Exam 3: Adjusting Accounts for Financial Statements

For the year ended December 31,a company has revenues of $317,000 and expenses of $196,000.The company paid $50,000 in dividends during the year.The balance in the Retained earnings account before closing is $81,000.Which of the following entries would be used to close the dividends account?

The difference between the cost of an asset and the accumulated depreciation for that asset is called

Chase Company rents space to a tenant for $2,200 per month.The tenant currently owes rent for November and December.The tenant has agreed to pay the November,December,and January rents in full on January 15 and has agreed not to fall behind again.The adjusting entry needed on December 31 is:

On October 1,Vista View Company rented warehouse space to a tenant for $2,500 per month.The tenant paid five months' rent in advance on that date,with the lease beginning immediately.The cash receipt was credited to the Unearned Rent account.The company's annual accounting period ends on December 31.The adjusting entry needed on December 31 is:

Which of the following statements is incorrect?

Karl Company accrued wages of $7,350 that were earned by employees unpaid at the year-end.Assuming Karl uses reversing entries,which of the following entries correctly reverses the accrued wages at the beginning of the following year?

The following unadjusted and adjusted trial balances are from the current year's accounting system for Excelsior. Excelsior Trial Balances For Year Ended December 31 Present the six adjusting entries in general journal form that explain the changes in the account balances from the unadjusted to the adjusted trial balance.

The Retained earnings account has a credit balance of $37,000 before closing entries are made.Total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000.What is the correct closing entry for the expense accounts?

a)Prepare a classified balance sheet for Martin Air Freight based on the adjusted trial balance shown below.b)Prepare the required closing entries. * $2,000 of the long-term note payable is due during the next year.

All of the following statements regarding a work sheet are true except:

How is the current ratio calculated? How is it used to evaluate a company?

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following: 1.Office supplies used during the period,$1,200. 2.Expiration of prepaid rent,$700. 3.Accrued salaries expense,$500. 4.Depreciation expense,$800. 5.Accrued service fees receivable,$400. The Adjusted Trial Balance columns total is:

Harrod Company paid $4,800 for a 4-month insurance premium in advance on November 1,with coverage beginning on that date.The balance in the prepaid insurance account before adjustment at the end of the year is $4,800 and no adjustments had been made previously.The adjusting entry required on December 31 is:

Interim financial statements refer to financial reports:

Closing entries are required:

The recurring steps performed each reporting period in preparing financial statements,starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance,is referred to as the:

On December 1,Casualty Insurance Company borrowed $50,000 at a 6.0% interest rate from One Mutual Bank.The note payable plus interest will not be paid until April 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:

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:

The expense recognition (matching)principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses,not when cash is paid.

On May 1,a two-year insurance policy was purchased for $18,000 with coverage to begin immediately.What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?