MODULE 3 HOMEWORK - ADJUSTING ENTRIES Below are 3 questions and underneath each question is the answer. Please select the correct answer and explain to me why/how that is the correct answer so I know how to solve these on my own. Please read my question thoroughly and answer accurately so I do not have to reask the question. Thank you. Question Two months have passed since insurance for the year was paid. The amount of the check was $1,200. The entry at time of payment debited the Prepaid Insurance account.Question options: 1) No Entry required for this transaction2) DR Insurance Expense 200 CR Insurance 2003) DR Insurance Expense 1200 CR Insurance 12004) DR Insurance Expense 1200 CR Cash 1200 Question Advertising in the local paper was paid this month in the amount of $500. The amount was debited to Prepaid Advertising, and the advertisement is to run next month.Question options:1) No entry required for this transaction2)DR Advertising Expense 500 CR Cash 5003) DR Advertising Expense 500 CR Prepaid Advertising 5004) DR Advertising Expense 500 CR Advertising Revenue 500 Question Joe Moreland paid us $500 in advance for work to be done on his residence. The entry to record the collection of this cash included a credit to Labor Revenue. The work is halfway complete at the end of this month.Question options:1) No entry required for this transaction2) DR Wages Expense 250 CR Cash 2503) DR Labor Revenue 500 CR Unearned Revenue 5004) DR Labor Revenue 250 CR Unearned Revenue 250
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 HOMEWORK -
Below are 3 questions and underneath each question is the answer. Please select the correct answer and explain to me why/how that is the correct answer so I know how to solve these on my own. Please read my question thoroughly and answer accurately so I do not have to reask the question. Thank you.
Question
Two months have passed since insurance for the year was paid. The amount of the check was $1,200. The entry at time of payment debited the Prepaid Insurance account.
Question options:
1) No Entry required for this transaction
2) DR Insurance Expense 200
CR Insurance 200
3) DR Insurance Expense 1200
CR Insurance 1200
4) DR Insurance Expense 1200
CR Cash 1200
Question
Advertising in the local paper was paid this month in the amount of $500. The amount was debited to Prepaid Advertising, and the advertisement is to run next month.
Question options:
1) No entry required for this transaction
2)DR Advertising Expense 500
CR Cash 500
3) DR Advertising Expense 500
CR Prepaid Advertising 500
4) DR Advertising Expense 500
CR Advertising Revenue 500
Question
Joe Moreland paid us $500 in advance for work to be done on his residence. The entry to record the collection of this cash included a credit to Labor Revenue. The work is halfway complete at the end of this month.
Question options:
1) No entry required for this transaction
2) DR Wages Expense 250
CR Cash 250
3) DR Labor Revenue 500
CR Unearned Revenue 500
4) DR Labor Revenue 250
CR Unearned Revenue 250
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
