Question 1

Journalize the six entries to adjust the accounts at December 31. 
(Hint: One of the accounts was affected by two different adjusting entries).??   ???????????????????????

Accepted Answer

The answer of Journalize the six entries to adjust the...

Question 2

A business pays biweekly salaries of $20,000 every other Friday for a 10-day period ending on that day. The last payday of December is Friday, December 27. Assume the next pay period begins on Monday, December 30 and the proper adjusting entry is journalized at the end of the fiscal period 
(December 31). Journalize the entry for the payment of the payroll on Friday, January 10. $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Date } & \text { Description } & \begin{array} { c } 
\text { Post. } \
\text { Ref. }
\end{array} & \text { Debit } & \text { Credit } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}$$

Accepted Answer

Accrued Salaries for December

Question 3

By matching revenue earned during the accounting period to related incurred expenses,

Accepted Answer

A)  net income or loss will always be underestimated 
B)  net income or loss will always be overestimated 
C)  net income or loss will be properly reported on the income statement 
D)  net income or loss will not be determined 
A)  net income or loss will always be underestimated 
B)  net income or loss will always be overestimated 
C)  net income or loss will be properly reported on the income statement 
D)  net income or loss will not be determined

Question 4

The account type and normal balance of Prepaid Expense would be

Accepted Answer

A)  revenue, credit 
B)  expense, debit 
C)  liability, credit 
D)  asset, debit 
A)  revenue, credit 
B)  expense, debit 
C)  liability, credit 
D)  asset, debit

Question 5

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and
(3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors on revenues, expenses, and net income?

Accepted Answer

A)  Revenues are overstated by $4,200. 
B)  Net income is overstated by $2,300. 
C)  Expenses are overstated by $6,500. 
D)  Expenses are understated by $3,500. 
A)  Revenues are overstated by $4,200. 
B)  Net income is overstated by $2,300. 
C)  Expenses are overstated by $6,500. 
D)  Expenses are understated by $3,500.

Question 6

The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having

Accepted Answer

A)  expenses understated and therefore net income overstated 
B)  revenues understated and therefore net income understated 
C)  expenses understated and therefore net income understated 
D)  expenses overstated and therefore net income understated 
A)  expenses understated and therefore net income overstated 
B)  revenues understated and therefore net income understated 
C)  expenses understated and therefore net income understated 
D)  expenses overstated and therefore net income understated

Question 7

If the adjustment for accrued salaries at the end of the period is inadvertently omitted, both liabilities and stockholders' equity will be understated for the period.

Accepted Answer

A) True 
 B)False

Question 8

The updating of accounts when financial statements are prepared is called the adjusting process.

Accepted Answer

A) True 
 B)False

Question 9

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

Accepted Answer

A) True 
 B)False

Question 10

When is the adjusted trial balance prepared?

Accepted Answer

A)  before adjusting journal entries are posted 
B)  after adjusting journal entries are posted 
C)  after the adjusting journal entries are journalized 
D)  before the adjusting journal entries are journalized 
A)  before adjusting journal entries are posted 
B)  after adjusting journal entries are posted 
C)  after the adjusting journal entries are journalized 
D)  before the adjusting journal entries are journalized

Question 11

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Accepted Answer

A) True 
 B)False

Question 12

Using accrual accounting, expenses are recorded and reported only

Accepted Answer

A)  when they are incurred, whether or not cash is paid 
B)  when they are incurred and paid at the same time 
C)  if they are paid before they are incurred 
D)  if they are paid after they are incurred 
A)  when they are incurred, whether or not cash is paid 
B)  when they are incurred and paid at the same time 
C)  if they are paid before they are incurred 
D)  if they are paid after they are incurred

Question 13

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Accepted Answer

A) True 
 B)False

Question 14

On December 31, the balance in the office supplies account is $1,385. A physical count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Accepted Answer

$1,385 − $

Question 15

Data for an adjusting entry described as "accrued wages, $2,020" requires a

Accepted Answer

A)  debit to Wages Expense and a credit to Wages Payable 
B)  debit to Wages Payable and a credit to Wages Expense 
C)  debit to Accounts Receivable and a credit to Wages Expense 
D)  debit to Dividends and a credit to Wages Payable 
A)  debit to Wages Expense and a credit to Wages Payable 
B)  debit to Wages Payable and a credit to Wages Expense 
C)  debit to Accounts Receivable and a credit to Wages Expense 
D)  debit to Dividends and a credit to Wages Payable

Question 16

Accrued revenues would affect _______ on the balance sheet.

Accepted Answer

A)  assets 
B)  liabilities 
C)  owner's capital 
D)  prepaid expenses 
A)  assets 
B)  liabilities 
C)  owner's capital 
D)  prepaid expenses

Question 17

Match the type of account (a through e) with the business transactions that follow.
-A contract to provide tutoring services beginning next month was signed.

Accepted Answer

A) Prepaid expense 
B) Accrued expense 
C) Unearned revenue 
D) Accrued revenue 
E) None of these choices 
A) Prepaid expense 
B) Accrued expense 
C) Unearned revenue 
D) Accrued revenue 
E) None of these choices

Question 18

The unexpired insurance at the end of the fiscal period represents a (n)

Accepted Answer

A)  accrued asset 
B)  accrued liability 
C)  accrued expense 
D)  deferred expense 
A)  accrued asset 
B)  accrued liability 
C)  accrued expense 
D)  deferred expense

Question 19

At year-end, the balance in the prepaid insurance account, prior to any adjustments, is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

Accepted Answer

A) True 
 B)False

Question 20

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available.​​   ​
(a) Reconstruct the adjusting entries and give a brief explanation of each.
(b) What is the amount of net income?

Accepted Answer

The answer of REM Consulting is completing the accounting information...

Exam 3: The Adjusting Process

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).?? ???????????????????????

By matching revenue earned during the accounting period to related incurred expenses,

The account type and normal balance of Prepaid Expense would be

The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having

If the adjustment for accrued salaries at the end of the period is inadvertently omitted, both liabilities and stockholders' equity will be understated for the period.

The updating of accounts when financial statements are prepared is called the adjusting process.

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

When is the adjusted trial balance prepared?

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

Using accrual accounting, expenses are recorded and reported only

An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

On December 31, the balance in the office supplies account is $1,385. A physical count shows $435 worth of supplies on hand. Prepare the adjusting entry for supplies.

Data for an adjusting entry described as "accrued wages, $2,020" requires a

Accrued revenues would affect _______ on the balance sheet.

Match the type of account (a through e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed.

The unexpired insurance at the end of the fiscal period represents a (n)

At year-end, the balance in the prepaid insurance account, prior to any adjustments, is $6,000. The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available.​​ ​ (a) Reconstruct the adjusting entries and give a brief explanation of each. (b) What is the amount of net income?

Introduction to Accounting and Business

Analyzing Transactions

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. (a) Reconstruct the adjusting entries and give a brief explanation of each. (b) What is the amount of net income?