Financial Accounting for Undergr. -Text Only (Instructor's)
Financial Accounting for Undergr. -Text Only (Instructor's)
3rd Edition
ISBN: 9781618531629
Author: WALLACE
Publisher: Cambridge Business Publishers
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Chapter 3, Problem 1SSQ
To determine

Identify which of the given entry is an example of an adjusting entry.

Expert Solution & Answer
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Answer to Problem 1SSQ

b. Recording depreciation expense on a truck.

Explanation of Solution

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.

Justification for incorrect option:

a. recording the purchase of supplies on account, c. recording the billing of customers for services rendered, and d. recording the payment of wages to employees are examples of journal entry, as these direct business transaction. Hence, option a, c, and d are incorrect options.

Justification for correct option:

b. Recording depreciation expense on a truck is the example of an adjusting entry, because it is estimation but not a direct expenditure, and allocation of cost of using the truck in revenue generation through its useful life. It is required to be made as per matching principle of accrual accounting.

Hence, the correct answer is b. Recording depreciation expense on a truck.

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Chapter 3 Solutions

Financial Accounting for Undergr. -Text Only (Instructor's)

Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Prob. 8QCh. 3 - Prob. 9QCh. 3 - Prob. 10QCh. 3 - Prob. 11QCh. 3 - Prob. 12QCh. 3 - Prob. 1SECh. 3 - Prob. 2SECh. 3 - Prob. 3SECh. 3 - Prob. 4SECh. 3 - Prob. 5SECh. 3 - Prob. 6SECh. 3 - Prob. 7SECh. 3 - Prob. 8SECh. 3 - Prob. 9SECh. 3 - Prob. 10SECh. 3 - Prob. 11SECh. 3 - Prob. 12SECh. 3 - Prob. 1AECh. 3 - Prob. 2AECh. 3 - Prob. 3AECh. 3 - Prob. 4AECh. 3 - Prob. 5AECh. 3 - Prob. 6AECh. 3 - Prob. 7AECh. 3 - Prob. 8AECh. 3 - Prob. 9AECh. 3 - Prob. 10AECh. 3 - Prob. 11AECh. 3 - Prob. 12AECh. 3 - Prob. 13AECh. 3 - Prob. 14AECh. 3 - Prob. 15AECh. 3 - Prob. 16AECh. 3 - Prob. 1BECh. 3 - Prob. 2BECh. 3 - Prob. 3BECh. 3 - Prob. 4BECh. 3 - Prob. 5BECh. 3 - Prob. 6BECh. 3 - Prob. 7BECh. 3 - Prob. 8BECh. 3 - Prob. 9BECh. 3 - Prob. 10BECh. 3 - Prob. 11BECh. 3 - Prob. 12BECh. 3 - Prob. 13BECh. 3 - Prob. 14BECh. 3 - Prob. 15BECh. 3 - Prob. 16BECh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 6APCh. 3 - Prob. 7APCh. 3 - Prob. 8APCh. 3 - Prob. 9APCh. 3 - Prob. 10APCh. 3 - Prob. 11APCh. 3 - Prob. 12APCh. 3 - Prob. 13APCh. 3 - Prob. 14APCh. 3 - Prob. 15APCh. 3 - Prob. 16APCh. 3 - Prob. 17APCh. 3 - Prob. 18APCh. 3 - Prob. 19APCh. 3 - Prob. 20APCh. 3 - Prob. 1BPCh. 3 - Prob. 2BPCh. 3 - Prob. 3BPCh. 3 - Prob. 4BPCh. 3 - Prob. 5BPCh. 3 - Prob. 6BPCh. 3 - Prob. 7BPCh. 3 - Prob. 8BPCh. 3 - Prob. 9BPCh. 3 - Prob. 10BPCh. 3 - Prob. 11BPCh. 3 - Prob. 12BPCh. 3 - Prob. 13BPCh. 3 - Prob. 14BPCh. 3 - Prob. 15BPCh. 3 - Prob. 16BPCh. 3 - Prob. 17BPCh. 3 - Prob. 18BPCh. 3 - Prob. 19BPCh. 3 - Prob. 20BPCh. 3 - Prob. 1EYKCh. 3 - Prob. 2EYKCh. 3 - Prob. 3EYKCh. 3 - Prob. 4EYKCh. 3 - Prob. 6EYKCh. 3 - Prob. 7EYKCh. 3 - Prob. 8EYKCh. 3 - Prob. 9EYKCh. 3 - Prob. 10EYKCh. 3 - Prob. 11EYK
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