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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883
Chapter 3, Problem 8CDQ
Textbook Problem
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Why are adjustments needed at the end of an accounting period?

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

  • Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period
  • Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period
  • Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period
  • Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period
  • Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period

To Indicate:

The adjustments needed at the end of the accounting period

Explanation of Solution

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year. The trial balance matches even before the adjustments are made.

The adjustments needed at the end of the accounting period are as follows:

  • Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period
  • Accrued Expense: ...

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Chapter 3 Solutions

Survey of Accounting (Accounting I)
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Ch. 3 - Is the Land balance before the accounts have been...Ch. 3 - Is the Supplies balance before the accounts have...Ch. 3 - Why are adjustments needed at the end of an...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of an adjustment is to increase the...Ch. 3 - If the effect of an adjustment is to increase the...Ch. 3 - Does every adjustment have an effect on...Ch. 3 - (a) Explain the purpose of the accounts...Ch. 3 - Describe the nature of the assets that compose the...Ch. 3 - Transactions using accrual accounting Terry Mason...Ch. 3 - Adjustment process Using the data from Exercise...Ch. 3 - Financial statements Using the data from Exercises...Ch. 3 - Reconcile net income and net cash flows from...Ch. 3 - Accrual basis of accounting Margie Van Epps...Ch. 3 - Classify accruals and deferrals Classify the...Ch. 3 - Classify adjustments The following accounts were...Ch. 3 - Adjustment for supplies Answer each of the...Ch. 3 - Adjustment for prepaid insurance The prepaid...Ch. 3 - Adjustment for unearned fees The balance in the...Ch. 3 - Adjustment for unearned revenue For a recent year....Ch. 3 - Effect of omitting adjustment At the end of...Ch. 3 - Adjustment for accrued salaries Laguna Realty Co....Ch. 3 - Determine wages paid The balances of the two...Ch. 3 - Effect of omitting adjustment Accrued salaries of...Ch. 3 - Effect of omitting adjustment Assume that the...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjustment for accrued fees At the end of the...Ch. 3 - Adjustments for unearned and accrued fees The...Ch. 3 - Effect on financial statements of omitting...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Adjustments Clean Air Company is a consulting firm...Ch. 3 - Book value of fixed assets For a recent year....Ch. 3 - Classify assets Identify each of the following as...Ch. 3 - Balance sheet classification At the balance sheet...Ch. 3 - Classified balance sheet Pounds-Away Services Co....Ch. 3 - Classified balance sheet La-Z-Boy Inc. (LZB) is...Ch. 3 - Balance sheet List any errors you can find in the...Ch. 3 - Accrual basis accounting San Mateo Health Care...Ch. 3 - Adjustment process Adjustment data for San Mateo...Ch. 3 - Financial statements Data for San Mateo Health...Ch. 3 - Statement of cash flows Data for San Mateo Health...Ch. 3 - Statement of cash flows Data for San Mateo Health...Ch. 3 - Adjustments and errors At the end of May, the...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Metric analysis of transactions Using the...Ch. 3 - Metric analysis of transactions Using the...Ch. 3 - Metric analysis of transactions Using the...Ch. 3 - Metric analysis of transactions Using the...Ch. 3 - Quick ratio GameStop Corporation (GME) has over...Ch. 3 - Quick ratio GameStop Corporation (GME) has over...Ch. 3 - Quick ratio GameStop Corporation (GME) has over...Ch. 3 - Quick ratio GameStop Corporation (GME) has over...Ch. 3 - Quick ratio The Gap Inc. (GPS)operates specialty...Ch. 3 - Quick ratio The Gap Inc. (GPS)operates specialty...Ch. 3 - Quick ratio The Gap Inc. (GPs)operates specialty...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Quick ratios Compare The Gap Inc. (MBA 3-6) and...Ch. 3 - Quick ratios Wal-Mart Stores Inc. (WMT) operates...Ch. 3 - Quick ratios Wal-Mart Stores Inc. (WMT) operates...Ch. 3 - Quick ratios Wal-Mart Stores Inc. (WMT) operates...Ch. 3 - Accrued revenue The following is an excerpt from a...Ch. 3 - Adjustments for financial statements Several years...Ch. 3 - Business emphasis Assume that you and two friends...Ch. 3 - Business emphasis Assume that you and two friends...Ch. 3 - Accrual versus cash net income. Cigna Corp. (CI)...Ch. 3 - Accrual versus cash net income. Cigna Corp. (CI)...Ch. 3 - Accrual versus cash net income. Cigna Corp. (CI)...Ch. 3 - Analysis of income and cash flows The following...Ch. 3 - Analysis of income and cash flows The following...

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