Need A Tutor?    |   Need Homework Help?                                                                             Help and Support     | Join or Cancel

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2

A company purchased new furniture at a cost of $15,000 on September 30.
The furniture is estimated to have a useful life of 5 years and a salvage value of $2,100.
The company uses the straight-line method of depreciation.
How much depreciation expense will be recorded for the furniture for the first year ended December 31?
 
$645.
 
2,580 x 3/12
   
After preparing and posting the closing entries for revenues and expenses, the income summary account has a
debit balance of $23,000. The entry to close the income summary account will be:
 
Debit Retained earnings $23,000; credit Income Summary $23,000.
 
Retained earnings                  $23,000
Income Summary                   $23,000
   
If a company is considering the purchase of a parcel of land that was originally acquired by the seller for $92,000 is currently
offered for sale at $164,000, is considered by the purchaser as easily being worth $154,000, and is finally purchased for
$151,000, the land should be recorded in the purchaser's books at:
 
$151,000
   
On December 1, Milton Company borrowed $430,000, at 9% annual interest,
from the Tennessee National Bank. Interest is paid when the loan matures one year from the issue date.
What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end?
 
$3,225
 
430,000 × 0.09 × 30/360 = 3,225
   
If Houston Company billed a client for $26,000 of consulting work completed, the accounts receivable asset increases by $26,000 and:
 
Revenue increases $26,000.
   
The assets of a company total $704,000; the liabilities, $202,000. What is the amount of equity?
 
$502,000
 
704,000 - $202,000 = $502,000
   
Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,700 in dividends during the current year.
The entry to close the dividends account at the end of the year is:
 
 
Debit Retained earnings $5,700; credit Dividends $5,700
   
A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,251 of supplies on hand.
The general ledger balance before any adjustment is $2,110.
What is the adjusting entry for office supplies that should be recorded on May 31?
 
Debit Supplies Expense $859 and credit Supplies $859.
 
2,110 - $1,251
   
For the year ended December 31, a company had services revenue of $206,000 and wages expense of $123,600.
Dividends of $41,200 were paid during the year. Which of the following entries could not be a closing entry?
 
Debit Income Summary $206,000; credit Revenues $206,000
   
Prior to recording adjusting entries, the Office Supplies account had a $390 debit balance.
A physical count of the supplies showed $97 of unused supplies available. The required adjusting entry is:
 
Debit Office Supplies Expense $293 and credit Office Supplies $293.
   
The following information is available for the Noir Detective Agency, Inc.
After these closing entries what will be the balance in the Retained Earnings account?
 
Net Loss                       $ 27,600
Retained earnings         294,000
Dividends                       36,000
 
$230,400
 
294,000 + (-27,600) - 36,000 = 230,400
   
What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $8,750 before adjustment,
and the unexpired amount per analysis of policies is, $3,750?
 
Debit insurance expense 5,000; Credit prepaid insurance 5,000
 
8,750 - 3,750
   
Based on the following information from Schrute Company's balance sheet, calculate the current ratio.
 
                         
Current assets             $       144,000
Investments                            61,400
Plant assets                           440,000
Current liabilities                   58,000
Long-term liabilities              109,000
Retained earnings                 478,400
 
2.48.
 
144,000 / 58,000
   
Sanborn Company has 10 employees, who earn a total of $3,200 in salaries each working day.
They are paid on Monday for the five-day workweek ending on the previous Friday.
Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday.
The adjusting entry needed on December 31 is:
 
Debit Salaries Expense, $9,600; credit Salaries Payable, $9,600.
  
3,200 X 3 = 9,600
   
The Unadjusted Trial Balance columns of a work sheet total $86,300. The Adjustments columns contain entries for the following:
 
1. Office supplies used during the period,      $1,900.
2. Expiration of prepaid rent,                          $900.
3. Accrued salaries expense,                           $700.
4. Depreciation expense,                                $1,000.
5. Accrued service fees receivable,                 $600.
 
