Exam 3: The Adjusting Process

Revenue that has been earned but not yet collected in cash is called a(n)________.

Avalon Event Planning Services records deferred expenses and deferred revenues using the alternative treatments.It makes adjusting entries as needed to bring its books to the full accrual basis once a year at the end of the year.On October 1,it paid $3,700 for insurance for a one-year period.At the end of the year,it will make an adjusting entry that debits Insurance Expense for $1,850.

Adjusting entries may involve any account,including Cash.

Saturn Services Company 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? (Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number. )

To fill in the unadjusted trial balance columns in a worksheet,the account balances before adjustments are copied directly from the ________.

The advance cash payments of future expenses are called ________.

Techno Technical Services is working on a six-month job for a client,starting on February 1.It will collect $30,000 from its customer when the job is finished but the revenue is earned evenly over the six months.On March 31,before adjusting entries are made,Techno's Accounts Receivable account had a debit balance of $6,000.After the March 31 monthly adjusting entry has been made,what will be the balance in Accounts Receivable?

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. )

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?

On January 1,Unearned Revenue of Grossman Company had a beginning balance of $1,400.During January,the company earned $700 of the deferred revenue.The company also collected $4,000 from a new customer for services to be performed the following month.At the end of January,the Unearned Revenue account should have a balance of $4,000.

Ariel Tax Planning Service has the following plant assets: Communications equipment: Cost,$9,600 with useful life of 8 years;Furniture: Cost,$17,712 with useful life of 12 years;and Computer: Cost,$14,400 with useful life of 4 years.Assume the residual value of all the assets is zero and the straight-line method is used. Ariel's monthly depreciation journal entry will include a ________.

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

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

The expected value of a depreciable asset at the end of its useful life is called ________.

Viva Company bought machine X for $18,000 two years ago.The machine had no residual value and had an estimated useful life of 10 years.If the company uses the straight-line depreciation method,calculate the current book value of the machine.

Deferred revenues are assets because the business has collected the cash before earning the revenue.

Hank's Tax Planning Service started business in January 2016.The company rented an office for $1,800 per month starting from January 1,2016.On that day,Hank prepaid the rent through June 30.The company makes adjusting entries at the end of each month.What is the balance in the Prepaid Rent account as of April 30,2016?

Deferred expenses are also called prepaid expenses.

Under accrual basis accounting,revenue is recorded only when cash is received.

The worksheet is NOT a journal,a ledger,or a financial statement.