Type of ownership structure Explain whether the financial statement excerpt below is from the financial statements of a corporation, a sole proprietorship, or a partnership: $\begin{array}{llcc} \text { Abhrams, Capital............................ } & \$20,000 \\ \text { Johnston, Capital............................ } &25,000\\ \text {Zinck, Capital.................................. } &\underline{20,000}\\ \text { Total ..............................................} &\$65,000\\ \end{array}$

This is an excerpt from partnership fina

Exam 13: Accounting Information Systems and Adjusting Entries: A Comprehensive Guide

Tabby Corp.'s account balances at December 31, 2020, included Accounts Receivable, $ 192,500 debit; Allowance for Doubtful Accounts, $ 1,250 credit. From a review of the receivables, Blue estimates that $ 7,000 of the December 31 receivables will be uncollectible. The required adjusting entry would include a credit to the allowance account for

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Question 1

Correct Answer:

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D

Trial balance correction The Controller of SHD Corporation asks his assistant to correct the company's December 31, 2020, trial balance. The preliminary trial balance, which does not balance, is reproduced below: SHD Corporation Trial Balance December 31, 2020 Cash........................................ Accounts Receivable................ Prepaid Insurance.................... Equipment............................... Inventories............................... Accounts Payable..................... Common Shares....................... Sales........................................ Salaries.................................... Office Supplies.......................... Depreciation Expense................ \ 10,000 15,000 600 40,000 9,000 64,000 2,150 \1 1,590 110,000 17,100 The assistant's review uncovered the following errors: 1.The accounts payable for the purchase of inventories in the amount of $ 6,560 was recorded as $ 5,650 in error. 2.Depreciation expense was understated by $ 450. 3.Office supplies were overstated by $ 150. 4.A collection from a customer in the amount of $ 4,000 was not posted to the receivable ledger. Instructions Prepare a corrected trial balance.

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Question 2

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SHD Corporation
Corrected Trial Balance
December 31, 2020

$\begin{array}{c}\begin{array}{lll}\\\text {Cash...........................................................................}\\ \text {Accounts Receivable $ (\$ 15,000-\$ 4,000) $....................}\\ \text {Prepaid Insurance}.......................................................\\ \text {Equipment..................................................................}\\ \text {Inventories..................................................................}\\ \text {Accounts Payable $ (\$ 11,590+\$ 6,560-\$ 5,650) $.........}\\ \text {Common Shares..........................................................}\\ \text {Sales............................................................................}\\ \text {Salaries........................................................................}\\ \text {Office Supplies $ (\$ 2,150-\$ 150) $...................................}\\ \text {Depreciation Expense $ (\$ 2,550+\$ 450) $........................}\end{array}\begin{array}{r}\underline{\text { Debit } }\\10,000 \\11,000 \\600 \\40,000 \\9,000 \\\\\\64,000 \\2,000 \\\underline{3,000} \\\underline{\$ 139,600} \end{array}\begin{array}{lll}\underline{\text { Credit}}\\\\\\\\12,500 \\110,000 \\17,100\\\\\\\\\underline{\quad\quad}\\\underline{\$139,600}\end{array}\end{array}$

Which of the following equations is correct?

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Question 3

Correct Answer:

Verified

D

Which of the following criteria does NOT have to be met before an event or transaction should be recorded for accounting purposes?

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Question 4

Some events are NOT recorded in the accounting information system because

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Question 5

A post-closing trial balance

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Question 6

The accounting equation must remain in balance

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Question 7

Performing a service for a client on account will

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Question 8

Adjusting entries are necessary to 1. obtain a proper matching of revenue and expense. 2. achieve an accurate statement of assets and equities. 3. adjust assets and liabilities to their fair market value.

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Question 9

Factors that shape an accounting system include the

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Question 10

The debit and credit analysis of a transaction normally takes place

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Question 11

Type of ownership structure Explain whether the financial statement excerpt below is from the financial statements of a corporation, a sole proprietorship, or a partnership: Abhrams, Capital............................ \2 0,000 Johnston, Capital............................ 25,000 Zinck, Capital.................................. Total .............................................. \6 5,000

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Question 12

Use the following information for the following questions: During the 2020 calendar year, Purple Corp. paid or collected the following items: Insurance premiums paid................... \1 4,200 Interest collected................................ 21,700 Salaries paid....................................... 131,300 As well, the comparative statement of financial position showed the following balances: Prepaid Insurance..................... \1 ,400 \1 ,500 Interest Receivable..................... 2,800 2,100 Salaries Payable.......................... 14,700 12,900 -The interest revenue on the 2020 statement of comprehensive income was

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Question 13

On December 1, 2020, Flynn Consulting paid $ 27,000 for a three-year insurance policy (December 1, 2020 to November 30, 2023) and debited the entire amount to Prepaid Insurance. The December 31, 2020, required adjusting entry in connection with this policy would be

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Question 14

An example of a temporary account is

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Question 15

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

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Question 16

Adjusting and closing entries The following trial balance was taken from the books of Kaslo Corporation at December 31, 2020: At year end, the following items have not yet been recorded. 1. Insurance expired during the year, $ 3,000. 2. Estimated bad debts, 1 percent of gross sales. 3. Depreciation on furniture and equipment, 10% per year. 4. Interest at 9% is receivable on the note for one full year. 5. Rent paid in advance at December 31, $ 6,800 (originally debited to expense). 6. Accrued salaries at December 31, $ 6,200. Instructions a) Prepare the necessary adjusting entries. b) Prepare the necessary closing entries.

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Question 17

On June 1, 2020, Carr Corp. loaned Farr Corp. $ 600,000 on a 5% note, payable in five annual instalments of $ 120,000 (plus interest), beginning January 2, 2021. Interest on the note is payable on the first day of each month beginning July 1, 2020. Farr made timely payments through November 1, 2020. On January 2, 2021, Carr received payment of the first principal instalment plus all interest due. At December 31, 2020, Carr's interest receivable on this loan is

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Question 18

An adjusting entry for bad debts will generally

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Question 19

On November 1, 2020, Halton Corp. purchased equipment by signing a 6-month, 4% note for $ 180,000. The December 31, 2020, adjusting entry required in connection with this note is

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Question 20

Which of the following equations is correct?

Which of the following criteria does NOT have to be met before an event or transaction should be recorded for accounting purposes?

Some events are NOT recorded in the accounting information system because

A post-closing trial balance

The accounting equation must remain in balance

Performing a service for a client on account will

Adjusting entries are necessary to 1. obtain a proper matching of revenue and expense. 2. achieve an accurate statement of assets and equities. 3. adjust assets and liabilities to their fair market value.

Factors that shape an accounting system include the

The debit and credit analysis of a transaction normally takes place

On December 1, 2020, Flynn Consulting paid $ 27,000 for a three-year insurance policy (December 1, 2020 to November 30, 2023) and debited the entire amount to Prepaid Insurance. The December 31, 2020, required adjusting entry in connection with this policy would be

An example of a temporary account is

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

An adjusting entry for bad debts will generally

On November 1, 2020, Halton Corp. purchased equipment by signing a 6-month, 4% note for $ 180,000. The December 31, 2020, adjusting entry required in connection with this note is

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

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Financial Position and Cash Flows

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Property, Plant, and Equipment: Accounting Model Basics

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