Question 1

Match the type of account (a through e) with the business transactions that follow.
-A contract to provide tutoring services beginning next month was signed.

Accepted Answer

The transaction is a contract for future services and does not involve any immediate financial transaction or recognition of revenue or expense.

Question 2

Listed below are accounts to use for transactions 
(a) through 
(j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number (s) in the appropriate box.?  ?

Accepted Answer

The answer of Listed below are accounts to use for...

Question 3

Explain the difference between the accrual basis of accounting and the cash basis of accounting.

Accepted Answer

The answer of Explain the difference between the accrual basis...

Question 4

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-No adjustment was made for supplies used up during the month.

Accepted Answer

Not adjusting for supplies used up during the month means the supplies asset account remains higher than it should be, overstating assets. Since expenses are understated, net income is overstated, leading to an overstatement of owner's equity.

Question 5

Match the type of account (a through e) with the business transactions that follow.
-Received six months of rental payments from a tenant.

Accepted Answer

Receiving rental payments in advance is considered unearned revenue because the service (providing rental space) has not yet been provided for the entire period paid for. The company owes the service for the future months.

Question 6

For each of the following, journalize the necessary adjusting entry:
(a)A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that the fiscal period ends 
(1) on Tuesday or 
(2) on Wednesday.
(b)The balance in the prepaid insurance account before adjustment at the end of the year is $18,000. Journalize the adjusting entry required under each of the following alternatives: 
(1) the amount of insurance expired during the year is $5,300 or 
(2) the amount of unexpired insurance applicable to a future period is $2,700.
(c)On July 1 of the current year, a business pays $54,000 to the city for license taxes for the coming fiscal year. The same business is also required to pay an annual property tax at the end of the year. The estimated amount of the current year's property tax allocated to July is $4,800. 
(1) Journalize the two adjusting entries required to bring the accounts affected by the taxes up to date as of July 31. 
(2) What is the amount of tax expense for July?
(d)The estimated depreciation on equipment for the year is $32,000.

Accepted Answer

The answer of For each of the following, journalize the...

Question 7

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry.1. Cash2. Prepaid Expenses3. Depreciation Expense4. Accounts Payable5. Accumulated Depreciation6. Equipment

Accepted Answer

The answer of Indicate with a Yes or No whether...

Question 8

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Services provided to customers on the last day of the month were not billed.

Accepted Answer

Not billing for services provided results in not recognizing revenue earned, which understates assets (accounts receivable) and owner's equity (retained earnings or owner's capital) because the income that would increase both is not recorded.

Question 9

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-An attorney has earned half of a retainer fee that was received and recorded last month. No adjustment was recorded for the amount earned.

Accepted Answer

The liability (unearned revenue) is overstated because the attorney has earned part of the fee, and the owner's equity is understated because the revenue earned has not been recognized.

Question 10

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Interest earned on a note receivable was not recorded.

Accepted Answer

By not recording the interest earned on a note receivable, both the asset (note receivable) and owner's equity (interest revenue) will be understated. This will result in an understated total assets and owner's equity on the balance sheet.

Question 11

Match the type of account (a through e) with the business transactions that follow.
-Paid six months of rental payments to the landlord.

Accepted Answer

Prepaid expense - Because the payment was made in advance for the rental payments, it is considered a prepaid expense.

Question 12

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Depreciation on equipment was not recorded.

Accepted Answer

Depreciation expense reduces the book value of assets (equipment, in this case) and decreases net income, which in turn reduces owner's equity. If depreciation is not recorded, both assets and owner's equity would be overstated because the expense that should reduce them is not recognized.

Question 13

Under the accrual basis, some accounts in the ledger require updating at the end of the period. Discuss the three main reasons for this updating and give an example of each.

Accepted Answer

The answer of Under the accrual basis, some accounts in...

Question 14

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Wages are paid every Friday for the five-day workweek. The month ended on Monday and no adjustment was recorded.

Accepted Answer

The omission of recording wages payable for the last day of the month results in liabilities being understated because the company owes wages for that day. Consequently, owner's equity is overstated because expenses are understated, leading to an overstatement of net income and retained earnings.

Question 15

Match the type of account (a through e) with the business transactions that follow.
-Annual depreciation on equipment, recorded on a monthly basis.

Accepted Answer

The answer of Match the type of account (a through...

Question 16

Classify the following items as: 
(1) prepaid expense, 
(2) unearned revenue, 
(3) accrued expense, or 
(4) accrued revenue.​a) Fees received but not yet earnedb) Fees earned but not yet receivedc) Paid premium on a one-year insurance policyd) Property tax owed to be paid beginning of next year

Accepted Answer

The answer of Classify the following items as: 
(1) prepaid...

