Exam 3: The Adjusting Process

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

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

In the case of deferred revenue,the cash is received first,and the revenue is earned later.

The accountant of Residential Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense.Which of the following statements is TRUE?

Under cash basis accounting,an expense is recorded only when cash is paid.

A contract can only have one performance obligation.

The accountant for Watson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year.Which of the following statements is TRUE?

Modern Artists' Services signed a contract with a maintenance service company to maintain a building that Modern Artists' will use as an office.The contract states that the work will begin on February 1 and end on May 31.Modern Artists' will pay the maintenance service company $8,000 at the end of May.It accrues Maintenance Expense at the end of every month.What is the balance in the Accounts Payable account for amounts owed to the maintenance service company at the end of March?

Williams Enterprises prepaid three months of office rent totaling $8,700 on October 1,2019.Assuming Williams records deferred expenses using the alternative treatment,what would be the entry on October 1,2019?

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

On September 1,Advantage Maintenance Company contracted to provide monthly maintenance services for the next ten months at a rate of $2,400 per month.The client paid Advantage $24,000 on September 1.The maintenance services began on that date.Assuming Advantage records deferred revenues using the alternative treatment,what would be the adjusting entry recorded on December 31?

On December 15,2018,Donald Services Company 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 deferred revenues using the alternative treatment.Prepare the December 15,2018 journal entry.Omit explanation.

The worksheet is a useful step in preparing adjusting entries and the unadjusted trial balance.

On January 1,2017,the Accounts Receivable of Martha Company had a debit balance of $190,000.During January,the company provided services for $400,000 on account.The company collected $240,000 from its customers on account in January.What was the ending balance in the Accounts Receivable account at the end of January?

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

The accrual method is an easier accounting method to follow than cash basis accounting because it generally requires less knowledge of accounting concepts and principles.

Which of the following accounting terms assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods,such as a month,quarter,or year?

A contra account's normal balance (debit or credit)is the opposite of the normal balance of the related account.

Under accrual basis accounting,an expense is recorded only when cash is paid.

A business hired a repair service to overhaul its plumbing system.The repair service began work on September 15 and intends to complete it on October 15.The business will pay the repair service $4,000 when the work is completed.As of September 30,the work was 50% complete.Provide the adjusting entry to accrue repair expense by the end of September.(Ignore explanation).