Exam 3: The Adjusting Process

The accountant for Jones Auto Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last 2 weeks of the year. Which of the following is TRUE?

A company received $5,000 for 100 one-year subscriptions on July 1. The journal entry to record this cash receipt would include a:

At January 1, Smith has a beginning balance in Prepaid insurance expense of $1,200. Smith pays insurance premiums once a year, and his total premium is $4,800. As of the end of February, the balance in prepaid insurance is $2,000.

Double-A Public Relations Firm got a new client on September 1. Double-A will provide services to the new client at a rate of $250 per month for a three-month period beginning September 1. Double-A required the client to pay for the entire period in advance. Please show the journal entry for the cash collected by Double-A on September 1.

Which of the following reports a company's results of operations?

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

The revenue principle is the basis for recording revenues―both when to record revenue and the amount of revenue to record.

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 fell on a Tuesday, and an adjustment entry was made on that date to accrue wage expense. On Friday, February 3, Chelsea Company pays out $25,000 in wages as usual. Please provide the entry needed at the time the wages are paid.

The accountant for Noble Jewelry Repair Services forgot to make an adjusting entry for Depreciation expense for the current year. Which of the following is one of the effects of this error?

In the case of a prepaid expense, the adjusting entry required at the end of a period consists of a credit to Prepaid expense.

Prepare a statement of owner's equity for the year ended December 31, 2012 from the adjusted trial balance below.

A business acquires equipment for $140,000 on January 1, 2011. The equipment depreciation will be $20,000 each year for the seven years of the asset's expected life. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required on December 31, 2011?

Pattie's Event Planning Service has just prepared the unadjusted trial balance, which shows the following balances: Pattie's salaries are $2,000 per week and are paid out at the end of the day on Fridays. The end of the month falls on a Thursday. Patti will make the appropriate accrual adjustment and post to the ledger. The final adjusted balance of Salary payable, as shown on the adjusted trial balance, will be a:

The accountant for Noble Jewelry Repair Services forgot to make an adjusting entry for Depreciation expense for the current year. What is the effect of this error on total assets?

If a company is using the accrual method of accounting, when is revenue recorded?

In accounting, depreciation is the:

Accrued revenue is revenue that:

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 31, and the business must make an adjusting entry to accrue salaries for the second half of October. Please provide that adjusting entry.

Smith Technical Services is working on a six-month job for a client, starting February 1. They will collect $48,000 from their customer when the job is finished. On March 1, their Accounts receivable account has a debit balance of $8,000. At the end of March, after monthly adjusting entries have been made, what will the balance in Accounts receivable be?

At January 1, Smith has $1,200 of supplies on hand. During January, Smith purchases $3,000 worth of new supplies. At the end of the month, a count reveals $500 worth of supplies remaining on the shelves. The adjustment entry needed will include a debit to Supply expense of $3,700.