Exam 4: Review of the Accounting Cycle

On March 31, Paris Enterprises received $47,000 in payment for annual advertising contracts and recorded it as advertising revenue. If the revenue is earned equally each month, the adjusting entry on June 30 will include a ________. (Do not round intermediary calculations. Only round your final answer to the nearest dollar.)

Once the adjusting entries have been prepared (journalized and posted), which of the following steps of the accounting cycle are carried out in proper sequence?

New York Enterprises provides advertising services to travel agencies. The company bills annually and receives payments in advance. All advertising is earned equally each month. In January, the company received $120,000; in February, it received $144,000. The company recorded Advertising Revenue of $264,000. The fiscal year ends on February 28. Required: 1. How much revenue should be recognized from these contracts on February 28? 2. What adjusting entry will be required on February 28?

Expenses and losses will decrease liabilities.

The general journal presents transactions ________.

To be recorded in the general journal, a transaction must be an economic event.

The first step in the accounting cycle is recording transactions in the general journal.

Gains and losses result from peripheral transactions of a company.

List the steps in preparing a worksheet.

On January 1, Mountbatten Corporation paid $14,000 for a year's advance rent on a building and recorded it as Rent Expense. The rental period begins on January 1. When financial statements are prepared on March 31, the adjusting entry should include ________. (Do not round intermediary calculations. Only round your final answer to the nearest dollar.)

The first financial statement to be prepared is the statement of net income.

To ensure that all economic events are properly reflected in the financial statements ________.

Johnson Company neglected to accrue interest expense of $2,000 on its year-end trial balance. This results in an ________.

When a prepaid expense initially recorded as an asset is incurred, the adjusting entry includes ________.

If an unearned revenue is initially recorded as a revenue, the end-of-period adjusting entry records the earned portion.

All of the following accounts are permanent accounts except ________.

Jenner Corporation paid its annual dividend. This transaction represents a(n) ________.

Thunderball Sports Club collected $328,000 unearned revenue from its clients during the year. If unearned revenue at the beginning of the year was $69,000 and revenue earned during the year was $380,000, what was unearned revenue at the end of the year?

Unearned revenues may be initially recorded as assets or expenses.

Wesley Foundation had $27,000 in supplies inventory at the beginning of the year. The company purchased $50,000 in supplies throughout the year and used $60,000. What is the ending balance in the supplies inventory?