Exam 3: The Adjusting Process

On December 31,2019,$2,500 of salaries have been earned but not yet paid to employees.If the business failed to make an adjusting entry on December 31,2019,indicate the effect on assets,liabilities,equity,and net income. Understated, Overstated, No Effect Assets Liabilities Equity Net Income

Dickens Services Company performed accounting services for a client in December.A bill was mailed to the client on December 30.The company received a check by mail on January 5.Which of the following accounts should appear on the balance sheet as of December 31 as related to the services performed?

In the case of a deferred expense,the adjusting entry required at the end of a period will consist of a debit to the Prepaid Expense account.Assume the deferred expense was initially recorded as an asset.

The accounts that are used in a worksheet are taken from and listed in the same order as the ________.

On January 1,Nash Company had $1,000 of supplies on hand.During January,Nash purchased $5,500 worth of new supplies.At the end of the month,a count revealed $700 worth of supplies remaining on the shelves.The adjusting entry needed will include a debit to Supplies Expense of $5,800.The supplies were initially recorded as an asset.

The following extract was taken from the worksheet of Special Events Bakers for the year 2019. Special Events Bakers Worksheet December 31, 2019 For the above information,determine the amount of Depreciation Expense for the equipment used in the business.

In the case of a deferred expense,the adjusting entry required at the end of a period will consist of a credit to the Prepaid Expense account.Assume the deferred expense was initially recorded as an asset.

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,and journalize the adjusting entry recorded on December 31,2018.Omit explanation.

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

On April 1,Beta Company purchased office supplies for $1,500.At the end of April,Beta's employees took a count of the remaining supplies and found that there was $500 of supplies left.Provide the adjusting entry needed at the end of April.(Ignore explanation).Assume the office supplies were initially recorded as an asset.Assume there were no office supplies on hand prior to the purchase on April 1.

Adjusting entries are completed to ensure that all income statement accounts for the accounting period examined have been recorded and to update the balance sheet accounts.

Princeton Financial Services Company purchased computers that are to be used in its consulting services.Based on the matching principle,what account,other than Computers,should appear on the balance sheet as of December 31,2018?

The matching principle states that ________.

On September 1,Patterson Maintenance Company contracted to provide monthly maintenance services for the next five months at a rate of $2,700 per month.The client paid Patterson $13,500 on September 1.Assuming Patterson records deferred revenues using the alternative treatment,what would be the entry on September 1?

The unadjusted trial balance of Albert Business Consulting at December 31,2018,and the data for the adjustments follow: Albert is preparing financial statements for the year ending December 31,2018. Adjustment data at December 31 follows: a.Albert pays its employees each Friday.December 31,2018 falls on a Monday.The employees will earn $1,250 for the five-day work week. b.On August 31,2018,Albert agreed to provide consulting services to Smith Company for 6 months,beginning on September 1,2018,at $1,500 per month.Smith paid $9,000 on August 31,2018.Albert treats deferred revenues initially as liabilities. c.Albert prepaid 6 months of business insurance on September 30,2018.The insurance begins on October 1.Albert treats deferred expenses initially as assets. d.On December 31,2018,Albert received a bill for the November and December advertising in a local newspaper,$800.This bill will be paid on its due date,which is January 10,2019. e.As of December 31,2018,Albert had performed services for Alliance Company for $5,000.The invoice will be sent on January 5,2019 and payment is due on January 15,2019.Albert received the payment on its due date. Requirement 1.Prepare the adjusting journal entries at December 31,2018. 2.Prepare the adjusted trial balance at December 31,2018.Include a proper heading.

For each of the following statements,indicate whether it applies to: the cash basis of accounting (cash basis) the accrual basis of accounting (accrual basis) both the cash and accrual basis of accounting (both) neither the cash nor the accrual basis of accounting (neither). Your response should be cash basis,accrual basis,both,or neither. Statement Applies to An easier method of accounting to follow Provides a better picture of a business's revenues and expenses Small businesses may use this method

A depreciable asset's cost minus accumulated depreciation is called ________.

The cash basis of accounting ignores ________.

Mercury Company sells tickets in advance for its weekly productions and records the proceeds as Unearned Revenue.At the end of each month,the company makes an adjusting entry to account for the tickets used during the month (ticket revenue.)On March 1,the Unearned Revenue account had a credit balance of $5,000.During March,Mercury sold 500 tickets at $40 each,and 450 tickets were used during the month.What is the balance in Unearned Revenue at the end of March?

The matching principle ensures all expenses are recorded when they are incurred during the period and are matched to the cash payments for expenses.