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Exam 3: The Adjusting Process

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Question 91

Multiple Choice

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The account type and normal balance of Unearned Revenue is

A) revenue, credit
B) expense, debit
C) liability, credit
D) asset, debit

E) None of the above
F) All of the above

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Question 92

Multiple Choice

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Supplies are recorded as assets when purchased. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies

A) still on hand
B) purchased
C) used
D) required for the next accounting period

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

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Question 93

Essay

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On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.

The matching principle supports matching expenses with the related revenues.

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.

The balance in the supplies account before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

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 company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

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

What effect will this adjustment have on the accounting records?

Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is

Using accrual accounting, expenses are recorded and reported only

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

Match the type of account (a - e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Using accrual accounting, revenues are recorded

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 fixed asset's market value is reflected on the balance sheet.

What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error does it not detect?

Which of the following is an example of accrued revenue?

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.