The Adjusted Trial Balance columns total is:
 
$88,600
   
A company had no office supplies available at the beginning of the year.
During the year, the company purchased $390 worth of office supplies.
On December 31, $135 worth of office supplies remained.
How much should the company report as office supplies expense for the year?
 
$255
 
390 - 135 = $255
   
Sanborn Company rents space to a tenant for $2,900 per month.
The tenant currently owes rent for November and December.
The tenant has agreed to pay the November, December, and January rents in full on January 15 and has agreed not to fall behind again.
The adjusting entry needed on December 31 is:
 
Debit Rent Receivable, $5,800; credit Rent Earned, $5,800
 
2,900 X 2 = 5,8000
   
The following information is available for the Higgins Travel Agency.
After closing entries are posted, what will be the balance in the Retained earnings account?
 
                         
Net Income                 $          43,500
Retained earnings                   130,500
Dividends                                12,400
 
$161,600.
 
130,500 + 43,500 - 12400 = 161,600
   
On December 1, Simpson Marketing Company received $7,200 from a customer for a 2-month marketing plan to
be completed January 31 of the following year. The cash receipt was recorded as unearned fees.
The adjusting entry for the year ended December 31 would include:
 
a debit to Unearned Fees for $3,600.
 
7,200 / 2 = 3,600
   
A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below.
What amount will be posted to Retained earnings in the process of closing the Income Summary account?
(Assume all accounts have normal balances.)
 
 

Retained earnings	$	9,500
Dividends		13,300
Revenue		38,000
Rent expense		3,800
Salaries expense		8,850
Insurance expense		430
Depr. Expense-equipment		660
Accum depr. equipment		1,980

 
$10,960 credit
 

Revenue	38,000
Less: Rent expense	-          3,800
Less: Salaries expense	-          8,850
Less: Insurance expense	-          430
Less: Depr. Expense-equipment	-          660
Net Income	-          24,260
Less: Dividend	-          13,300
Addition to Retained Earnings	= 10,960

   
Tiptoe Shoes, had annual revenues of $194,000, expenses of $108,200, and paid dividends of $21,600 during the current year.
The retained earnings account before closing had a balance of $306,000. The Net Income for the year is:
 
    $85,800
 
194,000 - $108,200 = 85,800
   
The Retained earnings account has a credit balance of $40,000 before closing entries are made.
Total revenues for the period are $58,200, total expenses are $41,300, and dividends are $10,200.
What is the correct closing entry for the expense accounts?
 
Debit Expense accounts $41,300; credit Income Summary $41,300
   
An adjusting entry was made on year-end December 31 to accrue salary expense of $3,200.
Assuming the company does not prepare reversing entries,
which of the following entries would be prepared to record the $7,000 payment of salaries in January of the following year?
 
Salaries Payable          3,200    
Salaries Expense         3,800    
Cash                            7,000
 
7,000 – 3,200
   
Use the information in the adjusted trial balance presented below to calculate current assets for Taron Company:
 
Account Title                                                               Dr.                    Cr.                               
Cash                                                                 $          56,000                                                  
Accounts receivable                                                    27,000                                                  
Prepaid insurance                                                       11,000                                                  
Equipment                                                                   210,000                                                
Accumulated depreciation—Equipment                                             105,000                        
Land                                                                            106,000                                                
Accounts payable                                                                                28,000                        
Interest payable                                                                                  5,150                          
Unearned revenue                                                                              8,300                          
Long-term notes payable                                                                    63,000                          
Retained earnings                                                                               200,550                      
Totals   $                                                                      410,000           410,000                      
 
    $94,000.
    $410,000.
    $41,200.
    $106,000.
 
Cash                                        56,000                                                  
Accounts receivable               + 27,000                                               
Prepaid insurance                  + 11,000
                                                = 94,000
   
Adjusting the accounts is the process of:
 
updating the accounts at the end of the period
   
Which of the following is an example of a deferral​ (or prepaid) adjusting​ entry?
 
Recording the usage of office supplies during the period
   
The adjusted trial balance shows
 
account balances after adjustments.
   
