Exam 3: Accrual Accounting

Cash Express had no supplies on January 1 but purchased $2,581 in supplies during the year. At December 31, supplies on hand are $1,492. What amount for supplies will be reported on the firm's balance sheet?

Accrued expenses originate from

Select the correct revenue recognition principle for each of the following. (Choices may be used more than once.) -Rent

The following amounts were taken from a company's unadjusted trial balance at December 31, 2019: Prepare any adjusting entries necessary at December 31, 2019, for each of the transactions that follow. A)The rent collected in advance represents rent for the period of December 1, 2019, through January 31, 2020. B)In addition to the wages paid during the year, employees have not been paid for the last week of December, which amounts to $1,900.

The six steps for preparing the worksheet are unadjusted trial balance, adjusting entries, adjusted trial balance, ______________, retained earnings statement, and balance sheet.

California Condos California Condos uses the accrual basis of accounting, and had the following account balances on its financial statements at December 31, 2019. -Refer to California Condos. On January 1, the Utilities Payable Account had a zero balance. The company paid cash for utilities totaling $50,000 during 2019. How much should be reported as utilities expense for the year ended December 31, 2019?

What is the significance of the timing in which cash is paid or received as it relates to the adjusting process?

Match the following types of adjusting entries to the listed situation. (Choices may be used more than once.) -Cash

Carolina Truck Lines purchased a truck at a cost of $22,000 in 2014. As of January 1, 2019, depreciation of $18,000 had been recorded on this asset. Depreciation expense for 2019 is $2,000. Before the adjustments are recorded and posted at December 31, 2019, what is the truck's book value?

Under accrual accounting when is revenue recognized?

A local medical clinic operates five days per week with a daily payroll of $100,000. Employees are paid every Tuesday for the prior week's work (Monday through Friday). The last day of the month is Tuesday, April 30. What effect does the accrual at April 30 have on the clinic's net income?

A company borrowed $500,000 on a one-year, 10% note on October 1, 2018, with interest and principal to be paid at maturity. How much interest should be reported on the income statement for the year ending December 31, 2019?

Failure to record dividends paid would result in which of the following?

A sporting goods chain purchased supplies at a cost of $11,000 during the year. At January 1, the beginning balance in the supplies account was $3,000. At December 31, supplies on hand are $800. Determine supplies expense for the year.

Chattahoochee Excursions, a calendar year company, purchased supplies at a cost of $12,215 during 2019. At January 1, 2019, supplies on hand were $10,312. During the year, the company used $14,000 of supplies. A)What adjusting entry is prepared at December 31, 2019? B)Under the accrual basis of accounting, how much is Supplies Expense for 2019? C)How much should be reported on the December 31, 2019, balance sheet for Supplies? D)What type of adjustment was made in part A?

At the end of 2019, the unadjusted accounting records contain the following selected accounts and balances: ​ A)The company has not paid its employees for the final 3 days in 2019. The amount owed is $2,500. How much salary expense should be reported for the year ended December 31, 2019? B)What additional adjustments would you expect the company to make at year end that would result in additional revenue as a result of the accounts listed?

Failure to record the earned portion of unearned revenue would result in which of the following?

Which of the following concepts is important to accrual accounting?

Which of the following does not occur during the closing process?

Based on its income for the month, a company estimates that it will owe $23,000 of federal income taxes for the month of May. What is the effect of the adjustment on the financial statements?