Exam 3: The Adjusting Process

Robert Rogers, CPA, owns a computer that is used in his consultancy services. As per the matching principle, the related account that should appear on the balance sheet as of December 31, 2014 is:

Education for All sells tickets in advance for their weekly productions and records the proceeds as Unearned Revenue. At the end of each month, Education for All 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 $4,000. During March, they sold 300 tickets at $20 each and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?

The sum of all the depreciation expense recorded to date for a depreciable asset is called:

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

On September 1, 2014, Joy Company paid $8,000 in advance for an 8-month rental space covering the period of September, 2014 through April, 2015. The prepaid expense was initially recorded as an asset. Joy makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2014 would include a:

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

Hank's Tax Planning Service started business in January, 2014. He rented an office for $1,800 a month starting January 1. On January 1, he prepaid the rentals through June 30. He makes accrual adjustments monthly. What is the balance in the Prepaid Rent account as of April 30?

Which of the following accounts would be used under the accrual method of accounting, but not under the cash basis accounting?

Henry Tax Planning Service bought communications equipment for $9,600 on January 1, 2015. It has an estimated useful life of 5 years and zero residual value. Henry uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2015, the balance in the Accumulated Depreciation account for this equipment is:

Viva Inc. had bought machine X for $15,500 two years ago. The machine had no residual value and had an estimated useful life of 10 years. If the company uses the straight line depreciation method, calculate the current book value of the machine.

The liability created when a business collects cash from customers in advance of completing a service or delivering a product is called:

Accrued revenues are the income that has been received but not earned.

The value of a depreciable asset at the end of its useful life is called:

The following information is available for Able Company's Office Supplies account. Beginning balance \ 2,000 Office Supplies expensed \ 8,000 Ending balance \ 3,000 From the above information, calculate the amount of office supplies purchased.

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 an impact of this omission?

On January 1, 2014, Smith had a beginning balance in Prepaid Insurance Expense of $1,200. On February 1, 2014, Smith paid an annual insurance premium in the amount of $4,800. On February 28, 2014, the balance in Prepaid Insurance is $2,000. The prepaid expense was initially recorded as an asset.

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

The account names in a worksheet are taken from and listed in the same order as the:

Which of the following entries would be made as the result of the revenue recognition principle?

A depreciable asset's cost minus accumulated depreciation is called: