Exam 3: The Adjusting Process

The table below represents Able Company's supplies account. Please supply the missing amount.

To accrue revenue means that the cash receipt is recorded before the revenue is earned.

On January 1, 2012, Lexmark Company's Accounts receivable account had a debit balance of $10,000. During January, 2012, the company billed customers for services in the amount of $300,000. Also during January, the company collected $240,000 from its customers on account. What was the balance in the Accounts receivable account at the end of January?

Lucent Electrical Repair performs services costing $3,000 on January 12 and invoices the customer. Lucent receives the $3,000 on January 31. What entry is made on January 12 when services were rendered?

Duncan Services initially records prepaid expenses as expenses, and unearned revenues as revenues. Then at the end of the year, they make the necessary adjustments to the accrual basis. On July 1, Duncan paid rent for office space in the amount of $12,000 for the period July 1 through June 30 of the following year. Please provide the adjusting entry that would be needed at year-end.

If a company is using the cash-basis method of accounting, when is revenue recorded?

Unearned revenue would be classified as a(n)________ account.

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1, 2012. It has an estimated useful life of 5 years. Hank records depreciation monthly. As of June 30, 2012, the balance in the Accumulated depreciation account for this equipment is:

The entry to record depreciation includes a credit to which account?

Smith signed a contract with a service provider for security services at a rate of $250 per month for the period of January through June. He will pay the service provider the entire amount at the end of June. Smith makes adjusting entries each month. During the month of February, Smith will record total security expense of $500.

Employees of Robert Rogers, CPA worked during the last two weeks of December. They received their paychecks on January 2. The matching principle would require that which of the following accounts appear on the income statement for the year ended December 31?

Pattie's Event Planning Service collects the fees from their customers in advance. At January 1, 2012, the balance of her Unearned revenue account was a credit of $4,000. During January and February, she collected $2,000 and $1,000 respectively. During the two-month period, she rendered services of $5,500. At the end of February, her adjusted trial balance will show what balance in Unearned revenues?

What type of account is Unearned revenue and what is its normal balance?

Hank's Tax Planning Service has the following plant assets: Hank's monthly depreciation expense is: A)$2,560. B)$4,440. C)$210. D)$370.

Chelsea Services Company pays its staff their wages every Friday. The staff works a five-day work week and the payroll amounts to $25,000 per week. The last day of January falls on a Tuesday, and an adjustment entry is needed to accrue wage expense as of January 31. Please provide that entry.

Which of the following entries would be recorded if a company is using the cash-basis method of accounting?

ABC Company signed a one-year $12,000 note payable at 8% interest on May 1, 2012. If ABC only adjusts their accounts once a year at year-end, how much interest expense must be accrued on December 31, 2012?

Below is the adjusted trial balance for Parsons Repair Service. Please prepare the income statement for the year ended December 31, 2012.

Financial statements are prepared from a(n):

On April 1, Balsa Company purchased $800 of office supplies. At the end of April, they took a count of the remaining supplies and found that there were $150 of supplies left. Please provide the adjusting entry needed at the end of April.