Exam 3: The Adjusting Process

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The last pay day of December is Friday, December 27. Assuming the next pay period begins on Monday, December 30 and the proper adjusting entry is journalized at the end of the fiscal period (December 31). The entry for the payment of the payroll on Friday, January 10 includes a:

If there is a balance in the prepaid rent account after adjusting entries are made, it represents a(n)

Protonix Corp has a payroll of $8,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. The adjusting entry on December 31, 2015 assuming the year ends on Thursday would be:

If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)

Requirement: Make the journal entries for both of the following: (a) On December 1, $18,000 was received for a service contract to be performed from December 1 through until April 30. (b) If the service work for this contract is performed evenly and on a regular basis throughout this period, prepare the adjusting journal entry as of year-end, December 31.

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors on revenues, expenses, and net income?

Deferred expenses have

Which of the following is considered to be an accrued expense?

The Supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies were on hand. Prepare the adjusting entry for supplies.

The matching concept supports matching expenses with the related revenues.

The adjusted trial balance verifies that total debits equals total credits before the adjusting entries are prepared.

The type of account and normal balance of Unearned Rent is

Prepare adjusting entries for the following transactions:

As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called

Deferred revenue is revenue that is

What is the purpose of the adjusted trial balance?

Generally accepted accounting principles require the accrual basis of accounting.

Fees receivable would appear on the balance sheet as a(n)

Even though GAAP requires the accrual basis of accounting, some businesses prefer using the cash basis of accounting.

Depreciation Expense is reported on the balance sheet as an addition to the related asset.