Exam 3: The Adjusting Process

The balance in the supplies account, before adjustment at the end of the year is $6,250. The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies

The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

The type of account and normal balance of Accumulated Depreciation is

On April 30, a business estimates depreciation on equipment used during the first year of operations to be $2,900. (a) Journalize the adjusting entry required as of April 30. (b) If the adjusting entry in (a) were omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of April 30?

Ski Master Company pays weekly salaries of $18,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Wednesday.

Proper reporting of revenues and expenses in a period is due to the accounting period concept.

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

Deferred expenses have

A company realizes that the last two day's revenue for the month was billed but not recorded. The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.

Revenues and expenses should be recorded in the same period to which they relate.

Vertical analysis compares each item in a financial statement with a total amount from the same statement.

For the year ending December 31, 2010, Nathan Clinical Supplies Co. mistakenly omitted adjusting entries for (1) $8,900 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 for 2010.

The adjusting entry to record the depreciation of equipment for the fiscal period is

The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a:

Which of the following is an example of accrued revenue?

By matching revenues and expenses in the same period in which they incur

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

Using accrual accounting, expenses are recorded and reported only