Exam 3: The Adjusting Process

An adjusting entry that credits Salaries Payable is an example of a(n) ________.

The matching principle states that ________.

On April 1, Balsa Company purchased office supplies for $1,500. At the end of April, they took a count of the remaining supplies and found that there was $500 of supplies left. Provide the adjusting entry needed at the end of April. (Ignore explanation.) Assume the office supplies were initially recorded as an asset. Assume there were no office supplies on hand prior to the purchase on April 1.

An adjusting entry that debits Accounts Receivable is an example of a(n) ________.

Pluto Promotions sells tickets in advance for its weekly productions and records the proceeds as Unearned Revenue. At the end of each month, the company makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $2,000. During March, it sold 300 tickets at $30 each, and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?

A worksheet is an external document that forms a part of the financial statements.

Get in Shape, a healthy living magazine, collected $528,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account as of December 31?

Avalon Event Planning Services records deferred expenses and deferred revenues using the alternative treatments. It makes adjusting entries as needed to bring its books to the full accrual basis once a year at the end of the year. On October 1, it paid $3,700 for insurance for a one-year period. At the end of the year, it will make an adjusting entry that debits Insurance Expense for $1,850.

Accrued revenue is revenue that ________.

Deborah Consultants had the following accounts and account balances after adjusting entries. Assume all accounts have normal balances. Calculate the amount of service revenue and prepare the adjusted trial balance for Deborah Consultants as of December 31, 2017.

On December 31, 2016, the balance in Pinnacle Exploration Company's Unearned Revenue account was a credit of $6,000. In January, 2017, the company received an advance payment of $14,000 from a new customer for services to be performed. By January 31, adjustments were made to recognize $4,000 of the revenue that had been earned during January. What was the balance in Unearned Revenue on January 31, 2017?

Generally Accepted Accounting Principles (GAAP) require the use of accrual basis of accounting.

On March 1, 2016, LeBlanc Company paid $60,000 for office rent covering the three-month period ending May 31, 2016. Journalize the adjusting entry on March 31 by using the alternative treatment of deferred expenses.

Jupiter Company signed a one-year $47,000 note payable at 8% interest on May 1, 2016. If Jupiter Company only adjusts its accounts once a year at year-end, how much interest expense was accrued on December 31, 2016? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

On March 1, 2016, Norton Company paid $60,000 as office rent covering the three-month period ending May 31, 2016. Journalize the entry on March 1 by using the alternative treatment of deferred expenses.

What is the term used for the difference between the Equipment account and the Accumulated Depreciation account?

A depreciable asset's cost minus accumulated depreciation is called ________.

Healthy Living, a diet magazine, collected $240,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of December? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

Which of the following assumes that financial statements of a business can be prepared for specific periods?

Explore, a travel magazine, collected $500,000 in subscription revenue in May. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. Provide the journal entry for collection of cash in May. (Ignore explanation.) Assume the magazine initially records a liability for the subscription revenue.