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Exam 3: Adjusting Accounts and Preparing Financial Statements

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Question 61

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Identify the differences between accrual accounting and cash basis accounting.

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Accrual accounting records revenues in t...

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Question 62

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Which of the following assets is not depreciated?

A) Store fixtures.
B) Computers.
C) Land.
D) Buildings.
E) All of these are depreciated.

F) D) and E)
G) None of the above

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Question 63

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Black Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows Present the four adjusting journal entries that were recorded by Black Company.

Topflight Company had $1,500 of store supplies at the beginning of the current year. During this year, Topflight purchased $8,250 worth of store supplies. On December 31, $1,125 worth of store supplies remained. Calculate the amount of Topflight Company's store supplies expense for the current year.

A trial balance prepared before any adjustments have been recorded is:

If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:

Explain how accounting adjustments affect financial statements.

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their ________________________ year.

The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

An _______________________ is a listing of all of the accounts in the ledger with their account balances before adjustments are made.

Alex Company rents space to a tenant for $2,200 per month. The tenant currently owes two months rent, November and December. The tenant has agreed to pay the November, December, and January rents in full on January 15 and has agreed not to fall behind again. The adjusting entry needed on December 31 is:

Depreciation measures the decline in market value of an asset.

The adjusted trial balance contains information pertaining to:

On December 31, Connelly Company had performed $5,000 of management services for clients that had not yet been billed. Prepare Connelly's adjusting entry to record these fees earned. Answer will vary

The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is:

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets, is called:

During the current year ended December 31, clients paid fees in advance for accounting services amounting to $25,000. These fees were recorded in an account called Unearned Accounting Fees. If $3,500 of these fees remain unearned on December 31 of this year present the December 31 adjusting entry to bring the accounts up to date.

A salary owed to employees is an example of an accrued expense.

A company's fiscal year must correspond with the calendar year.