Exam 3: The Adjusting Process

Kostner Financial Services Inc.purchased computers that are to be used in its consultancy services.As per the matching principle,the related account that should appear on the balance sheet as of December 31,2014 is ________.

An adjusting entry that credits Salaries Payable is an example of a(n)________.

Which of the following is the correct formula for calculating depreciation under the straight-line method?

Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost,$6,720 with useful life of 8 years; Furniture: Cost,$18,000 with useful life of 12 years; and Computer: Cost,$12,000 with useful life of 4 years.(Assume salvage value of all the assets to be zero.)Ursula's monthly depreciation expense calculated using the straight-line method is ________.

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

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

To match expenses against revenues means to ________.

The Accumulated Depreciation account is ________.

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

Which of the following accounts does cash basis accounting ignore?

In the case of unearned revenue,the adjusting entry at the end of the period includes a debit to Service Revenue.Assume the unearned revenue is initially recorded as a liability.

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

Kostner Financial Services Inc.performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received the client's check by mail on January 5.Which of the following accounts should appear on the income statement for the year ended December 31 as per the revenue recognition principle?

What type of account is Prepaid Rent and what is its normal balance?

Avalon Event Planning Services Inc.records prepaid expenses and unearned revenues using the alternative treatments.It makes adjusting entries as needed to bring its books to the full accrual basis once a year at the end of the year.On October 1,it paid $3,600 for insurance for a one-year period.At the end of the year,it will make an adjusting entry that debits Insurance Expense for $900.

The salaries are $6,000 per week of 5 working days and are paid weekly at the end of Fridays.The end of the month falls on a Thursday.The accountant of Paramount Inc.made the appropriate accrual adjustment and posted it to the ledger.The final adjusted balance of Salaries Payable,as shown on the adjusted trial balance,will be a ________. (Assume that there was no beginning balance in the Salaries Payable account.)

Henry Tax Planning Service bought computer equipment for $24,000 on January 1,2014.It has an estimated useful life of 4 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.Calculate the amount of Depreciation Expense for the period,January 1,2014 through September 30,2014,for this equipment.

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

Kostner Financial Services Inc.purchased computers that are to be used in its consultancy services.As per the matching principle,the related account that should appear on the income statement for the year ended December 31,2014 is ________.

Revenue is said to be earned when the business has ________.