Exam 3: The Adjusting Process

Which of the following accounting terms assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods,such as a month,quarter,or year?

The accounting records of Marcus Service Company include the following selected,unadjusted balances at June 30: Accounts Receivable,$2,700;Office Supplies,$1,800;Prepaid Rent,$3,600;Equipment,$15,000;Accumulated Depreciation - Equipment,$1,800;Salaries Payable,$0;Unearned Revenue,$2,400;Office Supplies Expense,$2,800;Rent Expense,$0;Salaries Expense,$15,000;Service Revenue,$40,500. The following data developed for adjusting entries are as follows: a.Service revenue accrued,$1,400 b.Unearned Revenue that has been earned,$800 c.Office Supplies on hand,$700 d.Salaries owed to employees,$1,800 e.One month of prepaid rent has expired,$1,200 f.Depreciation on equipment,$1,500 Journalize the adjusting entries.Omit explanations.

In the case of a deferred expense,the adjusting entry required at the end of a period will consist of a credit to the Prepaid Expense account.Assume the deferred expense was initially recorded as an asset.

The following extract was taken from the worksheet of Dutch Company for the year 2016. From the above information,determine the amount of the Rent Expense adjustment.

The sum of all the depreciation expenses recorded to date for a depreciable asset is called residual value.

Generally Accepted Accounting Principles (GAAP)require the use of accrual basis of accounting.

Laramie Company signed a contract with a service provider for security services at a rate of $270 per month for the period of January through June.Laramie Company will pay the service provider the entire amount at the end of June.The company makes adjusting entries each month.During the month of June,it should record total security expense of $540.

On March 1,2016,LeBlanc Company paid $60,000 for office rent covering the three-month period ending May 31,2016.Journalize the adjusting entry on March 31 by using the alternative treatment of deferred expenses.

The worksheet is a useful step in preparing adjusting entries and the unadjusted trial balance.

The accountant of Skyscrapers Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense.Which of the following statements is true?

Which of the following statements is true of accrual basis accounting?

Financial statements are prepared from the balances in a(n)________.

An expense that has been incurred but not yet paid is called a(n)________.

Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost,$6,960 with useful life of eight years;Furniture: Cost,$19,200 with useful life of 12 years;and Computer: Cost,$14,000 with useful life of four years.(Assume residual value of all the assets is zero. )Ursula's monthly depreciation expense calculated using the straight-line method is ________.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

The goal of the time period concept is to compute an accurate net income or net loss.

A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a ________.The company uses a liability account for revenue received in advance.

An internal document that helps summarize data for the preparation of financial statements is called a ________.

An adjusted trial balance does not list the revenues and expenses of a business.

Accrued revenue is revenue that ________.

The accountant of Delta Company failed to make an adjusting entry to record $6,000 of unearned service revenue that has now been earned.Assume the deferred revenue was initially recorded as a liability.Which of the following statements is true?