Question 1

(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 and...

Question 2

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 expense,
(2)unearned...

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

Match the type of account (a through e) with the business transactions that follow.
-Paid six months of rental payments to the landlord.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these choices

Accepted Answer

Prepaid expense account is used when a company pays for an expense in advance. In this case, paying six months of rental payments in advance would be recorded in a prepaid expense account.

Question 5

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

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 6

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.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these choices

Accepted Answer

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

Question 7

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Accepted Answer

Not billing for services provided would result in both assets (accounts receivable) and owner's equity (revenue) being understated, as the company would not recognize the revenue earned nor the corresponding receivable from the customer.

Question 8

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 9

Match the type of account (a through e) with the business transactions that follow.
-Annual depreciation on equipment,recorded on a monthly basis.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these choices

Accepted Answer

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

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Accepted Answer

Not recording interest earned on a note receivable would result in assets (due to the unrecorded interest income) and owner's equity (due to the unrecorded increase in net income from the interest) being understated.

Question 11

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Accepted Answer

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

Question 12

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 the...

Question 13

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...

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Accepted Answer

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

Question 15

REM Consulting is completing the accounting information processing at the end of the fiscal year,December 31.The following trial balances are available.​​  ​
(a) Reconstruct the adjusting entries and give a brief explanation of each.
(b) What is the amount of net income?

Accepted Answer

The answer of REM Consulting is completing the accounting information...

Question 16

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Accepted Answer

Depreciation expense reduces the book value of assets (specifically, the equipment in this case) and also reduces 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 17

For each of the following,journalize the necessary adjusting entry:

Accepted Answer

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

Question 18

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.
A)Assets and owner's equity overstated
B)Assets and owner's equity understated
C)Assets overstated and owner's equity understated
D)Assets understated and owner's equity overstated
E)Liabilities and owner's equity overstated
F)Liabilities and owner's equity understated
G)Liabilities overstated and owner's equity understated
H)Liabilities understated and owner's equity overstated

Accepted Answer

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

Question 19

Match the type of account (a through e) with the business transactions that follow.
-Received six months of rental payments from a tenant.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these choices

Accepted Answer

When a business receives payment in advance for services or goods that are to be provided in the future, it is recorded as unearned revenue. In this case, receiving six months of rental payments in advance from a tenant is an example of unearned revenue, as the service (use of the property) has not yet been provided for the entire period paid for.

Question 20

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...

Quiz 3: The Adjusting Process

(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.

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

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

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. -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. -A contract to provide tutoring services beginning next month was signed.

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.

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.

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

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.

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.

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.

List the four basic types of accounts that require adjusting entries 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.

REM Consulting is completing the accounting information processing at the end of the fiscal year,December 31.The following trial balances are available. (a) Reconstruct the adjusting entries and give a brief explanation of each. (b) What is the amount of net income?

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.

For each of the following,journalize the necessary adjusting entry:

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.

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

Quiz 3: The Adjusting Process

(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.

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

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

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. -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. -A contract to provide tutoring services beginning next month was signed.

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.

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.​ ​

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

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.

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.

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.

List the four basic types of accounts that require adjusting entries 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.

REM Consulting is completing the accounting information processing at the end of the fiscal year,December 31.The following trial balances are available.​​ ​ (a) Reconstruct the adjusting entries and give a brief explanation of each. (b) What is the amount of net income?

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.

For each of the following,journalize the necessary adjusting entry:

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.

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

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

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.

REM Consulting is completing the accounting information processing at the end of the fiscal year,December 31.The following trial balances are available. (a) Reconstruct the adjusting entries and give a brief explanation of each. (b) What is the amount of net income?