MODULE 3 ADJUSTMENTS I have posted THREE questions and would appreciate it if you would address all three of them. Providing the correct answer and explanation of how you came to that correct answer. Question 1: Company performed $1000 of services that the client paid for in advance. 1) DR Unearned Service Fee 1000 CR Service Fee Revenue 10002) DR Unearned Revenue 1000 CR Cash 10003) DR Cash 1000 CR Service Fee Revenue 10004) DR Service Fee Revenue 1000 CR Unearned Service Fee 1000 Question 2: To record depreciation on the company truck for one year. The truck's cost is 12,000 with 1,000 salvage value and an estimated life of 4 years.1) DR Depreciation Expense 2800 CR Truck 28002) DR Depreciation Expense 2800 CR Accumulated Depreciation 28003) DR Depreciation Expense 3050 CR Accumulated Depreciation 30504) DR Accumulated Depreciation 3050 CR Truck 30505) No entry is correct Question 3: Money borrowed from the bank carries an interest rate of 6% per year. Interest was last paid a month ago and is due again in another 5 months. The amount borrowed is $20000.1) DR Interest Expense 100 CR Interest Payable 1002) DR Interest Expense 500 CR Interest Payable 5003) DR Interest Expense 100 CR Cash 1004) DR Interest Expense 600 CR Cash 600
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
MODULE 3 ADJUSTMENTS
I have posted THREE questions and would appreciate it if you would address all three of them. Providing the correct answer and explanation of how you came to that correct answer.
Question 1: Company performed $1000 of services that the client paid for in advance.
1) DR Unearned Service Fee 1000
CR Service Fee Revenue 1000
2) DR Unearned Revenue 1000
CR Cash 1000
3) DR Cash 1000
CR Service Fee Revenue 1000
4) DR Service Fee Revenue 1000
CR Unearned Service Fee 1000
Question 2: To record
1) DR Depreciation Expense 2800
CR Truck 2800
2) DR Depreciation Expense 2800
CR
3) DR Depreciation Expense 3050
CR Accumulated Depreciation 3050
4) DR Accumulated Depreciation 3050
CR Truck 3050
5) No entry is correct
Question 3: Money borrowed from the bank carries an interest rate of 6% per year. Interest was last paid a month ago and is due again in another 5 months. The amount borrowed is $20000.
1) DR Interest Expense 100
CR Interest Payable 100
2) DR Interest Expense 500
CR Interest Payable 500
3) DR Interest Expense 100
CR Cash 100
4) DR Interest Expense 600
CR Cash 600
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