Accounting 101

When should the accounts receivable account be increased?

When adjusting at the end of the period for any revenues from fulfilling obligations to buyers which have not yet been collected or recorded

The adjusting entry a company would record for the amount of wages incurred but not yet paid will cause...

an increase in liabilities decrease stockholders equity

Interest

Cost of borrowing money

Interest expense is...

Accrued each period the notes payable is unpaid

A debit to an expense and a credit to liability

Accruing for services received that have not yet been paid

What adjusting entry will cause assets and stockholders equity to increase?

Adjusting for services provided but cash not yet collected

Company AWZ purchased app software that is estimated to have 4 years of usefulness. The adjusting entry that the amortization should include...

Debit to amortization expense and credit to accumulated amortization

What is interest classified as?

Expense account under stockholders equity

The adjusting entry to record interest owed in obligations at the end of the accounting period includes a debit to...

Interest expense and credit to interest payable

The adjustment for salaries and wages accrued but not paid at the end of the accounting period

Salaries and wage expense will increase by the amount of the unpaid salaries and wages

What will be the effect on accounts hen the salaries and wages that were incurred and recorded in the prior accounting period are finally paid?

Salaries and wages payable will decrease and cash will decrease

Describe the purpose of closing entries

To establish zero balances in the income statement and dividend accounts and to transfer net income and dividends into retained earnings

What are the effects on the accounting equation from the adjustment for which the seller has satisfied the performance obligations to it buyers during the accounting period that had previously been recorded as a liability?

Total liabilities will decrease and stockholders equity will increase

An adjusting entry to record the revenue earned by the seller fulfilling its obligation results in a...

decrease to the deferred revenue account

After adjustments have been completed, what does the adjusted balance in income tax payable represent?

the amount owed to the government at the end of the accounting period