Exam 3: The Adjusting Process

Robert Rogers, CPA performed accounting services for a client in December. A bill was mailed to the client on December 30. Roberts received a check in the mail on January 5. The revenue principle would require that which of the following accounts appear on the balance sheet for December 31?

All of a company's accounts and their balances appear on the:

Pattie's Event Planning Service records prepaid expenses as expenses when cash is paid out, and records unearned revenues as revenues when cash is collected. She then makes adjusting entries as needed to bring her books up to the full accrual basis once a year at the end of the year. This year on October 1, she paid out $3,600 for insurance for a one-year period. At the end of the year, she will make an adjustment entry that debits Insurance expense for $900.

Accrual accounting records transactions ONLY when cash is received or paid.

Entries that record cash collected before the revenues are earned are:

The revenue principle guides accountants in which of the following ways?

A business pays its employees' monthly salaries of $20,000, half on the 15^th day of each month, and half on the first day of the following month. It is now October 15, and the business pays out $10,000 in salaries. Please provide the journal entry for that payment.

An adjusting entry that credits Salaries payable is an example of a(n):

A contra account has two characteristics: (1)a contra account is paired with a companion account, and (2)a contra account's normal balance is the same as that of the companion account.

Entries that record an expense before the cash is paid are:

A business hired a repairman to overhaul their plumbing system. The repairman began working on September 15 and finished the work on October 15. The business agreed to pay him $4,000 when the work was completed. As of September 30, the work was 50% complete, and the business made an adjusting entry to accrue repair expense as of the end of September. On October 15, the job was done and the business paid the repairman in full. Please provide the journal entry for the cash payment on October 15.

Blum Services has the following unadjusted balances at year-end. The following information is available to use in making adjusting entries. a. Office supplies on hand at year-end: $250 b. Prepaid insurance expired during the year: $325 c. Unearned revenue remaining at year-end: $2,500 d. Depreciation expense for the year: $1,800 e. Accrued salaries at year-end: $900 Using the work sheet below, prepare the trial balance, the adjustments and the adjusted trial balance for Blum Services.

In accounting, the matching principle means to match which of the following?

Under cash-basis accounting, an expense is recorded ONLY when cash is paid out.

Prepaid insurance is an asset account.

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 31 when the cash was received?

On August 1, 2011, Xcel Auto Repair paid $6,000 in advance for six months' rent. Xcel makes proper adjusting entries at the end of every month. What is the balance of Prepaid rent on December 31, 2011?

Entries that record cash paid out before the expense is incurred are:

Hank's Tax Planning Service has a beginning balance in the Supplies account of $800. During the current month, he purchased an additional $2,000 of supplies. At the end of the month, he had $250 of supplies left. The amount of supply expense to be recorded for the month is:

Which of the following would be considered an interim accounting period?