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Exam 3: The Adjusting Process

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Question 41

True/False

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The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

A) True
B) False

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Question 42

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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

A) debit Salaries Payable,$12,000; credit Cash,$12,000
B) debit Salary Expense,$12,000; credit Dividends,$12,000
C) debit Salary Expense,$12,000; credit Salaries Payable,$12,000
D) debit Dividends,$12,000; credit Cash,$12,000

E) A) and D)
F) B) and C)

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Question 43

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Which of the accounting steps in the accounting process below would be completed last?

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

On December 15,Great Designs Company hired an independent contractor for a project.The contractor completed the project on December 29 and submitted an invoice for $2,425 which was due on January 15.The amount was duly paid on January 15. ​ (a)Prepare the journal entry or entries necessary to record these transactions. (b)Explain why you prepared this / these journal entries.

A company pays an employee $3,000 for a five-day work week,Monday-Friday.The adjusting entry on December 31,which is a Wednesday,is a debit to Wages Expense,$1,800,and a credit to Wages Payable,$1,800.

Depreciation on an office building is $2,800.The adjusting entry on December 31 would be

Which account would normally not require an adjusting entry?

Data for an adjusting entry described as "accrued wages,$2,020" requires a

If the debit portion of an adjusting entry is to an asset account,then the credit portion must be to a liability account.

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

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

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

A one-year insurance policy was purchased on June 1 for $2,400.The adjusting entry on December 31 would be:

The company determines that the interest expense on a note payable for the period ending December 31 is $775.This amount is payable on January 1.Prepare the journal entries required on December 31 and January 1.

The unexpired insurance at the end of the fiscal period represents

Prepaid expenses are eventually expected to become

If there is a balance in the unearned subscriptions account after adjusting entries are made,it represents a(n)

Accumulated depreciation is reported on the income statement.

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.