Exam 3: Adjusting Accounts and Preparing Financial Statements

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Accumulated depreciation is shown on the balance sheet as a subtraction from the cost of its related asset.

On December 31,2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15.The adjusting entry needed on December 31 to accrue this expense is:

A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday.If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday,the month-end adjusting entry to record the salaries earned but unpaid is:

Glisten Co.leases an office to a tenant at the rate of $3,000 per month.The tenant contacted Glisten and arranged to pay the rent for December on January 8 of the following year.Glisten agrees to this arrangement. a. )Prepare the journal entry that Glisten must make at year ended December 31 to record the accrued rent revenue. b. )Prepare the journal entry to record the receipt of the rent on January 8 of the following year.

Adjusting entries made at the end of an accounting period accomplish all of the following except:

Profit margin is defined as:

________________ refer to costs incurred in a period that are both unpaid and unrecorded.___________ refer to revenues earned in a period that are both unrecorded and not yet received in cash (or other assets).

Two accounting principles central to accrual accounting basis that are relied on in the adjusting process are:

On April 1,Griffith Publishing Company received $1,548 from Santa Fe,Inc.for 36-month subscriptions to several different magazines.The subscriptions started immediately.What is the amount of revenue that should be recorded by Griffith Publishing Company for the first year of the subscription assuming the company uses a calendar reporting period?

The total amount of depreciation recorded against an asset over the entire time the asset has been owned:

Record the December 31 adjusting entries for the following transactions and events in general journal form.Assume that December 31 is the end of the annual accounting period. a.The Prepaid Insurance account shows a debit balance of $2,340,representing the cost of a two-year fire insurance policy that was purchased on October 1 of the current year and has not been adjusted to-date. b.The Store Supplies account has a debit balance of $400;a year-end inventory count reveals $80 of supplies still on hand. c.On November 1 of the current year,Rent Earned was credited for $1,500.This amount represented the rent earned for a three-month period beginning November 1. d.Estimated depreciation on store equipment is $600. e.Accrued salaries amount to $1,400.

On December 1,Milton Company borrowed $300,000,at 8% annual interest,from the Tennessee National Bank.Interest is paid when the loan matures one year from the issue date.What is the adjusting entry for accruing interest that Milton would need to make on December 31,the calendar year-end?

Juno Company had $500 of office supplies available at the beginning of the current year.During the year Juno Company purchased $2,750 worth of office supplies.On December 31 of this year $375 worth of office supplies remained. a.Calculate the amount of Juno Company's office supplies expense for the current year.(Show your calculations. ) b.Prepare the journal entry to adjust the supplies account.

On December 31,2015 Winters Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15.The adjusting entry needed on December 31 to accrue this cost is:

In preparing statements from the adjusted trial balance,the balance sheet must be prepared first.

Accrual accounting and the adjusting process rely on two principles: the ___________________ principle and the ________________________ principle.

An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n):

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is: