Exam 3: Adjusting the Accounts

The trial balances before and after adjustments for Old Julian Calendars at the end of its fiscal year are presented below. Cont'd Instructions Prepare the adjusting entries that were made.

Unearned revenue is a prepayment that requires an adjusting entry when services are performed.

An accumulated depreciation account

A new accountant working for Spirit Walker Company records $900 Depreciation Expense on store equipment as follows: Depreciation Expense 900 Cash 900 The effect of this entry is to

When a prepaid expense is initially debited to an expense account, expenses and assets are both overstated prior to adjustment.

The adjusted trial balance of C.S. Financial Planners appears below. Using the information from the adjusted trial balance, you are to prepare for the month ending December 31, 2018: 1. an income statement. 2. a retained earnings statement. 3. a balance sheet.

Which one of the following is not an enhancing quality of useful information?

Buena Vista Social Club accumulates the following adjustment data at December 31. 1. Revenue of $1,600 collected in advance has been recognized. 2. Salaries of $600 are unpaid. 3. Prepaid rent totaling $500 has expired. 4. Supplies of $450 have been used. 5. Revenue recognized but unbilled total $750. 6. Utility expenses of $250 are unpaid. 7. Interest of $300 has accrued on a note payable. Instructions (a) For each of the above items indicate: 1. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense). 2. The account relationship (asset/liability, liability/revenue, etc.). 3. The status of account balances before adjustment (understatement or overstatement). 4. The adjusting entry. (b) Assume net income before the adjustments listed above was $15,500. What is the adjusted net income? Prepare your answer in the tabular form presented below.

On January 1, 2017, Doolittle Company purchased furniture for $7,560. The company expects to use the furniture for 3 years. The asset has no salvage value. The book value of the furniture at December 31, 2018 is

Under IFRS, income is defined as

Dinosaur Junior Corporation purchased a one-year insurance policy in January 2018 for $75,000. The insurance policy is in effect from May 2018 through April 2019. If the company neglects to make the proper year-end adjustment for the expired insurance

An accounting time period that is one year in length, but does not begin on January 1, is referred to as

Ultramega Company collected $19,600 in May of 2018 for 4 months of service which would take place from October of 2018 through January of 2019. The revenue reported from this transaction during 2018 would be

Which of the following is not a common time period chosen by businesses as their accounting period?

Unearned revenues are

Revenue recognition fraud is

A business pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on a Thursday is

A liability-revenue account relationship exists with an unearned rent revenue adjusting entry.

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

The Accumulated Depreciation account is a contra asset account that is reported on the balance sheet.