Exam 3: The Adjusting Process

The Supplies account balance on December 31,$4,750; Supplies on hand,$960 3.Wages accrued but not paid,$2,700 4.Depreciation of office equipment,$1,650 5.Rent expired during year,$10,800 ​

At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.

For the year ending June 30,Island Clinical Services mistakenly omitted adjusting entries for (1)$1,500 of supplies that were used,(2)unearned revenue of $4,200 that was earned,and (3)insurance of $5,000 that expired.What is the combined effect of these errors on (a)revenues,(b)expenses,and (c)net income for the year ending June 30?

If the adjustment for accrued salaries at the end of the period is inadvertently omitted,both liabilities and stockholders' equity will be understated for the period.

Journalize the six entries to adjust the accounts at December 31.(Hint: One of the accounts was affected by two different adjusting entries). ​ ​ ​

Accrued revenues would appear on the balance sheet as

Deferred revenue is revenue that is

Two income statements for Toby Sam Enterprises are shown below: ​ Prepare a vertical analysis of Toby Sam Enterprises' income statements.Has operating income increased or decreased as a percentage of revenue?

(a)Explain the differences between accrued revenues and unearned revenues. (b)Explain the differences between accrued expenses and prepaid expenses.​ (c)Give an example of each.

For the year ending December 31,Beard Clinical Supplies Co.mistakenly omitted adjusting entries for (1)$9,800 of unearned revenue that was earned,(2)earned revenue that was not billed of $10,200,and (3)accrued wages of $7,000.Indicate the combined effect of the errors on (a)revenues,(b)expenses,and (c)net income.

At the end of the fiscal year,the usual adjusting entry for depreciation on equipment was omitted.Which of the following is true?

The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.

What is the purpose of the adjusted trial balance?

Complete the missing items in the Summary of Adjustments chart:

Accrued expenses are ordinarily reported on the balance sheet as

What effect will this adjustment have on the accounting records?

The supplies account had a balance of $4,400 at the beginning of the year and was debited during the year for $2,400,representing the total of supplies purchased during the year.If $400 of supplies are on hand at the end of the year,the supplies expense to be reported on the income statement for the year is

Indicate whether the following error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much. ​ The adjustment for accrued fees of $1,170 was journalized as a debit to Accounts Receivable for $1,170 and a credit to Fees Earned for $1,107.

By ignoring and not posting the adjusting journal entries to the appropriate accounts,net income will always be overstated.

Which of the following is not true regarding depreciation?