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Adjusting Entries
(Practice Quiz)
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simply press or click on what you think is the
correct answer. For fill-in-the-blank questions
press or click on the blank space provided.
If you have difficulty answering the following

questions, learn more about this topic by
reading our Adjusting Entries (Explanation).
1. What type of entry will increase the normal balance of

the general ledger account Service Revenues?
Debit
Credit
2. What type of entry will increase the normal balance of

the general ledger account that reports the amount
owed as of the balance sheet date for a company's
accrued expenses?
Debit
Credit
3. What type of entry will increase the normal balances of

the general ledger accounts Electricity Expense,
Insurance Expense, Interest Expense, and Repairs
Expense?
Debit
Credit
4. What type of accounts are Interest Receivable and Fees

Receivable?
Asset
Liability
Equity
Revenue
Expense
5. What type of entry will decrease the normal balances of

the general ledger accounts Interest Receivable and
Fees Receivable?
Debit
Credit
6. What type of accounts are Deferred Revenues and

Unearned Revenues?
Asset
Liability
Equity
Revenue

the accounts Deferred Revenues and Unearned
Revenues?
Debit
Credit
8. What type of accounts are Prepaid Insurance, Prepaid

Advertising, and Prepaid Expenses?
Asset
Liability
Equity
Revenue
Expense

the accounts Prepaid Insurance and Prepaid Expenses,
and Insurance Expense?
Debit
Credit
10. What type of accounts are Accumulated Depreciation

and Allowance for Doubtful Accounts?
Contra Asset
Equity
Expense
Liability
Revenue
11. What type of entry will increase the balances that are
normally found in the accounts Accumulated
Depreciation and Allowance for Doubtful Accounts?
Debit
Credit
12. In the case of a company's accrued interest expense,

which of the following occurs first?
Incurring The Interest Expense

Paying The Interest To The Lender
13. In the case of a bank's accrued interest revenues, which

occurs first?
Earning The Interest Revenues

Receiving The Interest From The Borrower
14. In the case of a company deferring insurance expense,

which occurs first?
Incurring The Insurance Expense

Paying The Insurance Company
15. In the case of a company's deferred revenues, which

occurs first?
Earning The Revenues

Receiving The Money From The Customer
16. Which of the following will be included in the adjusting

entry to accrue interest expense?
A Debit To Cash
A Credit To Interest Payable
A Debit To Interest Payable
A Debit To Prepaid Interest
17. Which of the following will be included in the adjusting

entry to accrue interest income or interest revenues?
A Debit To Cash
A Debit To Interest Income
A Credit To Interest Receivable
A Debit To Interest Receivable
18. The adjusting entry that reduces the balance in Prepaid

Insurance will also include which of the following?
A Credit To Cash
A Credit To Insurance Expense
A Debit To Insurance Expense
A Debit To Insurance Payable
19. The adjusting entry that reduces the balance in Deferred

Revenues or Unearned Revenues will also include
which of the following?
A Debit To Cash
A Credit To Fees Earned
A Debit To Fees Earned
A Credit To Fees Receivable
20. The ending balance in the account Prepaid Insurance is

expected to report which of the following?
The Accrued Amount Of Insurance Expense

The Original Amount Of The Insurance Premiums
Paid
The Expired Portion Of The Insurance Premiums
Paid
The Unexpired Portion Of The Insurance Premiums
Paid
21. The ending balance in the account Deferred Revenues

(or Unearned Fees) should report which of the
following?
The Accrued Amount Of Fees That Have Been

Earned
The Original Amount Of Fees Received In Advance
From A Customer
The Fees Received In Advance Which Are Not Yet
Earned
The Amount Of Fees Received In Advance And
Which Are Now Earned
22. Which type of adjusting entry is often reversed on the

first day of the next accounting period?
Accrual
Deferral
Depreciation
23. Typically an adjusting entry will include which of the

following?
One Balance Sheet Account And One Income

Statement Account
Two Balance Sheet Accounts
Two Income Statement Accounts
Use the following information to answer questions

24 - 29:
A company borrowed $100,000 on December 1 by
signing a six-month note that specifies interest at an
annual percentage rate (APR) of 12%. No interest or
principal payment is due until the note matures on May
31. The company prepares financial statements at the
end of each calendar month. The following questions
pertain to the adjusting entry that should be entered in
the company's records.
24. What date should be used to record the December

adjusting entry?
Answer
25. How many accounts are involved in the adjusting entry?
Answer
26. What is the name of the account that will be debited?
Answer
27. What is the name of the account that will be credited?
Answer
28. What is the amount of the debit and the credit?
Answer
29. What would be the effect on the financial statements if

the company fails to make the adjusting entry on
December 31?
Answer

30 - 35:
A bank lent $100,000 to a customer on December 1 that
required the customer to pay an annual percentage rate
(APR) of 12% on the amount of the loan. The loan is
due in six months and no payment of interest or
principal is to be made until the note is due on May 31.
The bank prepares monthly financial statements at the
end of each calendar month. The following questions
pertain to the adjusting entry that the bank will be
making for its accounting records.

