Question 1

______________________ accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid.______________________ accounting means that the economic effects of revenues and expenses are recorded when earned or incurred.

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Question 2

Prepare a balance sheet from the adjusted trial balance above.

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Question 3

Prepare a statement of changes in equity from the adjusted trial balance above.Mr.Clausen's capital account balance of $30,520 consists of a $20,520 balance on January 1,2015,plus an additional $10,000 investment during 2015.

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Question 4

The ________________________________ method allocates equal amounts of an asset's cost to depreciation during its useful life.

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Question 5

Sharp Massage Co.unadjusted trial balance is as follows:  Use the following information to prepare any adjusting entries required:

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Question 6

Adjusting entries are required at the end of the accounting period because ____________________________________________.

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Question 7

To correct the error in debiting use of supplies to Depreciation Expense

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Question 8

Discuss the two alternate methods used to account for prepaid expenses.

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Question 9

To correct the error in debiting a truck purchase to Trucking Expense.

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Question 10

Given the schedule below,indicate the impact of the following errors made during the adjusting entry process.Use a "+" followed by the amount for overstatements,a "-" followed by the amount for understatements,and a "0" for no effect.
(1)Recorded accrued salaries expense of $1,200 with a debit to Prepaid Salaries.
(2)The bookkeeper forgot to record $2,700 of depreciation on office equipment.
(3)Failed to accrue $300 of interest on a note receivable.
Ex.Failed to recognize that $600 of unearned revenues,previously recorded as liabilities,had been earned by year-end.

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Question 11

Prepaid expenses,depreciation,and unearned revenues each reflect transactions where cash is received or paid ______________ a related expense or revenue is recognized.

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Question 12

Identify and explain the reasons for the order in which financial statements are prepared.

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Question 13

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their ________________________.

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Question 14

The Surrey Service Company issued financial statements for last year,but failed to include the following adjusting entries:
(A)Accrued service fees earned of $2,300.
(B)Depreciation expense of $5,000.
(C)Office supplies used,$2,100.
(D)Accrued salaries of $3,400.
(E)Revenues of $4,600,originally recorded as unearned,but earned by the end of the year.
Determine the correct amounts for last year's financial statements by completing the following schedule:

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The answer of The Surrey Service Company issued financial statements...

Question 15

On December 31,2015,the accountant for a proprietorship forgot to record $7,000 of depreciation on office equipment.In the 2015 financial statements,what is the effect of this error on assets,net income,and equity?

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Question 16

Before adjustment,a prepaid expense account would contain an asset amount that is ___________________ and an expense amount that is ___________________.

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Question 17

Using the schedule below,indicate the impact of the following errors made during the adjusting entry process.Use a "+" for overstatements,a "-" for understatements,and a "0" for no effect.

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Question 18

For the current year,the net income of Alpha and Omega was incorrectly calculated as $547,715 for the year ended December 31.You are called in as the accountant to determine the correct net income.After examination of the accounts,you find the following errors:  Calculate the correct net income for this year.

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Question 19

Discuss the purpose of an adjusted trial balance.

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Question 20

Explain how accounting adjustments affect financial statements.

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Quiz 3: Adjusting Accounts for Financial Statements

accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid. accounting means that the economic effects of revenues and expenses are recorded when earned or incurred.