A worksheet is:
 
an internal document that helps summarize data for the preparation of financial statements
   
Assets and liabilities are listed on the balance sheet in order of their:
 
Liquidity
   
Which of the following accounts would be included in the plant assets category of the classified balance​ sheet?
 
Accumulated Depreciation
   
Which situation indicates a net loss within the Income Statement section of the​ worksheet?
 
Total debits exceed total credits
   
Which of the following accounts is not​ closed?
 
Accumulated Depreciation
   
Which of the following accounts may appear on a​ post-closing trial​ balance?
 
Cash, Salaries​ Payable, and​ Owner, Capital
   
Which of the following steps of the accounting cycle is not completed at the end of the​ period?
 
Journalize transactions as they occur.
   
Clean Water Softener Systems has Cash of $ 600​, Accounts Receivable of $900​, and Office Supplies of $400.
Clean owes $500 on Accounts Payable and has Salaries Payable of $200. Clean​'s current ratio is:
 
2.71
   
Which of the following statements concerning reversing entries is​ true?
 
Reversing entries are most often used with​ accrual-type adjustments.
   
Assume that the weekly payroll of In the Woods Camping Supplies is $300. December​ 31,
end of the​ year, falls on​ Tuesday, and In the Woods will pay its employee on Friday for the full week.
What adjusting entry will In the Woods make on​ Tuesday, December​ 31?
 
Salaries Expense 120
Salaries Payable 120
   
On February​ 1, Charlie Woods Law Firm contracted to provide$9,000 of legal services for the next five months
and received $9,000 cash from the client. Assuming Woods records deferred revenues using the alternative​ treatment,
what would be the adjusting entry recorded on February​ 28?
 
Service Revenue 7,200
Unearned Revenue 7,200
   
On August 31 of the current year, the assets and liabilities of Gladstone, Incorporated are as follows:
 
Cash                 $          31,500
Supplies,                      730
Equipment,                  11,100
Accounts Payable,       9,900
 
$33,430
 
31,500 + 730 + 11,100 − 9,900 = $33,430
   
On December 1, Orenthal Marketing Company received $6,600 from a customer for a 2-month marketing plan to be completed January 31
of the following year. The cash receipt was recorded as unearned revenue.
The adjusting entry for the year ended December 31 would include:
 
$3,300
 
$6,600/2 = $3,300
   
Zapper has beginning equity of $259,000, net income of $52,000, dividends paid of $41,000 and stockholder investments of $7,000.
Its ending total equity as reported on the balance sheet is:
 
$277,000
 
259,000 + 7,000 + 52,000 − 41,000 = $277,000
   
On May 31, the Cash account of Tesla had a normal balance of $5,900. During May,
the account was debited for a total of $13,100 and credited for a total of $12,400.
What was the balance in the Cash account at the beginning of May?
 
$5,200
 
13,100 − 12,400 = $5,900 – 700 = 5,200
   
A company's balance sheet shows:
 
cash                           $                      38,000
accounts receivable                      24,000
office equipment                            58,000
accounts payable                            25,000.
 
$95,000
 
38,000 + 24,000 + 58,000 + 25,000 = 120,000 - 25,000 = 95,000
   
Matthew Martin, the owner of Innovation Consulting, started the business by investing $54,000 cash in exchange for common stock.
Identify the general journal entry below that Innovation Consulting will make to record the transaction.
Account Title. Debit. Credit
Cash 54,000
Common Stock 54,000
   
On January 1, Eastern College received $1,220,000 from its students for the spring semester that it recorded in Unearned Revenue.
The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term.
Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28?
 
$305,000
 
$1,220,000 / 4 = $305,000
   
Green Cleaning purchased $610 of office supplies on credit.
The company's policy is to initially record prepaid and unearned items in balance sheet accounts.
Which of the following general journal entries will Green Cleaning make to record this transaction?
 
Debit Office supplies, $610
credit Accounts payable, $610.
   
