1. Adjusting entries are needed whenever transactions affect the revenue or expenses of more than one
accounting period.
True False
2. The book value of a depreciable asset can be determined by its market value at a p
...
1. Adjusting entries are needed whenever transactions affect the revenue or expenses of more than one
accounting period.
True False
2. The book value of a depreciable asset can be determined by its market value at a particular time.
True False
3. The adjusting entry to record estimated income taxes in a profitable period consists of a credit to Income
Tax Expense and a debit to Income Tax Payable.
True False
4. The failure to record an adjusting entry for depreciation would cause assets to be overstated and net income
to be understated.
True False
5. The need for adjusting entries results from timing differences between the receipt or disbursement of cash
and the dates on the financial statements.
True False
6. The adjusted trial balance may be used in place of the income statement.
True False
7. The book value of an asset may also be called the market value of the asset.
True False
8. The period of time over which the cost of an asset is allocated to depreciation expense is called its useful
life.
True False
9. The adjusted trial balance combines the trial balance items with the adjusting entries to determine the
adjusted balances.
True False
10. When a company receives cash in advance and it is obligated to provide a service or a product in the future,
the entry would be a credit to a liability account and a debit to revenue.
True False
11. Adjusting entries are only required when errors are made.
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