Instruction: You are given below incomplete adjusting entries. Fill up the missing debit or credit and give a brief explanation. Dec. 31 Depreciation Expenses 1,000 1,000 Salaries Expense 2,000 2,000 Accrued salaries expense 400 Interest Income 400 To set up accrued interest income 2,000 Rent Income 2,000 To record rent income Rent Expense 4,000 4,000 Accrued rent expense Light and Water Expense 700 700 Accrued expense 1,000 Accumulated Depreciation-Equipment 1,000 Interest Expenses 200 200 Accrued Interest Expense 1,000 Prepaid Insurance 1,000 To set up the expense portion 800 Allowance for Bad Debts 800

Instruction: You are given below incomplete adjusting entries. Fill up the missing debit or credit and give a brief explanation. Dec. 31 Depreciation Expenses 1,000 1,000 Salaries Expense 2,000 2,000 Accrued salaries expense 400 Interest Income 400 To set up accrued interest income 2,000 Rent Income 2,000 To record rent income Rent Expense 4,000 4,000 Accrued rent expense Light and Water Expense 700 700 Accrued expense 1,000 Accumulated Depreciation-Equipment 1,000 Interest Expenses 200 200 Accrued Interest Expense 1,000 Prepaid Insurance 1,000 To set up the expense portion 800 Allowance for Bad Debts 800

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 13PB: Prepare adjusting journal entries, as needed, considering the account balances excerpted from the...