adjusting entry?
Answer
Answer
32. What is the name of the account that should be

debited?
Answer
33. What is the name of the account that should be

credited?
Answer
Answer

December 31?
Answer

36 - 41:
On December 1, your company paid its insurance agent
$2,400 for the annual insurance premium covering the
twelve-month period beginning on December 1. The
$2,400 payment was recorded on December 1 with a
debit to the current asset Prepaid Insurance and a
credit to the current asset Cash. Your company
prepares monthly financial statements at the end of
each calendar month. The following questions pertain to
the adjusting entry that should be written by the
company.

adjusting entry?
Answer
Answer
Answer
Answer
Answer

December 31?
Answer

42 - 47:
On December 1, your company paid its insurance agent
$2,400 for the annual insurance premium covering the
twelve-month period beginning on December 1. The
$2,400 payment was recorded on December 1 with a
debit to the income statement account
Insurance Expense and a credit to the current asset
Cash. Your company prepares monthly financial
statements at the end of each calendar month. The
following questions pertain to the adjusting entry that
should be written by the company.

adjusting entry?
Answer
Answer
Answer
Answer
Answer

December 31?
Answer

48 - 53:
On December 1, XYZ Insurance Co. received $2,400
from your company for the annual insurance premium
covering the twelve-month period beginning on
December 1. XYZ Insurance Co. recorded the $2,400
receipt as of December 1 with a debit to the current
asset Cash and a credit to the current liability
Unearned Revenues. XYZ Insurance Co. prepares
monthly financial statements at the end of each
calendar month. The following questions pertain to the
adjusting entry that should be written by the XYZ
Insurance Co.

adjusting entry?
Answer
Answer
Answer
Answer
Answer

December 31?
Answer

54 - 59:
On December 1, your company began operations. On
December 3 it purchased $1,500 of supplies and
recorded the transaction with a debit to the current asset
Supplies and a credit to the current liability
Accounts Payable. Your company prepares monthly
financial statements at the end of each calendar month.
At the end of the day on December 31, your company
estimated that $700 of the supplies were still on hand in
the supply room. The following questions pertain to the
adjusting entry that should be entered by your
company.

adjusting entry?
Answer
Answer
Answer
Answer
Answer

December 31?
Answer

60 - 65:
On December 1, your company began operations. On
December 4 it purchased $1,500 of supplies and
recorded the transaction with a debit to the income
statement account Supplies Expense and a credit to
the current liability Accounts Payable. Your company
prepares monthly financial statements at the end of
each calendar month. At the end of the day on
December 31, your company estimated that $700 of the
supplies were still on hand in the supply room. The
following questions pertain to the adjusting entry that
should be entered by your company.

adjusting entry?
Answer
Answer
Answer
Answer
Answer

December 31?
Answer
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For multiple-choice and true/false questions,

If you have difficulty answering the following

1. What type of entry will increase the normal balance of

2. What type of entry will increase the normal balance of

3. What type of entry will increase the normal balances of

4. What type of accounts are Interest Receivable and Fees

5. What type of entry will decrease the normal balances of

6. What type of accounts are Deferred Revenues and

7. What type of entry will decrease the normal balances of

8. What type of accounts are Prepaid Insurance, Prepaid

9. What type of entry will decrease the normal balances of

10. What type of accounts are Accumulated Depreciation

12. In the case of a company's accrued interest expense,

Incurring The Interest Expense

13. In the case of a bank's accrued interest revenues, which

Earning The Interest Revenues

14. In the case of a company deferring insurance expense,

Incurring The Insurance Expense

15. In the case of a company's deferred revenues, which

Earning The Revenues

16. Which of the following will be included in the adjusting

17. Which of the following will be included in the adjusting

18. The adjusting entry that reduces the balance in Prepaid

19. The adjusting entry that reduces the balance in Deferred

20. The ending balance in the account Prepaid Insurance is

The Accrued Amount Of Insurance Expense

21. The ending balance in the account Deferred Revenues

The Accrued Amount Of Fees That Have Been

22. Which type of adjusting entry is often reversed on the

23. Typically an adjusting entry will include which of the

One Balance Sheet Account And One Income

Use the following information to answer questions

24. What date should be used to record the December

25. How many accounts are involved in the adjusting entry?

26. What is the name of the account that will be debited?

27. What is the name of the account that will be credited?

28. What is the amount of the debit and the credit?

29. What would be the effect on the financial statements if

Use the following information to answer questions

30. What date should be used to record the December

31. How many accounts are involved in the adjusting entry?

32. What is the name of the account that should be

33. What is the name of the account that should be

34. What is the amount of the debit and the credit?

35. What would be the effect on the financial statements if

Use the following information to answer questions

36. What date should be used to record the December

37. How many accounts are involved in the adjusting entry?

38. What is the name of the account that will be debited?

39. What is the name of the account that will be credited?

40. What is the amount of the debit and the credit?

41. What would be the effect on the financial statements if

Use the following information to answer questions

42. What date should be used to record the December

43. How many accounts are involved in the adjusting entry?

44. What is the name of the account that will be debited?

45. What is the name of the account that will be credited?

46. What is the amount of the debit and the credit?

47. What would be the effect on the financial statements if

Use the following information to answer questions

48. What date should be used to record the December

49. How many accounts are involved in the adjusting entry?

50. What is the name of the account that will be debited?