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Exam 3: The Adjusting Process

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Question 21

Essay

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At the end of the fiscal year,the following adjusting entries were omitted: Assuming that financial statements were prepared before the errors were discovered,indicate the effect of each error,considered individually,by inserting the dollar amount in the appropriate spaces.Insert "0" if the error does not affect the item.

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Question 22

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As time passes,fixed assets other than land lose their capacity to provide useful services.To account for this decrease in usefulness,the cost of fixed assets is systematically allocated to expense through a process called

A) equipment allocation
B) depreciation
C) accumulation
D) matching

E) All of the above
F) A) and B)

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Question 23

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The financial statements measure precisely the financial condition and results of operations of a business.

The following adjusting journal entry found in the journal is missing an explanation.Select the best explanation for the entry.

Prepare the December 31 adjusting entries for the following transactions.Omit explanations. 1.Fees accrued but unbilled total $6,300. 2.The supplies account balance on December 31 is $4,750.Supplies on hand are $960. 3.Wages accrued but not paid are $2,700. 4.Depreciation of office equipment is $1,650. 5.Rent expired during year,$10,800.

Austin,Inc.made a Prepaid Rent payment of $3,500 on January 1st.The company's monthly rent is $700.The amount of Prepaid Rent that would appear on the January 31 balance sheet after adjustment is:

Complete the missing items in the following chart:

Vertical analysis compares each item in a financial statement with a total amount from the same statement.

The adjusted trial balance verifies that total debits equals total credits before the adjusting entries are prepared.

The balance in the unearned fees account,before adjustment at the end of the year,is $10,250.Journalize the adjusting entry required if the amount of unearned fees at the end of the year is $3,125.

A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day.The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

The systematic allocation of land's cost to expense is called depreciation.

The account type and normal balance of Unearned Revenue is

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

Which of the following is considered to be an accrued expense?

The balance in the office supplies account on June 1 was $7,500,supplies purchased during June were $3,100,and the supplies on hand at June 30 were $2,300.The amount to be used for the appropriate adjusting entry is

The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.

Using accrual accounting,expenses are recorded and reported only

Which one of the following accounts below would likely be included in a deferral adjusting entry?

What effect will this adjustment have on the accounting records?