Exam 5: Adjusting Entries and the Work Sheet

The Income Statement and Balance Sheet columns of a work sheet are produced below. Indicate with an "X" the specific Income Statement or Balance Sheet column(s) in which each amount transferred from the Adjusted Trial Balance columns should be placed, if at all.

Depreciation expense is recorded for a specific period of time.

The original cost of an asset less the trade-in or salvage value of an asset equals the depreciable cost of that asset.

Supplies are partly useD.​

If the book value of an asset is $12,500 and the accumulated depreciation is $3,500, the original cost of the asset is

The difference between the asset account and the contra-asset account is known as the ____________________.

Match the terms with the definitions. -A form used to pull together all of the information needed to enter adjusting entries and prepare the financial statements.

A contra-asset has a credit balance.

Under the modified cash basis of accounting, adjustments are made only for prepaid items and depreciation on plant and equipment.

If the debits in the Income Statement columns of the work sheet total $50,000 and the credits total $60,000 before net income or net loss has been determined, the business has a net income of $10,000.

The original cost of an asset added to its salvage value represents the depreciable cost of an asset.

A 12-month fiscal year can end on any month of the calendar year.

A method of accounting under which revenues are recorded when cash is received and expenses are recorded when cash is paid is known as ____________________.

It is not necessary to post adjusting entries.

Depreciation matches the cost of an asset against the revenues it will produce.

The fifth pair of columns on a 10-column work sheet prepared at the end of the period would be the

To record the purchase of assets on account under the modified cash basis of accounting method,

The balance sheet reports

The adjusting entry for the depreciation of office equipment for the period includes

The balance sheet reports assets, liabilities, and owner's equity for a specific period of time.