Exam 3: The Adjusting Process

The key differences between the cash basis and accrual basis of accounting are the timing and recognition of assets and liabilities.

West Electrical Company performed services of $8,000 on January 24 and invoiced the customer.West received the $8,000 on January 31.Provide the journal entry on January 31 when the cash was received.(Ignore explanation. )

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?

On December 31,2018 the balance in Energy Exploration Company's Unearned Revenue account was a credit of $6,000.In January,2019,the company received an advance payment of $12,000 from a new customer for services to be performed.By January 31,adjustments were made to recognize $4,000 of the revenue that had been earned during January.What was the balance in Unearned Revenue on January 31,2019?

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.