Adjusting entries made at the end of an accounting period accomplish all of the following except:a)Assuring that financial statements reflect the revenues earned and the expenses incurred.b)Assigning revenues to the periods in which they are earned.c)Assuring that external transaction amounts remain unchanged.d)Assigning expenses to the periods in which they are incurred.e)Updating liability and asset accounts to their proper balances.
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Which of the following is classified as a current asset?Unearned revenue.Land.Patent.Office supplies.Office equipment.
It is obvious that an error occurred in the preparation and/or posting of closing entries if:a) the income summary account is debited for the amount of net income for the period.b) all revenue and expense accounts have zero balances.c) only permanent accounts appear on the post-closing trial balance.d) the Retained earnings account is debited for the amount of the net loss for the period.e) all balance sheet accounts have zero balances.
For the year ended December 31, a company had revenues of $187,000 and expenses of $109,000. $37,000 in dividends were paid during the year. Which of the following entries could not be a closing entry?Debit revenues $187,000; credit Income Summary $187,000.Debit Retained earnings $37,000; credit Dividends $37,000.Debit Income Summary $187,000; credit revenues $187,000.Debit Income Summary $109,000, credit expenses $109,000.Debit Income Summary $78,000; credit Retained earnings $78,000.
On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a marketing campaign effective from May 1 of the current year to April 30 of the following year. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the fees had been earned. Assuming adjustments are only made at year-end, the adjusting entry on December 31 would be:
A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:
A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledger balance before any adjustment is $2,100. What is the adjusting entry for office supplies that should be recorded on May 31?
Which of the following statements is incorrect?a) Adjusting entries can be used to record both accrued expenses and accrued revenues.b) Adjusting entries affect only balance sheet accounts.c) Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded.d) Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time.e) Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities.
Which of the following statements is incorrect?a) Financial statements should be prepared directly from information in the unadjusted trial balance.b) An adjusted trial balance is a list of accounts and balances prepared after adjusting entries have been recorded and posted to the ledger.c) An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.d) Financial statements can be prepared directly from information in the adjusted trial balance.e) Each trial balance amount is used in preparing the financial statements.
a) Financial statements should be prepared directly from information in the unadjusted trial balance.
Palmer Company is at the end of its annual accounting period. The accountant has journalized and posted all external transactions and all adjusting entries, has prepared an adjusted trial balance, and completed the financial statements. The next step in the accounting cycle is:
If accrued salaries were recorded on December 31 with a debit to Salaries Expense and a credit to Salaries Payable, and no reversing entries were made on January 1, the entry to record payment of these wages on the following January 5 would include:
A company purchased a new delivery van at a cost of $45,000 on July 1. The delivery van is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the van during the first year ended December 31?
On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company”s annual accounting period ends on December 31, and adjustments are only made at year-end. The adjusting entry needed on December 31 is:
Debit Interest Receivable, $1,000; credit Interest Revenue, $1,000. ($100,000 0.06 60/360 = $1,000)
Two accounting principles central to accrual accounting basis that are relied on in the adjusting process are:
On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Olive should record:
On January 1, Fashion Forward Magazine received $15,000 from subscribers for the annual subscriptions that it recorded in Unearned Subscription Revenue. The issues of the magazine are mailed to subscribers quarterly. What amount of subscription revenue should the magazine recognize on March 31 when the first issue is sent in March?
The balances in Labeille Accounting Services” office supplies account on February 1 and February 28 were $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?
$1,075$1,200 + Supplies Purchased − $1,900 = $375Supplies Purchased − $700 = $375Supplies Purchased = $1,075
A classified balance sheet presents information in a manner that makes it easier to calculate a company”s current ratio.
On January 1, Eastern College received $1,200,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28?