Exam 3: The Adjusting Process

Under the accrual basis, some accounts in the ledger require updating at the end of the period. Discuss the three main reasons for this updating and give an example of each.

Match the type of account a-e) with the business transactions that follow. -Received payment covering a 6-month magazine subscription.

Identify the effect a-h) that omitting each of the following items would have on the balance sheet. -Interest earned on a note receivable was not recorded.

Match the type of account a-e) with the business transactions that follow. -Paid for a 6-month magazine subscription.

Which of the following is not a characteristic of the accrual basis of accounting?

Adjusting entries affect only expense and asset accounts.

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following is true?

Smokey Company purchases a one-year insurance policy on July 1 for $3,600. The adjusting entry on December 31 is

The type of account and normal balance of Unearned Consulting Fees is

Salaries of $6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is required if the month ends on Thursday.

The account type and normal balance of Unearned Revenue is

Journalize the six entries to adjust the accounts at December 31. Hint: One of the accounts was affected by two different adjusting entries).

Identify the effect a-h) that omitting each of the following items would have on the balance sheet. -Services provided to customers on the last day of the month were not billed.

Which of the following is considered to be unearned revenue?

Prior to the adjusting process, accrued expenses have

A fixed asset's market value is reflected on the balance sheet.

The adjusting entry to record the depreciation of a building for the fiscal period is

Which of the following is not true regarding depreciation?

Match the type of account a-e) with the business transactions that follow. -Services provided that have not been recorded.

The accounting concept upon which deferrals and accruals are based is