Exam 3: Adjusting the Accounts

Sebastian Belle has performed $2,000 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Sebastian make?

Accrued revenues are amounts recorded and received but not yet recognized.

The ______________ assumption divides the economic life of a business into artificial time periods.

Compute the net income for 2018 based on the following amounts presented on the adjusted trial balance of D-Lay Company. Accumulated Depreciation - Equip. \ 20,000 Depreciation Expense 18,000 Salaries and Wages Expense 15,000 Service Revenue 40,000 Unearned Service Revenue 8,000

Sebastian Belle, CPA, has billed her clients for services performed. She subsequently receives payments from her clients. What entry will Sebastian make upon receipt of the payments?

Which of the statements below is not true?

A law firm received $3,000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause

Which of the following reflects the balances of prepayment accounts prior to adjustment?

The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to

Identify the impact on the balance sheet if the following information is not used to adjust the accounts. 1. Supplies consumed totaled $3,000. 2. Interest accrues on notes payable at the rate of $200 per month. 3. Insurance of $450 expired during the month. 4. Plant and equipment are depreciated at the rate of $1,200 per month.

Unearned revenue is classified as

Nirvana Corporation issued a one-year, 9%, $400,000 note on April 30, 2018. Interest expense for the year ended December 31, 2018 was

Mary Chain Investments purchased an 18-month insurance policy on May 31, 2018 for $3,600. The December 31, 2018 balance sheet would report Prepaid Insurance of

Adjusting entries can be classified as

Depreciation expense for a period is an ______________ rather than a factual measurement of cost that has expired.

A candy factory's employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in

A contra asset account is subtracted from a related account in the balance sheet.

Accrued revenues are revenues that have been recognized and received before financial statements have been prepared.

Expenses sometimes make their contribution to revenue in a different period than when they are paid. When salaries and wages are incurred in one period and paid in the next period, this often leads to which account appearing on the balance sheet at the end of the time period?