Exam 3: Adjusting the Accounts

Cara, Inc. purchased supplies costing ₤3,500 on January 1, 2014 and recorded the transaction by increasing assets. At the end of the year ₤1,300 of the supplies are still on hand. If Cara, Inc. does not make the appropriate adjusting entry, what is the impact on its statement of financial position at December 31, 2014?

The expense recognition principle requires that expenses be matched with revenues.

Henry-K Company purchased a computer system for $3,600 on January 1, 2014. The company expects to use the computer system for 3 years. It has no residual value. Monthly depreciation expense on the asset is

Southwestern City College sold season tickets for the 2014 football season for $300,000. A total of 8 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Ticket Revenue at October 31 is

Characteristics associated with faithfully representative accounting information are

Southwestern City College sold season tickets for the 2014 football season for $300,000. A total of 8 games will be played during September, October and November. In September, three games were played. The adjusting journal entry at September 30

Adjusting entries can be classified as

Joyce's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $50,000 with annual interest of 6%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

A contra asset account is subtracted from a related account in the statement of financial position.

Similarities between International Financial Reporting Standards (IFRS) and U.S. GAAP include all of the following except

Alternative adjusting entries do not apply to

Daily Printings sold annual subscriptions to their magazine for $30,000 in December, 2013. The magazine is published monthly. The new subscribers received their first magazine in January, 2014. 1. What adjusting entry should be made in January if the subscriptions were originally recorded as a liability? 2. What amount will be reported on the January 2014 statement of financial position for Unearned Subscription Revenue?

Which of the following is not an accounting assumption?

Employees at Julian Corporation are paid $15,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Wednesday, December 31. How much salary expense should be recorded two days later on January 2?

An item is considered material if

Which of the statements below is not true?

The trial balances before and after adjustments for Old Julian Company at the end of its fiscal year are presented below. Instructions Prepare the adjusting entries that were made.

A company shows a balance in Salaries and Wages Payable of ¥48,000 at the end of the month. The next payroll amounting to ¥54,000 is to be paid in the following month. What will be the journal entry to record the payment of salaries?

The balances of the Depreciation Expense and the Accumulated Depreciation accounts should always be the same.

Can financial statements be prepared directly from the adjusted trial balance?