Question 17

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-A tenant paid six months' rent in advance when he moved in on the first day of the month. No entry was made on the last day of the month.

Accepted Answer

The omission of the entry would result in liabilities being overstated because the unearned rent revenue (a liability) was not adjusted. Owner's equity would be understated because the revenue earned for the month was not recognized, which affects net income and thus owner's equity.

Question 18

(a) Explain the differences between accrued revenues and unearned revenues.
(b) Explain the differences between accrued expenses and prepaid expenses.
(c) Give an example of each.

Accepted Answer

The answer of (a) Explain the differences between accrued revenues...

Question 19

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.

Accepted Answer

The answer of Identify the effect (a through h) that...

Question 20

List the four basic types of accounts that require adjusting entries and give an example of each.

Accepted Answer

The answer of List the four basic types of accounts...

Quiz 3: The Adjusting Process

Match the type of account (a through e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed.

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number (s) in the appropriate box.? ?

Explain the difference between the accrual basis of accounting and the cash basis of accounting.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -No adjustment was made for supplies used up during the month.

Match the type of account (a through e) with the business transactions that follow. -Received six months of rental payments from a tenant.

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry.1. Cash2. Prepaid Expenses3. Depreciation Expense4. Accounts Payable5. Accumulated Depreciation6. Equipment

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Services provided to customers on the last day of the month were not billed.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -An attorney has earned half of a retainer fee that was received and recorded last month. No adjustment was recorded for the amount earned.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Interest earned on a note receivable was not recorded.

Match the type of account (a through e) with the business transactions that follow. -Paid six months of rental payments to the landlord.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Depreciation on equipment was not recorded.

Under the accrual basis, some accounts in the ledger require updating at the end of the period. Discuss the three main reasons for this updating and give an example of each.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Wages are paid every Friday for the five-day workweek. The month ended on Monday and no adjustment was recorded.

Match the type of account (a through e) with the business transactions that follow. -Annual depreciation on equipment, recorded on a monthly basis.

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.a) Fees received but not yet earnedb) Fees earned but not yet receivedc) Paid premium on a one-year insurance policyd) Property tax owed to be paid beginning of next year

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -A tenant paid six months' rent in advance when he moved in on the first day of the month. No entry was made on the last day of the month.

(a) Explain the differences between accrued revenues and unearned revenues. (b) Explain the differences between accrued expenses and prepaid expenses. (c) Give an example of each.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.

List the four basic types of accounts that require adjusting entries and give an example of each.

Quiz 3: The Adjusting Process

Match the type of account (a through e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed.

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number (s) in the appropriate box.? ?

Explain the difference between the accrual basis of accounting and the cash basis of accounting.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -No adjustment was made for supplies used up during the month.

Match the type of account (a through e) with the business transactions that follow. -Received six months of rental payments from a tenant.

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry.1. Cash2. Prepaid Expenses3. Depreciation Expense4. Accounts Payable5. Accumulated Depreciation6. Equipment

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Services provided to customers on the last day of the month were not billed.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -An attorney has earned half of a retainer fee that was received and recorded last month. No adjustment was recorded for the amount earned.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Interest earned on a note receivable was not recorded.

Match the type of account (a through e) with the business transactions that follow. -Paid six months of rental payments to the landlord.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Depreciation on equipment was not recorded.

Under the accrual basis, some accounts in the ledger require updating at the end of the period. Discuss the three main reasons for this updating and give an example of each.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Wages are paid every Friday for the five-day workweek. The month ended on Monday and no adjustment was recorded.

Match the type of account (a through e) with the business transactions that follow. -Annual depreciation on equipment, recorded on a monthly basis.

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.​a) Fees received but not yet earnedb) Fees earned but not yet receivedc) Paid premium on a one-year insurance policyd) Property tax owed to be paid beginning of next year

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -A tenant paid six months' rent in advance when he moved in on the first day of the month. No entry was made on the last day of the month.

(a) Explain the differences between accrued revenues and unearned revenues. (b) Explain the differences between accrued expenses and prepaid expenses. (c) Give an example of each.

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet. -Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.

List the four basic types of accounts that require adjusting entries and give an example of each.

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.a) Fees received but not yet earnedb) Fees earned but not yet receivedc) Paid premium on a one-year insurance policyd) Property tax owed to be paid beginning of next year