Exam 3: Adjusting the Accounts

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, 2010: 1. an income statement. 2. an owner's equity statement. 3. a balance sheet.

Which of the following statements related to the adjusted trial balance is incorrect?

At March 1, Progressive Auto Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $750 and consumed supplies of $800. If no adjusting entry is made for supplies

CHS Company purchased a truck from JLS Corp. by issuing a 6-month, 8% note payable for $60,000 on November 1. On December 31, the accrued expense adjusting entry is

On January 1, 2010, Masters and Masters Company purchased equipment for $30,000. The company is depreciating the equipment at the rate of $700 per month. The book value of the equipment at December 31, 2010 is

A new accountant working for Unitas Company records $800 Depreciation Expense on store equipment as follows: The effect of this entry is to

RAS Corporation issued a one-year, 12%, $200,000 note on August 31, 2010. Interest expense for the year ended December 31, 2010 was

On January 1, 2009, Grills and Grates Inc. purchased equipment for $30,000. The company is depreciating the equipment at the rate of $400 per month. At January 31, 2010, the balance in Accumulated Depreciation is

The Aces, a semi-professional baseball team, prepare financial statements on a monthly basis. Their season begins in April, but in March the team engaged in the following transactions: (a) Paid $120,000 to Kansas City as advance rent for use of Kansas City Stadium for the six month period April 1 through September 30. (b) Collected $250,000 cash from sales of season tickets for the team's 20 home games. This amount was credited to Unearned Ticket Revenue. During the month of April, the Aces played four home games and five road games. Instructions Prepare the adjusting entries required at April 30 for the transactions above.

Asset prepayments become expenses when they expire.

The adjusted trial balance of Allen's Automotive Service Company on June 30, 2010 includes the following accounts: Repair Supplies, $300; Accumulated Depreciation, $8,500; Wages Payable, $550, Note Payable $5,000; Repair Revenue, $22,100; Salaries Expense, $5,750; Depreciation Expense, $2,250; Repair Supplies Expense, $1,000; Rent Expense, $400; Utilities Expense, $350; and Interest Expense $250. Prepare an income statement for the month of June.

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the

Rent received in advance and credited to a rent revenue account which is still unearned at the end of the period, will require an adjusting entry crediting a liability account for the amount still unearned.

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

Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause

Bee-In-The-Bonnet Company purchased office supplies costing $6,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $2,400 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

Jenni's Music Store borrowed $12,000 from the bank signing a 9%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be

Unearned revenues are

On July 1, Runner's Sports Store paid $8,000 to Acme Realty for 4 months rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by Runner's Sports Store is

Expenses sometimes make their contribution to revenue in a different period than when the expense is paid. When 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?