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Prepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data. A. depreciation on fixed assets, $ 8,500 B. unexpired prepaid rent, $12,500 C. remaining balance of unearned revenue, $555
Identify which type of adjustment is indicated by these transactions. Choose accrued revenue, accrued expense, deferred revenue, or deferred expense. A. fees earned and billed, but not collected B. recorded depreciation expense C. fees collected in advance of services D. salaries owed but not yet paid E. property rentals costs, prepaid for future months F. inventory purchased for cash
Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Recognition Historical cost Current value Cash basis Accrual basis Revenues Revenue recognition principle Matching principle Expenses Adjusting entries Straight-line method Contra account Deferral Deferred expense Deferred revenue Accrual Accrued liability Accrued asset Accounting cycle Work sheet Real accounts Nominal accounts Closing entries Interim statements A device used at the end of the period to gather the information needed to prepare financial statements without actually recording and posting adjusting entries. Inflows of assets or settlements of liabilities from delivering or producing goods, rendering services, or conducting other activities. Journal entries made at the end of a period by a company using the accrual basis of accounting. Journal entries made at the end of the period to return the balance in all nominal accounts to zero and transfer the net income or loss and the dividends to Retained Earnings. A liability resulting from the receipt of cash before the recognition of revenue. The name given to balance sheet accounts because they are permanent and are not closed at the end of the period. An asset resulting from the recognition of a revenue before the receipt of cash. The amount of cash or its equivalent that could be received by selling an asset currently. The assignment of an equal amount of depreciation to each period. Cash has been paid or received but expense or revenue has not yet been recognized. A system of accounting in which revenues are recognized when a performance obligation is satisfied and expenses are recognized when incurred. Cash has not yet been paid or received but expense has been incurred or revenue recognized. Financial statements prepared monthly, quarterly, or at other intervals less than a year in duration. Revenues are recognized in the income statement when a performance obligation is satisfied. The process of recording an item in the financial statements as an asset, a liability, a revenue, an expense, or the like. An asset resulting from the payment of cash before the incurrence of expense. The name given to revenue, expense, and dividend accounts because they are temporary and are closed at the end of the period. A system of accounting in which revenues are recognized when cash is received and expenses are recognized when cash is paid. A liability resulting from the recognition of an expense before the payment of cash. The association of revenue of a period with all of the costs necessary to generate that revenue. An account with a balance that is opposite that of a related account. The amount paid for an asset and used as a basis for recognizing it on the balance sheet and carrying it on later balance sheets. Outflows of assets or incurrences of liabilities resulting from delivering goods, rendering services, or carrying out other activities. A series of steps performed each period and culminating with the preparation of a set of financial statements.
The following accounts were used to make year-end adjustments. Identify the related account that is associated with this account (the other account in the adjusting entry). A. Salaries Payable B. Depreciation Expense C. Supplies D. Unearned Rent
Prepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data. A. depreciation on buildings and equipment, $17,500 B. advertising still prepaid at year end, $2,200 C. interest due on notes payable, $4,300 D. unearned rental revenue, $6,900 E. interest receivable on notes receivable, $1,200
Prepare an adjusted trial balance from the following account information, and also considering the adjustment data provided (assume accounts have normal balances). Equipment was recently purchased, so there is neither depreciation expense nor accumulated depreciation. Adjustments needed: Remaining unpaid Salaries due to employees at the end of the period, $0 Accrued Interest Payable at the end of the period, $7,700
Prepare an adjusted trial balance from the following account information, considering the adjustment data provided (assume accounts have normal balances). Adjustments needed: Physical count of supplies inventory remaining at end of period, $2,150 Taxes payable at end of period, $3,850
Identify which type of adjustment is indicated by these transactions. Choose accrued revenue, accrued expense, deferred revenue, deferred expense, or estimate. A. utilities owed but not paid B. cash received in advance for future services C. supplies inventory purchased D. fees earned but not yet collected E. depreciation expense recorded F. insurance paid for future periods
POSTING ADJUSTING ENTRIES Two adjusting entries are shown in the following general journal. Post these adjusting entries to the four general ledger accounts. The following account numbers were taken from the chart of accounts: 145, Prepaid Insurance; 183.1, Accumulated DepreciationCleaning Equipment; 541, Depreciation ExpenseCleaning Equipment; and 535, Insurance Expense. If you are not using the working papers that accompany this text, enter the following balances before posting the entries: Prepaid Insurance, 960 Debit; Accumulated DepreciationCleaning Equipment, 870 Credit.
What two accounts are affected by each of these adjustments? A. recorded accrued interest on note payable B. adjusted unearned rent to correct C. recorded depreciation for the year D. adjusted salaries payable to correct E. sold merchandise to customers on account
The unadjusted trial balance of PS Music as of July 31, 2018, along with the adjustment data for the two months ended July 31, 2018, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared: PS Music Adjusted Trial Balance July 31, 2018 Account No. Debit Balances Credit Balances Cash................................................. 11 9,945 Accounts Receivable................................... 12 4,150 Supplies.............................................. 14 275 Prepaid Insurance..................................... 15 2,475 Office Equipment..................................... 17 7,500 Accumulated DepreciationOffice Equipment.......... 18 50 Accounts Payable..................................... 21 8,350 Wages Payable........................................ 22 140 Unearned Revenue.................................... 23 3,600 Common Stock....................................... 31 9,000 Dividends............................................ 33 1,750 Fees Earned........................................... 41 21,200 Music Expense........................................ 54 3,610 Wages Expense....................................... 50 2,940 Office Rent Expense................................... 51 2,550 Advertising Expense................................... 55 1,500 Equipment Rent Expense.............................. 52 1,375 Utilities Expense...................................... 53 1,215 Supplies Expense...................................... 56 925 Insurance Expense.................................... 57 225 Depreciation Expense................................. 58 50 Miscellaneous Expense................................ 59 1,855 42,340 42,340 Instructions 1. (Optional) Using the data from Chapter 3, prepare an end-of-period spreadsheet. 2. Prepare an income statement, a retained earnings statement, and a balance sheet. 3. Journalize and post the closing entries. The retained earnings account is #33 and the income summary account is #34 in the ledger of PS Music. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 4. Prepare a post-dosing trial balance.
Cornerstone Exercise 3-17 Accrued Revenue Adjusting Entries Powers Rental Service had the following items that require adjustment at year end. Earned $9,880 of revenue from the rental of equipment for which the customer had not yet paid. Interest of S650 on a note receivable has been earned but not yet received. Required: Prepare the adjusting entries needed at December 31. What is the effect on the financial statements if these adjusting entries are not made?