end of the year, the financial statements would report:

A) Rent Expense, $4,800; Prepaid Rent $0.

B) Rent Expense, $1,600; Prepaid Rent $3,200.

C) Rent Expense, $1,600; Prepaid Rent $4,800.

D) Rent Expense, $3,200; Prepaid Rent $1,600.

Answer: B

Prior to adjusting entries, Salaries Expense had a balance of $22,300. The following year-end adjusting entry was made by the company:

Salaries Expense 4,400

Salaries Payable 4,400

What balance would be shown for Salaries Expense in the adjusted trial balance?

A) $4,400.

B) $17,900.

C) $22,300.

D) $26,700.

Answer: D

Prior to adjusting entries, Prepaid Rent had a balance of $8,300. The following year-end adjusting entry was made by the company:

Rent Expense 6,800

Prepaid Rent 6,800

What balance would be shown for Prepaid Rent in the adjusted trial balance?

A) $1,500.

B) $6,800.

C) $8,300.

D) $15,100.

Answer: A