Accounting Module 3

After posting all entries to the ledger, the Accounts Payable T-account will show which of the following? (Select all that apply.)

-Purchases on account on the credit side. -Payments made on the debit side. -Beginning balance on the top of the credit side. -Ending balance on the bottom of the credit side.

Able Company purchased $25,000 worth of equipment for $5,000 cash and a $20,000, 5-year note payable. The journal entry to record this transaction would include a _______. (Select all that apply.)

-credit to Cash of $5,000 -debit to Equipment of $25,000 -credit to Notes Payable of $20,000

Which statement is false?

A trial balance is the same as a balance sheet.

The adjusting entry to record revenue earned but not yet billed to customers includes a credit to

Revenue

Which of the following adjusting entries represent deferral adjustments that adjust for amounts expired or used during the period? (Select all that apply.)

debit Supplies Expense and credit Supplies debit Insurance Expense and credit Prepaid Insurance

Credits

Liabilities, stock, and revenue

A company started the year with $400 of supplies. During the year, the company purchased an additional $1,200 of supplies on account of which it paid $1,000. There were $700 of supplies on hand at the end of the year. An adjusting entry prepared at the end of the account period includes a _______.

debit to Supplies Expense for $900

The entry to close expense accounts does what

Decreases retained earnings

The debit side of the retained earnings accounts will include which of the following after recording closing entries

Dividend and expenses

The debit side of the Retained Earnings T-Account will include which of the following after recording the closing entries? (Select all that apply.)

Expenses for the month Dividends for the month

On November 1, Year 1, Pitts' Pits, Inc., paid $56,000 for a 4-month insurance policy beginning on that date. Prepaid Insurance at December 31, Year 1 equals ______.

28,000

Debits

Assets, expenses, and dividens

Lox, Stock & Bagel, Inc. bought machinery at a cost of $303,000 on January 1, Year 1. It plans to dispose of the machinery after 10 years of use. Depreciation Expense for the year ended December 31, Year 2 equals ______.

Correct 30,300

Accumulated Depreciation is typically a _____

Credit

Service Revenue is typically a ____

Credit

Unearned Revenue is a ____

Credit

Record the entry to close revenues for the period by selecting the correct accounts from below. (Select all that apply.)

Credit Retained Earnings Debit Revenues

If you debit UR you ____ ___

Credit revenue

The normal balance of Notes Payable is a ______ because it is a(n) ______.

Credit, liability

Dividends

Debit

Interest Expense is a-

Debit

Inventory

Debit

On May 31, Squid Roe, Inc., recorded the adjusting entry to recognize $800 of revenues earned but not yet billed.

Debit AR 800 Credit Sales Revenue 800

Doolittle & Dalley, Inc., collected $400 owed from customers for services previously recorded

Debit Cash Credit Accounts Receivable

On May 31 Squid Roe, Inc., recorded the adjusting entry of $500 for wages owed to employees that will be paid in June, the next accounting period. DO NOT INCLUDE $ SIGNS IN YOUR ANSWER.

Debit Wages Expense 500 Credit Wages Payable 500

The adjusting entry to record depreciation on equipment includes a ______. (Select all that apply.)

Debit to Depreciation Expense Credit to Accumulated Depreciation

The normal balance of Prepaid Insurance is a ______ because it is a(n) ______.

Debit, asset

What is a good starting point for determining which accounts require adjustment

Unadjusted trial balance

A major purpose of preparing closing entries is to _______.

Update Retained Earnings

What do adjusted entries do

Update accounts to their proper balances, needed in order to measure the periods net income or loss