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Exam 3: The Adjusting Process

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Question 31

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On December 31,the balance in the Office Supplies account is $1,385.A count shows $435 worth of supplies on hand.Prepare the adjusting entry for supplies.

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$1,385 - $...

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Question 32

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A one-year insurance policy was purchased on June 1,2011 for $1,500.The adjusting entry on December 31,2011 would be

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$1,500/12 ...

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Question 33

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

Prepaid expenses are eventually expected to

The unearned rent account has a balance of $72,000.If $18,000 of the $72,000 is unearned at the end of the accounting period,the amount of the adjusting entry is

What is the purpose of the adjusted trial balance?

Even though GAAP requires the accrual basis of accounting,some businesses prefer using the cash basis of accounting.

On January 31,the end of the first month of the year,the usual adjusting entry transferring expired insurance to an expense account was 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.

The adjusting entry for rent earned that was previously recorded in the unearned rent account is

For the year ending June 30,Island Clinical Services mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2)unearned revenue of $4,200 that was earned,and (3)insurance of $5,000 that expired.What is the combined effect of these errors on (a)revenues, (b)expenses,and (c)net income for the year ending June 30?

The matching concept requires expenses be recorded in the same period that the related revenue is recorded.

Listed below are accounts to use for transactions (a)through (j),each identified by a number.Following this list are the transactions.You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s)in the appropriate box.

Which one of the accounts below would likely be included in an accrual adjusting entry?

Explain the difference between accrual-basis accounting and cash-basis accounting.

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded.

Depreciation on equipment for the year is $6,300. (a)Record the journal entry if the company adjusts its account once a year. (b)Record the journal entry if the company adjusts its account on a monthly basis.

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

Data for an adjusting entry described as "accrued wages,$2,020" would result in

An adjusting entry to accrue an incurred expense will affect total liabilities.

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