Chapter 15 Flashcards
Businesses use a 12 month period or fiscal year, ending on December 31 for reporting their financial performance
False
The adjusting entry for merchandise inventory is unique to a merchandising business
True
The first step in preparing adjusting entires is to prepare an unadjusted trial balance
True
A trial balance provides a complete list of accounts that may need to be brought up to date
True
Rather than using a worksheet a business can use an unadjusted trial balance and record adjustments directly to a general journal
True
The adjustment for the supplies office account will result in a debit to supplies expense office
True
Th amount of the adjustment for prepaid insurance represents the value of insurance premium used during the fiscal period
True
For a company using the periodic inventory method the account balance of merchandise inventory changes during the fiscal year
False
If ending inventory is less than the account balance of merchandise inventory the inventory adjustment will include a credit to income summary
False
The adjusting entry for accrued revenue increased a revenue account that’s a credit and increases a receivable account that is a debit
True
Estimates the cost salvage value and useful life of a plant asset are used to calculate its annual depreciation value
False
Functional depreciation occurs when a plant asset becomes inadequate or obsolete
True
Any amount of federal income tax owed at the end of the fiscal year is debited to federal income tax payable
False
Tax rates for corporations can be changed by an act of congress
True
A corporation using a 35% marginal tax rate must pay income taxes equal to 35% of its income before federal income taxes
False
