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Exam 3: Adjustments: Accruals and Deferrals

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Question 61

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Prepare adjusting entries for the following transactions:

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verified

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Question 62

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Vertical analysis is useful for analyzing financial statement changes over time.

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Question 63

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An adjusting entry would adjust an expense account so the expense is reported when incurred.

Which of the following is considered to be unearned revenue?

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.

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

Buster Industries pays weekly salaries of $30,000 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 balance in the supplies account before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

A fixed asset's market value is reflected on the balance sheet.

The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

An example of deferred revenue is Unearned Rent.

Accrued revenues would appear on the balance sheet as

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.

The balance of the building account is $4,500,000, and the balance in the accumulated depreciation-building account is $2,400,000. What is the book value of the equipment?

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

Prior to the adjusting process, accrued revenue has

Depreciation Expense is reported on the balance sheet as an addition to the related asset.

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

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Gizmo Inc. purchased a one-year insurance policy on October 1 for $1,800. The adjusting entry on December 31 would be ​