Chapter 4 LearnSmart Intro to Financial Accounting

Step taken at the end of the accounting period to complete the financial statement

Prepare the adjusting entries Prepare an adjusted trial balance Prepare the financial statements

which of the following transactions constitute an accrual adjustment involving an expense account?

wages incurred but not yet paid to employees as of the end of the accounting period Taxes incurred but not yet paid to the government as of the end of the accounting period

if an asset account such as equipment has a normal debit balance, the associated contra-account should have a normal ______ balance

credit

the adjusting entry to record depreciation on equipment includes a

credit to accumulated depreciation debit to depreciation expense

the entry to record income tax accrued, but unpaid at the end of the accounting period includes both

debit to income tax expense credit to income tax payable

as the balance in the accumulated depreciation increases, total assets______ because accumulated depreciation is a ______-acount

decrease contra

the adjusting entry to record supplies used during the period will result in

decrease to supplies and an increase to supplies expense

the accounts receivable account should be ___when adjusting at the end of the period for any revenues that have been earned but not yet collected or recorded

debit

Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?

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

Taggert Company paid $1800 for a 6 month insurance premium on September 1. Which of the following statements are correct regarding the accounting for this insurance over the 6 month period?

Taggert will credit Prepaid Insurance for $300 on Sept 30 Taggert will debit insurance expense for $300 on Sept 30 Taggert will debit Prepaid Insurance for $1,800 on Sept 1

What are the effects on the accounting equation from the adjustment for revenue earned during the accounting period that had previously been recorded as liability?

Total liabilities will decrease and total stockholders' equity will increase

a prepayment that is originally recorded as an asset will be

allocated to future accounting periods based on the value of the benefit used during the period

A prepayment that is originally recorded as an asset will be

allocated to the future accounting periods based on the value of the benefit used during the period

adjustments ensure that ____ balances are reported at amounts representing the economic benefits that remain at the end of the period and will be used-up in future periods.

assets

as of december 31 the end of the accounting period, $700 of salaries and wages owed to employees have been incurred but not paid.The employees will be paid on January 5. ON december 31 salaries and wages will_____ by 700 and salaries and wages_____ will increase by $700

increase Expense

as of december 31 abc company has a profit before tax $12000. The company's tax rate is 25%. The adjustment will include

increase 3000

Typically increase as a result of adjusting entries

supplies expense interest payable