Exam 3: Adjusting the Accounts

The 20x5 income statement for Almond Company showed rent expense of $10,800 and salaries expense of $7,200.The related balance sheet account balances at year end for last year and this year were as follows: a.Compute cash paid for rent during the year. b.Compute cash paid for salaries during the year.

Which of the following is not an application of accrual accounting?

Net income provides a good measure of a business's debt-paying ability.

Net income is misleading when revenue is overstated or expenses are understated by significant amounts.

Prepaid Rent was $800 at the end of May and $1,300 at the end of June.Rent Expense for June was $720.How much cash was paid for rent during June?

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows: -If as of December 31,2014,the rent of $100 for December had not been recorded or paid,the adjusting entry would include a

Financial statement time periods should be of equal length

Use this information pertaining to Tucson Company to answer the following question. 1.The corporation's Supplies account showed a beginning debit balance of $400 and supplies purchased of $1,600.There were $600 of supplies on hand at year end. 2)Depreciation on a building is estimated to be $10,000. 3)A one-year insurance policy was purchased for $4,000.Six months have passed since the purchase. 4)Accrued interest on a note receivable amounted to $200. 5)The company received a $3,600 advance payment during the year on services to be performed.By the end of the year,one-third of the services had been performed. The adjusting entry to record the amount of service revenue earned during the accounting period is

Which of the following accounts is a contra account?

Which of the following is one of the conditions for recognition of an expense?

The following steps in the accounting cycle are presented out of order below.Arrange the steps in proper order by placing a number from 1 through 6 in the blanks provided.Also identify each step as either a recurring activity (RA)-one that would be repeated during the fiscal period-or an end-of-period activity (EOP)-one performed at the end of the accounting period. ______ a.Prepare an adjusted trial balance. ______ b.Record entries in the journal. ______ c.Adjust the accounts. ______ d.Prepare a trial balance. ______ e.Analyze business transactions from source documents. ______ f.Post entries to the ledger.

A deferral is the recognition of an expense that has arisen but has not yet been recorded.

The manipulation of revenues and expenses to achieve a specific outcome is called

In accounting,depreciation refers to the decline in fair value of a plant asset.

The adjusted trial balance may contain accounts that did not appear in the trial balance.

Due to the recording of adjusting entries,the dollar amount of Cash on the trial balance is usually less than the dollar amount of Cash on the adjusted trial balance.

Which of the following actions can distort company records and result in fraudulent financial reporting?

Gravel Manufacturing had supplies on hand costing $480 on December 31.During the same year,supplies costing $320 were purchased,and $640 in supplies were consumed during the year.What was the cost of supplies on hand on January 1 of that year?

Failure to adjust for expired prepaid insurance at year end will result in an

Which two broad account categories are used to determine net income? Define each category and list two examples of each type.