Question 1

On November 15, Great Designs Company purchased an advertising campaign for the month of December. Great Designs paid cash of $2,700 in advance. The advertising campaign ran in December and was completed on December 31.​
(a) Prepare all necessary journal entries for the advertising campaign for November and December .(b) Explain why you prepared this/these journal entries.

Accepted Answer

The answer of On November 15, Great Designs Company purchased...

Question 2

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Accepted Answer

A) True 
 B)False

Question 3

Match the type of account (a - e) with the business transactions that follow.
-Services provided that have not been recorded.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 4

Match the type of account (a - e) with the business transactions that follow.
-Retainer fee received from a client for future legal representation.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 5

Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n)

Accepted Answer

A) asset 
B) liability 
C) stockholders' equity account 
D) contra liability

Question 6

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

Accepted Answer

A) prepaid 
B) deferred 
C) accrued 
D) matched

Question 7

The account type and normal balance of Prepaid Expense is

Accepted Answer

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

Question 8

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.

Accepted Answer

The answer of Identify the effect (a - h) that...

Question 9

Adjusting journal entries are dated on the last day of the period.

Accepted Answer

A) True 
 B)False

Question 10

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

Accepted Answer

A) $56,700 
B) $58,000 
C) $55,800 
D) $54,500

Question 11

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

Question 12

Prepare adjusting entries for the following transactions:
(a)The beginning balance of the supplies account was $245. During the month the company bought additional supplies in the amount of $735. At the end of the month a physical inventory showed $343 of unused supplies.(b)The company has a 12% note payable in the amount of $17,000 due in 6 months. The interest expense of $170 for the month has not been recorded.(c)The company has two employees. The manager is paid on the 15th of every month for work performed during the first half of the month and on the 1st of the following month for the work performed during the second half of the month. His monthly salary is $5,500. The other employee is paid $650 for each 5-day work week (Monday - Friday). The last day of the month fell on Thursday.(d)The unearned fees account shows a balance of $46,000. According to the manager 60% of that amount has been earned.(e)At the end of the month $5,700 of services had been performed but not yet billed.

Accepted Answer

The answer of Prepare adjusting entries for the following transactions:
(a)The...

Question 13

The type of account and normal balance of Prepaid Insurance is

Accepted Answer

A) asset, credit 
B) asset, debit 
C) contra asset, credit 
D) contra asset, debit

Question 14

The matching principle

Accepted Answer

A) addresses the relationship between the journal and the balance sheet 
B) determines whether the normal balance of an account is a debit or credit 
C) requires that the dollar amount of debits equal the dollar amount of credits on a trial balance 
D) states that the revenues and related expenses should be reported in the same period

Question 15

At the end of April, the first month of the company's year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on (a) the income statement for April and (b) the balance sheet as of April 30. Also indicate whether the items in error will be overstated or understated.

Accepted Answer

The answer of At the end of April, the first...

Question 16

Data for an adjusting entry described as "accrued taxes, $950" requires a

Accepted Answer

A) debit to Taxes Expense and a credit to Unpaid Taxes Expense 
B) debit to Retained Earnings and a credit to Taxes Expense 
C) debit to Taxes Payable and a credit to Taxes Expense 
D) debit to Taxes Expense and a credit to Taxes Payable

Question 17

At the end of the fiscal year, the usual adjusting entry to prepaid insurance to record expired insurance was omitted. Which of the following statements is true?

Accepted Answer

A) total assets at the end of the year will be understated. 
B) stockholders' equity at the end of the year will be understated. 
C) net income for the year will be overstated. 
D) insurance expense will be overstated

Question 18

Adjusting entries affect only expense and asset accounts.

Accepted Answer

A) True 
 B)False

Question 19

Match the type of account (a - e) with the business transactions that follow.
-Provided tutoring for a student that will be invoiced next month.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 20

Accrued expenses are ordinarily reported on the balance sheet as

Accepted Answer

A) assets 
B) liabilities 
C) fixed assets 
D) prepaid expenses

Exam 3: The Adjusting Process

If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.

Match the type of account (a - e) with the business transactions that follow. -Services provided that have not been recorded. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Match the type of account (a - e) with the business transactions that follow. -Retainer fee received from a client for future legal representation. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheet as a(n)

The term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is

The account type and normal balance of Prepaid Expense is

Adjusting journal entries are dated on the last day of the period.

The net income reported on the income statement is $58,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net income, as corrected, is

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

The type of account and normal balance of Prepaid Insurance is

The matching principle

Data for an adjusting entry described as "accrued taxes, $950" requires a

At the end of the fiscal year, the usual adjusting entry to prepaid insurance to record expired insurance was omitted. Which of the following statements is true?

Adjusting entries affect only expense and asset accounts.

Match the type of account (a - e) with the business transactions that follow. -Provided tutoring for a student that will be invoiced next month. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Accrued expenses are ordinarily reported on the balance sheet as