Exam 3: Adjusting the Accounts

Adjusting entries can be classified as

Yankee Hotel Foxtrot initiated operations on July 1 2016. To manage the company officers and managers have requested monthly financial statements starting July 31 2016. The adjusted trial balance amounts at July 31 are shown below. Cash \ 7,680 Accounts Receivable 810 Prepaid Rent 1,965 Supplies 1,160 Equipment 11,400 Owner's Drawings 800 Salaries and Wages Expense 7,145 Rent Expense 2,740 Depreciation Expense 665 Supplies Expense 580 Interest Expense Total debits Accumulated Depreciation - Equipment \ 840 Notes Payable 6,000 Accounts Payable 2,140 Salaries and Wages Payable 360 Interest Payable 40 Unearned Service Revenue 580 Owner's Capital 10,640 Service Revenue Total credits (a) Determine the net income for the month of July. (b) Determine the total assets and total liabilities at July 31 2016 for Yankee Hotel Foxtrot. (c) Determine the amount that appears for Owner's Capital at July 31 2016.

Celebraty Printings sold annual subscriptions to their magazine for $33000 in December 2015. The magazine is published monthly. The new subscribers received their first magazine in January 2016. 1. What adjusting entry should be made in January if the subscriptions were originally recorded as a liability? 2. What amount will be reported on the January 2016 balance sheet for Unearned Subscription Revenue?

Management usually desires ________ financial statements and the IRS requires all businesses to file _________ tax returns.

Revenue recognition under IFRS is

Which of the following statements concerning accrual-basis accounting is incorrect?

An adjusting entry

Bill Justice is a lawyer who requires that his clients pay him in advance of legal services rendered. Elliott routinely credits Service Revenue when his clients pay him in advance. In June Bill collected $25000 in advance fees and completed 60% of the work related to these fees. What adjusting entry is required by Bill's firm at the end of June? a. Unearned Service Revenue 15,000 Service Revenue 15,000 b. Unearned Service Revenue 10,000 Service Reyenue 10,000 c. Cash 25,000 Service Revenue 25,000 d. Service Revenue 10,000 Unearned Service Revenue 10,000

A company spends $20 million dollars for an office building. Over what period should the cost be written off?

Mulligan Company collected $12800 in May of 2016 for 5 months of service which would take place from October of 2016 through February of 2017. The revenue reported from this transaction during 2016 would be

Every adjusting entry affects one balance sheet account and one income statement account.

The adjusted trial balance of Personal Financial Planners appears below. Using the information from the adjusted trial balance you are to prepare for the month ending December 31 2016: 1. an income statement. 2. an owner's equity statement. 3. a balance sheet. Personal Financial Planners Adjusted Trial Balance December 31, 2016 Cash. \ 4,900 Accounts Receivable 2,300 Supplies 1,800 Equipment 14,000 Accumulated Depreciation-Equipment \3 ,000 Accounts Payable 3,300 Unearned Service Revenue 6,000 Owner's Capital. 14,600 Owner's Drawings 2,500 Service Revenue 4,500 Supplies Expense 700 Depreciation Expense 2,700 Rent Expense

Relevant accounting information

At December 31 2016 before any year-end adjustments Obama Company's Insurance Expense account had a balance of $2600 and its Prepaid Insurance account had a balance of $7600. It was determined that $3200 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be

The time period assumption states

On January 1 2015 Murphy Inc. purchased equipment for $38400. The company is depreciating the equipment at the rate of $800 per month. At January 31 2016 the balance in Accumulated Depreciation is

On January 1 2016 Pulque Company purchased equipment for $51000. The company is depreciating the equipment at the rate of $850 per month. The book value of the equipment at December 31 2016 is

Mullins Real Estate received a check for $30000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $30000. Financial statements will be prepared on July 31. Mullins Real Estate should make the following adjusting entry on July 31:

Consistency in accounting means that a company uses the same accounting principles from one accounting period to the next accounting period.

Compute the net income for 2016 based on the following amounts presented on the adjusted trial balance of Fley Company. Accumulated Depreciation - Equip. \ 25,000 Depreciation Expense 14,000 Salaries and Wages Expense 25,000 Service Revenue 48,000 Unearned Service Revenue 7,000