Exam 3: The Adjusting Process

Financial statements are prepared from the balances in a(n)________.

An adjusted trial balance does not list the revenues and expenses of a business.

On July 1,Alpha Inc.paid rent of $15,000 for a small equipment storage area for the period of July 1 till December 31.Provide the adjusting journal entry on July 31.(Ignore explanation)Assume the prepaid expense is initially recorded as an asset.

Duncan Services Inc.records prepaid expenses as expenses when incurred,and unearned revenues as revenues when the payment is received in advance.At the end of the year,Duncan Services Inc.makes the necessary adjustments based on accrual basis accounting.On July 1,it paid rent for an office in the amount of $24,000 for the period July 1 through June 30 of the following year.Provide the year-end adjusting entry for rent prepayment.

Under accrual accounting,transactions are recorded only when cash is received or paid.

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

On March 1,2014,Nortons Inc.paid $60,000 as office rent covering the three-month period ending May 31,2014.Journalize the entry on March 1 by using the alternative treatment of prepaid expenses.

In accounting,depreciation refers to the ________.

Unearned Revenue is a(n)________ account and carries a ________ normal balance.

If an adjusting entry includes a debit to Rent Expense,that would indicate that the payment of rent had been previously recorded as a(n)________.

The liability created when a business collects cash from its customers before completing a service or delivering a product is called ________.

GAAP requires a public company to prepare a worksheet for financial reporting purposes.

The entry to record depreciation includes a debit to the ________.

An expense that has been incurred but not yet paid is called a(n)________.

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

Which of the following entries would be made because of the matching principle?

The adjusted trial balance shows ________.

Techno Technical Services is working on a six-month job for a client,starting on February 1.It will collect $30,000 from its customer when the job is finished.On March 1,the company's Accounts Receivable account had a debit balance of $5,000.At the end of March,after monthly adjusting entries have been made,what will be the balance in Accounts Receivable?

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

On December 15,Duncan Services Inc.collected revenue of $3,000 in advance from a new client,and agreed to provide services to the client for the period of December 15 through January 15 of the following year.Assume that the company records unearned revenues using the alternative treatment,and journalize the adjusting entry recorded on December 31.