ACG Chpt 4 Questions

Which two accounts are used to record the adjusting entry for the amortization of long-term assets that lack physical substance?

-Amortization Expense -Accumulated Amortization

Place the steps in the adjustment process in order.

1. Analyze the accounts to determine the amount of the adjustment. 2. Record the adjusting entry in the journal. 3. Summarize the adjusting entries in the accounts.

At the end of the accounting period, adjusting entries are required. Place the steps in the adjustment process in the correct order.

1. Use the unadjusted trial balance to determine the accounts requiring adjustment 2. Record and post entries 3. Prepare and adjusted trial balance to check the equality of the debts and credits 4. Prepare financial statements 5. record closing journal entries and post to the accounts 6. Prepare a post-closing trial blance

The annual depreciation taken on a vehicle totals $3,000. The vehicle has been in service for 3 full years and the adjusting entries have been completed for the year. At the end of the 3rd year, the annual financial statements will report Depreciation expense equal to $____ and accumulated depreciation equal to $____

3000 ; 9000

how does the timing of adjusting entries differ from the accounting for daily transactions?

Adjustments are made at the end of the accounting period because making them on a daily basis would be inefficient

The adjusting entry for supplies used during the period requires a ____ to supplies and a ____ to supplies expense

Credit ; Debt

The deferral adjustment to record the amount of unearned service revenue that is now earned includes a ______.

Credit to service revenue debit to unearned revenue

Adjusting entries are made at the ____ of the accounting period, while daily transactions are made throughout the accounting period

End

The Adjusting entry to record interest owed on obligations at the end of the accounting period includes a debt to "interest ____" and a credit to "Interest ____"

Expense ; Payable

Temporary accounts include ____, ____, and ____. These accounts only track the current period's results.

Expenses Revenues Dividends

____ expense accumulates or accrues throughout the accounting period on notes payable

Interest

which of the following line items are found on a statement of retained earnings

Net income dividends

the adjusting entry to record income taxes records income tax that is incurred and ____ by the company

Owed

Which of the following Transactions constitute an accrual adjustment involving an revenue account?

Revenue earned, but not yet collected, for interest on a note receivable.

Which of the following accounts found on an unadjusted balance typically require adjusting entries?

Supplies Interest Payable Prepaid Rent

Taggert Company paid $1,800 for a 6-month insurance premium on September 1. Which of the following statements are correct regarding the accounting for this insurance over the six-month period? (Check all that apply.)

Taggert will debit Insurance Expense for $300 on Sept. 30. Taggert will credit Prepaid Insurance for $300 on Sept. 30. Taggert will debit Prepaid Insurance for $1,800 on Sept.1.

How does the adjustment for depreciation differ from other defferal adjustments?

The depreciation adjustment uses a contra-asset account rather than reducing the asset accounts directly.

the adjusting entry to record services earned but not yet billed requires

a debt to accounts receivable and credit to service revenue

after the adjustments have been recorded, the adjustment balance in the prepaid rent account represents the

amount of the prepayment that remains towards future rental periods

in recording an accrual adjustment to account for revenues earned but not yet collected,

an asset is increased since cash will be collected at a later date

the adjusting entry to record depreciation on equipment includes a

credit to accumulated depreciation debt to depreciation expense

Recognizing that Wages Payable (resulting from adjustments at the end of the period) will be paid in a future period, what will be the effect on the accounts when when the wages are paid?

Wages Payable will decrease and Cash will decrease

which of the following entries records the adjustment for income tax accrued, but not yet paid?

debit income tax expense and credit income tax payable

Supplies should be ____ and Supplies expense should be ____ for supplies used during the period

decreased ; increased

Unearned revenue to reduce and revenue increased for the amount of revenue ____ during the period

earned

The ____ recognition principle requires an adjustment for income tax expense owed attributable to the net income earned during the current period

expense

What are the effects on the accounting equation from the adjustment for wages incurred, but not yet paid, during the accounting period?

total assets will increase and total stockholder's equity will increase

The adjusting entry to record the supplies used during the period will result in a(n)

decrease to supplies and an increase to supplies expense

As of December 31, the un-adjusted balance in unearned revenue contains $5,600 for un-redeemed gift cards. An analysis of the monthly sales indicates that $3,200 gift cards were redeemed during the month but not yet recorded. How will these transactions affect the adjustments at the end of the period?

Unearned Revenue needs to be decreased by the amount of gift cards redeemed during the month. Sales Revenue needs to be increased by the amount of gift cards redeemed during the month.