Exam 3: Adjusting Accounts for Financial Statements

Chase Company rents space to a tenant for $2,200 per month.The tenant currently owes rent for November and December.The tenant has agreed to pay the November,December,and January rents in full on January 15 and has agreed not to fall behind again.The adjusting entry needed on December 31 is:

The ________ depreciation method allocates equal amounts of an asset's cost to depreciation during its useful life.

On December 31,Jacoby Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15.Jacoby follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.The adjusting entry needed on December 31 to accrue this cost is:

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Closing entries result in the Dividends account being transferred into net income or net loss for the period ending.

Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities and collect accrued receivables from the previous accounting period.

On November 1,Jasper Company loaned another company $100,000 at a 6.0% interest rate.The note receivable plus interest will not be collected until March 1 of the following year.The company's annual accounting period ends on December 31,and adjustments are only made at year-end.The adjusting entry needed on December 31 is:

Which of the following does not require an adjusting entry at year-end?

Adjustments are necessary to bring an asset or liability account to its proper amount and also update a related expense or revenue account.

Reversing entries:

The Income Summary account is used to:

Closing entries are required at the end of each accounting period to close all ledger accounts.

A company pays its employees $4,000 each Friday,which amounts to $800 per day for the five-day workweek that begins on Monday.If the monthly accounting period ends on Thursday and the employees worked through Thursday,the amount of salaries earned but unpaid at the end of the accounting period is:

Profit margin = ________ divided by net sales.

Because it is a necessary financial statement,the work sheet must be prepared according to specified accounting procedures.

Trapper Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows: Present the four adjusting journal entries that were recorded by Trapper Company.

All of the following are true regarding unearned revenues except:

List the steps in the accounting cycle.

Asset and liability balances are transferred from the adjusted trial balance to the income statement.

A company's employees earn a total of $10,000 per week for a 5-day week that begins on Monday.December 31 of Year 1 is a Monday,and all employees worked that day. a)Prepare the required adjusting journal entry to record accrued salaries on December 31,Year 1. b)Prepare the journal entry to record the payment of salaries on January 4,Year 2.(Assume no reversing entries were made).