FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: The Adjusting Process

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

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

Correct Answer

verified

$2,400/12 ...

View Answer

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

What effect will this adjusting journal entry have on the accounting records?

A) increase income
B) decrease net income
C) decrease expenses
D) increase assets

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

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry.

Which of the following is not true regarding depreciation?

A company receives $6,500 for two season tickets sold on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is a debit to Cash, $2,500, and a credit to Ticket Revenue, $2,500.

The following adjusting journal entry found in the journal is missing an explanation. Select the best explanation for the entry.

Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.​ The adjustment for accrued fees of $1,170 was journalized as a debit to Accounts Receivable for $1,170 and a credit to Fees Earned for $1,107.

Which of the following is considered to be an accrued expense?

An example of deferred revenue is Unearned Rent.

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

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted, the assets at the end of the period will be understated.

The revenue recognition principle

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). Journalize the entry for the payment of the payroll on Friday, January 10.

At the end of the current year, $3,700 fees have been earned but have not been billed to clients. Journalize the adjusting entry to record the accrued fees.

What is the purpose of the adjusted trial balance?

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

A company receives $360 for a 12-month trade magazine subscription on August 1. The adjusting entry on December 31 is a debit to Unearned Subscription Revenue, $150, and a credit to Subscription Revenue, $150.

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated b.Assets and stockholders' equity understated c.Assets overstated and stockholders' equity understated d.Assets understated and stockholders' equity overstated e.Liabilities and stockholders' equity overstated f.Liabilities and stockholders' equity understated g.Liabilities overstated and stockholders' equity understated h.Liabilities understated and stockholders' equity overstated -Depreciation on equipment was not recorded.

Journalize the six entries to adjust the accounts at December 31. (Hint: One of the accounts was affected by two different adjusting entries).​

If the equipment account has a balance of $80,400 and its accumulated depreciation account has a balance of $22,500, the book value of the equipment is