College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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When making an adjusting entry. Say the amount is $1,500
The accounts used are Wages Expense and Wages Payable. Both of these are liabilites, is that correct? So they should both be credit accounts. However according to my text book. Wages Expense is a Debit Account and Wages Payable is a Credit Account. WHY is that? Please explain in detail. Thanks!

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  • Two questions here, please answer clearly and thoroughly your help is very appreciated!First QuestionAre there 3 adjusting entries a) Accrual Adjustments b) Prepayments/Deferrals c) Special AdjustmentsSecond questionI am confused about the accounts used in adjusting entries. The accounts seem to be contradictory.1. Accrual Adjustment-accounts receivable is debited and Service Revenue is credited. Why is Service Revenue credited? I understand it is a credit account. Why isn't it considered an asset? Revenue is money that is coming into the company correct?2) Prepayments and Deferralsaccounts used in this entry are Cash/Unearned Revenue and Unearned Revenue/Service Revenue.Again the confusion here is that Cash is an asset. Revenue should also be an asset because it is money coming into the company. Please explain how I am wrong .Unearned Revenue/Service RevenueThese are both Revunue accounts. How can they be adjusted at the same time? Why is one a debit account why is one a…
    We have learned about four types of adjustments: (1) prepaid expenses, (2) unearned revenues, (3) accrued expenses, and (4) accrued revenues. Select one specific adjusting entry that falls under one of the four types and post the following: 1. A description of the adjustment and why it is necessary. 2. Provide an example of the transaction; include the debit and credit, with dates and amounts.
    At the end of the current year, $59,500 of fees have been earned but have not been billed to clients.   Required: A. Journalize the adjusting entry to record the accrued fees on December 31. Refer to the Chart of Accounts for exact wording of account titles. B. If the cash basis rather than the accrual basis had been used, would an adjusting entry have been necessary? CHART OF ACCOUNTSGeneral Ledger   ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Equipment 17 Accumulated Depreciation-Equipment   LIABILITIES 21 Accounts Payable 22 Unearned Fees 23 Salaries Payable 24 Taxes Payable   EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends   REVENUE 41 Fees Earned   EXPENSES 51 Advertising Expense 52 Insurance Expense 53 Rent Expense 54 Salary Expense 55 Supplies Expense 56 Utilities Expense 57 Depreciation Expense 59 Miscellaneous Expense
  • LO1 As part of the adjustment of supplies, an expense account is debited and Supplies is credited for the amount of supplies used during the accounting period.
    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.
    Which account would be credited when closing the account for fees earned for the year? A. Accounts Receivable B. Fees Earned Revenue C. Unearned Fee Revenue D. Income Summary
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