Exam 3: Adjusting Accounts and Preparing Financial Statements

Under the alternative method for recording prepaid expenses,which is the correct set of journal entries? Initial Entry Adjusting Entry A. Insurance Expense Prepaid Insurance Cash Insurance Expense B. Cash Prepaid Insurance Insurance Expense Insurance Expense C. Prepaid Expense Prepaid Insurance Cash Insurance Expense D. Prepaid Expense Insurance Expense Cash Prepaid Insurance E. Prepaid Expense Cash Insurance Expense Prepaid Insurance

June 30,2010,the end of the quarter is on a Wednesday.Employees get paid each Friday for the week worked.Abel Co.has five employees who earn $100 per day each.Make the necessary adjusting journal entry for June 30.

A broad principle that requires identifying the activities of a business with specific time periods such as months,quarters or years is the:

What are some of the steps that Ben Huh took to control CheezBurger Network costs?

It is acceptable to record prepayment of expenses as debits to expense accounts.

A partially completed worksheet is shown below.The unadjusted trial balance columns are complete.Complete the adjustments,adjusted trial balance,income statement and balance sheet columns.

The ______________ refers to the steps in preparing financial statements for users.

A current ratio of 2:1 suggests that a company has ____________ current assets to cover current liabilities.

June 30,2010,the end of the quarter is on a Wednesday.Employees get paid each Friday for the week worked.Abel Co.has five employees who earn $100 per day each.Assuming the proper adjusting journal entry was made on June 30,prepare the journal entry to record the payment of wages on July 2.

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

Compute profit margin ratio given the following information. Cost of Goods Sold $53,000 Net Income 60,000 Gross Profit 800,000

Pfister Co.leases an office to a tenant at the rate of $5,000 per month.The tenant contacted Pfister and arranged to pay the rent for December 2011 on January 8,2012.Pfister agrees to this arrangement. a. Prepare the journal entry that Pfister must make at December 31, 2011 to record the accrued rental revenue. b. Prepare the journal entry to record the receipt of the rent on January 8, 2012.

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their ________________________ year.

On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately.If the purchase was recorded in the Prepaid Insurance account and the company records adjustments only at year-end,the adjusting entry at the end of the first year is:

Compute profit margin ratio given the following information. Cost of Goods Sold $28,000 Net Income 21,400 Gross Profit 400,000

Prior to recording adjusting entries,the Office Supplies account had a $359 debit balance.A physical count of the supplies showed $105 of unused supplies available.The required adjusting entry is:

Net income for a period will be overstated if accrued salaries are not recorded at the end of the accounting period.

Which of the following statements is true?

List and explain the steps in preparing a 10-column worksheet.

Prepare a balance sheet from the adjusted trial balance of Hanson Storage.