A company had no office supplies available at the beginning of the year.
During the year, the company purchased $310 worth of office supplies. On December 31, $95 worth of office supplies remained.
How much should the company report as office supplies expense for the year?
 
$215
 
$310 − $95 = $215
   
During the month of March, Harley's Computer Services made purchases on account totaling $45,300.
Also during the month of March, Harley was paid $10,700 by a customer for services to be provided in the future and paid $37,800
of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $78,200,
what is the balance in accounts payable at the end of March?
 
$85,700
 
Beginning Accounts Payable Balance + Purchases on Account − Payments on Accounts = Ending Accounts Payable Balance
$78,200 + $45,300 − $37,800 = Ending Accounts Payable Balance Ending Accounts Payable = $85,700
   
A company pays its employees $3,850 each Friday, which amounts to $770 per day for the five-day work week that begins on Monday.
If the monthly accounting period ends on Thursday and the employees worked through Thursday,
the amount of salaries earned but unpaid at the end of the accounting period is:
 
$3,080
 
4 days × $770 / day = $3,080
   
A law firm billed a client $1,900 for work performed in the current month.
Which of the following general journal entries will the firm make to record this transaction?
 
Debit Accounts Receivable $1,900
credit Legal Fees Revenue, $1,900.
   
Victor Cruz contributed $79,000 in cash and land worth $148,000 to open a new business, VC Consulting,
in exchange for common stock. Which of the following general journal entries will VC Consulting make to record this transaction?
 
Debit Cash $79,000
Debit Land $148,000
Credit Common Stock, $227,000
 
During the month of February, Rubio Services had cash receipts of $8,000 and cash disbursements of $9,600.
The February 28 cash balance was $2,800. What was the February 1 beginning cash balance?
 
$4,400
 
9,600 - 8,000 = 1,600
1,600 + 2,800 = 4,400
   
The Retained earnings account has a credit balance of $49,000 before closing entries are made.
Total revenues for the period are $67,200, total expenses are $45,800, and dividends are $13,800.
What is the correct closing entry for the expense accounts?
 
Debit Income Summary $45,800
Credit Expense accounts $45,800.
   
The group that sets international preferred accounting practices is called the:
 
IASB.
   
the most common period
 
monthly
   
When do internal auditors usually audit a company
 
twice a year
   
When do external auditors usually audit a company
 
once a year
   
Cash-basis
 
(not GAAP) companies record revenue and expenses when they receive cash
   
Accrual-basis
 
(GAAP) companies recognize revenues when they perform services and recognize expenses when incurred.
   
Deferrals
 
Recorded costs must be allocated between two or more accounting periods
   
Deferrals
 
Recorded unearned revenues must be allocated between two or more accounting periods
   
Accrued
 
Unrecorded expenses exist
   
Straight-line depreciation
 
asset costs - salvage value / useful life
   
Who determines the fiscal year for a company
 
accountants or owners
   
When is revenue recognized?
 
When cash is received or payment has been made
   
Expense recognition principle (matching principle)
 
the principle that companies match expenses with revenues
   
An adjusting entry affects which financials
 
Usually affects one income statement and one balance sheet account (asset or liability account)
   
Why do accounts need to be adjusted?
 
An adjusting entry is recorded to bring an asset or liability account balance to its proper amount.
   
Depreciation expense
 
is allocating the cost of a tangible asset over its useful life
   
Accumulated depreciation
 
contra asset
   
Book value
 
the difference between the cost of a depreciable asset and its related accumulated depreciation
   
What is the name of the document used to update adjusting entries?
 
worksheet
   
The net income or loss from the I/S carries immediately to which financial statements?
 
retained earnings
   
The ending retained earnings carries immediately to which financial statement?
 
balance sheet
   
Which account is not considered a temporary account?
 
Assets
   
Which account is not closed out to retained earnings?
 
Assets
   
Which accounts are not located on the T/B after the post closing trial balance completed?
 
Revenues
   
What is the fifth step in the accounting cycle?
 
Adjust

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2