Exam 3: Adjusting Accounts for Financial Statements

On December 31, Cartier Company had performed $8,000 of management services for clients that had not yet been billed to the clients. Prepare an adjusting entry to record these fees.

Adjusting entries are always dated at the end of the accounting period.

Companies with little seasonal variation in sales often choose the calendar year as their fiscal year.

Correcting an error always requires two entries.

The premium on a three-year insurance policy purchased on June 30, 2020, was $36,000. What is the amount of insurance expense that should be presented on the company's income statement for the year ended December 31, 2020?

An account the balance of which is subtracted from the balance of a related account so that more complete information than simply the net amount is provided is a(n)

A $6,440 debit to interest expense was incorrectly posted as a $644 debit. What is the effect of this error on the trial balance and the interest expense accounts?

Noble Company has 50 employees who are each paid $200 per day for a 5-day workweek. The employees are paid every Friday. This year the accounting period ends on Tuesday. What is the December 31 adjusting journal entry Noble Company should make to accrue salaries owing?

Vanderet's Computer Business owns computer equipment which cost $3,240 and has an expected useful life of three years. No residual value is expected. At the company's yearend, December 31, the equipment's book value is $2,520. In what month was the computer purchased using the straight-line depreciation method?

The account format of the balance sheet matches the accounting equation. Assets are on the left side of the statement. Liabilities and equity are on the right side of the statement.

Prepare general journal entries on December 31, 2020 to record the following unrelated year-end adjustments.

The report format is considered to be the only correct format for the balance sheet.

Canadian ASPE allows accrual accounting as an option whereas IFRS requires accrual accounting.

Which of the following would be the effect of a transaction to expense Supplies for the period?

The expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets, is called

MegaTech Company has total monthly revenues of $325,000 and expenses of $198,000 for the month ended July 31 before monthly adjusting entries are made. The following data are provided on the end of month adjustments to be made: a. Insurance expired in July, $2,520.b. Unbilled amounts to customers for July is $4,200.c. Salaries earned by employees but not yet paid by MegaTech for the last week of July, $13,125.d. Depreciation on equipment for July, $1,290.e. Supplies used in July, $1,650.f. Fees collected in advance from customers which have now been earned during July, $23,400. Complete the schedule below to determine the profit of MegaTech for July after these adjustments are recorded. Begin your schedule with income before adjusting entries and then show the effect of each adjustment to arrive at profit after adjustment.

Earned but uncollected revenues that are recorded during the adjusting process, with a credit to a revenue account and a debit to an expense account, are referred to as accrued expenses.

Below is the adjusted trial balance of Reuben's Cubic Storage at December 31, 2020: Use the adjusted trial balance to answer the following questions: -Prepare a classified balance sheet at December 31, 2020.

The matching principle requires that revenue be assigned to the accounting period in which it is earned.

Gallery Corp. performs 20 days' work on a 30-day contract. The total contract is valued at $6,000. The adjusting entry of $4,000 includes a credit to unearned revenue.