Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment. The adjustment entry for accrued salaries on December 31.

Question

Want to see the full answer?

Answer 1

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

REQUIRED Record the adjustment journal entry in respect of rent income in the books of NT Stores as at 28 February 2022. INFORMATION The Rent Income account of NT Stores reflected a total of R276 000 on 28 February 2022, the end of the accounting period. This was in respect of rent for an office occupied by a tenant for the entire financial year. The monthly rental was increased by 10% with effect from 01 September 2021. The rent for February 2022 was due to be received on 01 March 2022.

On December 1, 2019, an advance rent payment of $25,800, representing a three-month prepayment for the months of December, January, and February, was received in cash from the company’s tenant. Required: Use the horizontal model (or write the journal entries) to record the effects of the following items: a. The three months of rent collected in advance on December 1, 2019. b. The adjustment that will be made at the end of each month to show the amount of rent “earned” during the month.

During the last week of 2020, Grandma’s House Inc. received a $96,000 prepayment for 2021 rent of a building from one of its tenants, Red-Riding-Hood. Grandma’s House recorded the receipt as rent revenue. The error was discovered midway through 2021. What journal entry should Grandma’s House record in 2021 to correct the error? Group of answer choices dr. Rent Expense $48,000; cr. Revenue $48,000. dr. Deferred Revenue $96,000; cr. Revenue $96,000. dr. Retained earnings $96,000; cr. Revenue $96,000. None of the options listed. dr. Retained earnings $96,000; cr. Deferred revenue $48,000; cr. Revenue $48,000.

Answer 2

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Answer 6

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

Answer 7

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

Answer 8

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Answer 9

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 13

Ch. 3 - Which of the following is true of accrual basis...Ch. 3 - Get Fit Now gains a client who prepays 540 for a...Ch. 3 - The revenue recognition principle requires a. time...Ch. 3 - Adjusting the accounts is the process of a....Ch. 3 - Which of the following is an example of a deferral...Ch. 3 - Assume that the weekly payroll of In the Woods...Ch. 3 - The adjusted trial balance shows a. amounts that...Ch. 3 - A D Window Cleaning performed 450 of services but...Ch. 3 - A worksheet a. is a journal used to record...Ch. 3 - On February 1, Clovis Wilson Law Firm contracted...

Want to see the full answer?

Chapter 3 Solutions