Exam 3: Adjusting the Accounts

Stone Roses Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $1,500 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January? a. Salaries and Wages Expense $\quad$$\quad$ 1,500 $\quad$ Salaries and Wages Payable $\quad$$\quad$ 1,500 b. Salaries and Wages Expense $\quad$$\quad$ 7,500 $\quad$ Salaries and Wages Payable $\quad$$\quad$ 7,500 c. Salaries and Wages Expense $\quad$$\quad$ 4,500 $\quad$ Salaries and Wages Payable $\quad$$\quad$ 4,500 d. No adjusting entry is required.

On January 1, 2014, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2015, the balance in Accumulated Depreciation is

The time period assumption states

Characteristics associated with faithfully representative accounting information are

Which of the following is not a common time period chosen by businesses as their accounting period?

Which of the following is not an accounting assumption?

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

Which of the following time periods would not be referred to as an interim period?

The revenue recognition principle dictates that revenue be recognized in the accounting period in which cash is received.

153. Sebadoah is a barber who does his own accounting for his shop. When he buys supplies he routinely debits Supplies Expense. Sebadoah purchased $1,500 of supplies in January and his inventory at the end of January shows $300 of supplies remaining. What adjusting entry should Sebadoah make on January 31? a. Supplies Expense $\quad$$\quad$ 300 $\quad$ Supplies $\quad$$\quad$ 300 b. Supplies Expense $\quad$$\quad$ 1,500 $\quad$ Cash $\quad$$\quad$ 1,500 c. Supplies.. $\quad$$\quad$ 300 $\quad$ Supplies Expense $\quad$$\quad$ 300 d. Supplies Expense. $\quad$$\quad$ 1,200 $\quad$ Supplies $\quad$$\quad$ 1,200

Unearned revenue is classified as

An adjusting entry requiring a credit to Insurance Expense indicates that the initial transaction was charged to an asset account.

A small company may be able to justify using a cash basis of accounting if they have

Crue Company had the following transactions during 2015: -Sales of $4,800 on account -Collected $2,000 for services to be performed in 2016 -Paid $1,625 cash in salaries -Purchased airline tickets for $250 in December for a trip to take place in 2016 What is Crue's 2015 net income using accrual accounting?

Characteristics associated with relevant accounting information are

If an adjustment is needed for unearned revenues, the

The time period assumption is used under

From an accounting standpoint, the acquisition of productive facilities can be thought of as a long-term

For accounting purposes, business transactions should be kept separate from the personal transactions of the owners of the business.

Which of the following reflects the balances of prepayment accounts prior to adjustment?