Chapter 4 Accounting 2010 practice with book
which of the following entries records the adjustment to revenue for which the seller has performed its obligations but has not yet been collected or billed
debit accounts receivable and credit sales revenue
the adjusting entry to record the supplies used during the period will result in
decrease to supplies and an increase in supplies expense
adjustments help to ensure that all _________ are recorded in the period in which they are incurred.
expenses
adjustment to record interest accrued on a note payable
interest on the note payable is classified as an expense since it is the cost of borrowing
adjustments ensure that liabilities are reported as all amounts __________ at the end of the accounting period.
owed
defer means to
postpone
What are the effects on the accounting equation from the adjustment for which the seller has satisfied the performance obligation to its buyers during the accounting period that had previously been recorded as a liability.
total liabilities will decrease and total SE will increase.
after adjustments have been completed, the balance in the salaries and wages expense account represents the
total salaries and wages, paid and unpaid, that have been incurred during the accounting period
the adjusting entry to record wages incurred but not yet recorded includes a credit to
wages payable
increase revenue that had been delivered during period
deferral
collects cash in advance that will be delivered at a later date
deferred revenue
adjustments made to the expense accounts at the end of the accounting period adhere to the _______ recognition principle.
expense
the accounts receivable account should be ________ when adjusting at the end of the period for any revenues from fulfilling obligations to buyers for which it has not been collected or recorded.
increased
On June 30th, Dailey Kneads paid 12,000 in advance for one year of insurance coverage beginning July 1st. What would the insurance expense be and what would the prepaid insurance be.
insurance expense: 1,000 on the income statement prepaid insurance: 11,000 on the balance sheet
as of december 31, 2500 of interest expense has accrued on a 50,000 notes payable. the note payable and the accrued interest will become due and payable next year. How will the interest affect the adjustment at the end of the period
interest expense should be increased, because the cost of the interest relates to the current period
on november 30th, a company borrowed 1,000 by issuing a one year note with interest and principal due at the end of the 1 year period. the interest on the note should be expensed
over the months the note is unpaid
what is correct about the income tax payable account
requires income tax expense liability account represents income tax incurred, but not yet paid to the company
closing entries move the balances from the _________ accounts into the retained earnings account.
temporary
what are the effects on the financial condition of the business from the adjustment for revenues from the seller fulfilling its obligations that have not yet been collected
total assets will increase and total SE will increase
the adjusting entry for income taxes records income tax that is incurred and ________ by the company.
owed
what constitutes an accrual adjustment involving an expense account
=wages incurred but not yet paid to employees as off the end of the accounting period =taxes incurred but not yet paid to the government as off the end of the accounting period.
what is an example of deferral adjustment
debit supplies expense, and credit supplies
as of december 31, the end of the accounting period, 700 of salaries and wages owed to employees have been incurred but not yet paid. the employees will be paid on January 5. On december 31, salaries and wages payable will _______ by 700 and salaries and wages _________ will increase by 700.
increase, expense
a prepayment that is originally recorded as an asset will be
allocated to future accounting periods based on the value of benefit used during the period
accounts payable
amount owed for supplies purchased on account
supplies
amount reported and remaining on the balance sheet
supplies expense
amount used and reported on income statement
accrual adjustments will increase balance sheet accounts for
amounts when the seller performs its obligations or incurred but not yet collected or paid
at the end of the accounting period, a company has a profit before tax of 12,000. the tax rate is 25%. the adjustment will include
an increase of 3,000 to income tax expense
the accrual adjustment recorded to adjust for revenues not yet collected will cause
assets to increase
accural adjustments include either a debit to an ________ account and credit to a ________ account. Deferral adjustments include a debit to a liability account and a credit to ________ account OR debit to an _______ account and a credit to an asset account.
-expense -revenue -revenue -expense
which of the following may require an accrual adjusting entry that is recorded with a debit to an expense and a credit to a liability
-utilities to be paid in later accounting period -interest owed on notes payable
financial statement preparation process in order
1. prepare adjusting entries 2. prepare an adjusted trial balance 3. prepare the financial statements
causes assets and SE to increase. adjusting services provided
but not yet collected (accrual)
the entry to record the income tax accrued, but unpaid, at the end of the accounting period includes both a
credit to income tax payable debit to income tax expense
the adjusting entry to record depreciation, includes a debit to _______ and a credit to ______________.
Depreciation Expense Accumulated Depreciation
what are the effects on the accounting equation from the adjustment for salaries and wages incurred, but not yet paid, during the accounting period
Total liabilities will increase and SE will decrease
after posting the adjusting entry to record revenues for which the seller has performed of its obligations but has not yet collected, which account will be increased
accounts receivable
which of the following adjusting entries are recorded with a debit to an expense and a credit to a liability
accruing for services received that have not yet been paid
when are adjusting entries recorded
at the end of the accounting period, prior to the preparation of financial statements