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Exam 3: The Adjusting Process

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Question 81

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A contra asset account for Land will normally appear on the balance sheet.

A) True
B) False

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Question 82

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Which of the following is considered to be unearned revenue?

A) theater tickets sold last month for yesterday's performance
B) theater tickets sold yesterday on credit for yesterday's performance
C) theater tickets that were not sold for the current performance
D) theater tickets sold for next month's performance

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

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Question 83

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Accumulated depreciation accounts are liability accounts.

The type of account and normal balance of Prepaid Insurance is

At January 31,the end of the first month of the year,the usual adjusting entry transferring expired insurance to an expense account is omitted.Which items will be incorrectly stated,because of the error,on (a)the income statement for January and (b)the balance sheet as of January 31? Also indicate whether the items in error will be overstated or understated.

Prepaid advertising,representing payment for the next quarter,would be reported on the balance sheet as a(n)

The entry to adjust for the cost of supplies used during the accounting period is

For each of the following errors,considered individually,indicate whether the error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance total to be unequal,indicate whether the debit or credit total is higher and by how much.

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 in the office supplies account on January 1 was $7,000,supplies purchased during January were $3,000,and the supplies on hand at January 31 were $2,000.The amount to be used for the appropriate adjusting entry is

A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that day.The last payday of December is Friday,December 27.Assume the next pay period begins on Monday,December 30,and the proper adjusting entry is journalized at the end of the fiscal period (December 31) .The entry for the payment of the payroll on Friday,January 10,includes a

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

By matching revenue earned during the accounting period to related incurred expenses

Which of the following is an example of a prepaid expense?

On January 1,the Newman Company estimated its property tax to be $5,100 for the year. ​

Prior to the adjusting process,accrued revenue has

The following adjusting journal entry does not include an explanation.Select the best explanation for the entry.

For most large businesses,the cash basis of accounting will provide accurate financial statements for user needs.

The financial statements are prepared from the unadjusted trial balance.

The estimated amount of depreciation on equipment for the current year is $5,300.Journalize the adjusting entry to record the depreciation.