Exam 3: The Adjusting Process

The accountant of Zeus Legal Services failed to make an adjusting entry for supplies that had been used for the year.Assume the supplies were initially recorded as an asset.Which of the following statements is true?

Luminous Electrical,Inc.performed services of $8,000 on January 24 and invoiced the customer.Luminous received the $8,000 on January 31.Provide the journal entry on January 24 when services were performed.(Ignore explanation. )

The accounting records for Patricia Event Planning Services include the following select unadjusted balances on December 31,2016: Salaries Expense,$6,000; Service Revenue: $19,000; Unearned Revenue,$400; Supplies Expense,$600; Rent Expense,$300; Depreciation Expense-Equipment,$200. During December,the company worked with a new client and provided event planning services for an upcoming event.It will receive the full amount of $2,400 when the event is completed in January 2017.As of the end of December 2016,it performed one-third of the services covered by the contract.The company made the accrual adjustments.The balance of Service Revenue,as shown on the adjusted trial balance,should be a ________.

Prepaid Insurance is an asset account that appears on the balance sheet.

The accountant of Omega Consulting,Inc.failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year.Assume the company initially recorded a liability.Which of the following statements is true?

The accountant for Sparks Electric,Inc.failed to make an adjusting entry to record $3,000 of telephone expenses for the last two months of the year.Which of the following statements is true?

The accounting period used for the annual financial statements is called the fiscal year.

Melville Services has a weekly payroll of $50,000.December 31,2016 falls on Thursday and Melville will pay its employees the following Monday (January 4,2017)for the previous full week.Assume that Melville has a five-day workweek and has an unadjusted balance in Salaries Expense of $845,000.Prepare the January 4,2017 journal entry.Reversing entries are not made.

The matching principle states that ________.

The goal of the time period concept is to compute an accurate net income or net loss.

Which of the following is a contra account?

Argyle Designs,Inc.has entered into a contract to design 40 new dresses for a customer.It will collect a total of $40,000 after the design services are complete.Argyle started design work on June 1.As of June 30,it finished 8 of the 40 designs.The company will make an adjusting entry at the end of June to accrue $10,000 of service revenue.

Which of the following accounting elements does the matching principle help to match?

An adjusting entry that debits Accounts Receivable is an example of a(n)________.

Paramount Event Planning Services collects fees from its customers in advance.On January 1,2017,the balance of its Unearned Revenue account was $3,000 (CR).During January and February,the company collected $4,000 and $600 as advance fees.During the two-month period,it performed services of $5,500 related to the deferred revenue.What is the balance in Unearned Revenue at the end of February?

Jupiter,Inc.signed a one-year $44,000 note payable at 8% interest on May 1,2016.If Jupiter,Inc.only adjusts its accounts once a year at year-end,how much interest expense was accrued on December 31,2016?

The accountant for Belden 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?

For accounting purposes,depreciation refers to the ________.

Saturn,Inc.signed a one-year $24,000 note payable at 8% interest on May 1,2017.How much interest expense must be accrued on May 31,2017?

The partial worksheet of Ruth Furniture is as follows: Ruth Furniture Workshegt December 31, 2016 Accumulated Depreciation-Equipment \ 8,700 1,200 Common Stock 15,000 Dividends 3,000 Service Revenue 10,600 3,000 Salaries Expense 4,000 Rent Expense 2,000 Depreciation Expense - 1,200 Equipment Supplies Expense 500 Total \ 34,300 \ 34,300 \ 4,700 \ 4,700 Calculate and enter the amounts for the Adjusted Trial Balance columns.