Accounting

A calendar year-end reporting period is defined as a ____ month period which ends on _____.

12, December

What is a plant asset?

A plant asset refers to a long-term tangible asset used to produce and sell products or services.

Which of the statements below is correct regarding the difference between a temporary account and a permanent account?

A temporary account will not appear on a post-closing trial balance.

Describe an unclassified balance sheet.

An unclassified balance sheet is one whose items are broadly grouped into assets, liabilities, and equity.

A company borrowed $4,000 from the bank at an interest rate of 9%. By the end of the accounting period, the loan had been outstanding for 30 days. Demonstrate the required adjusting entry by choosing the correct statement below.

Debit Interest expense for $30.

An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $400 had been earned. Demonstrate the December 31 adjusting entry by choosing the correct statement below.

Debit Unearned revenues for $400.

Chimney Sweeps provided chimney cleaning services to several clients during the month of February. Chimney's customers have not yet been billed. Chimney's customers owe $2,000 to Chimney. How will Chimney Sweeps record this transaction?

Debit accounts receivable and credit services revenue

Explain the difference between the unadjusted and the adjusted trial balance.

The adjusted trial balance is prepared after adjusting entries have been recorded and posted.

Describe the final step in the adjusting process.

The final step is to create an adjusting journal entry to get from step 1 to step 2.

All of the following are on an unclassified balance sheet

Total liabilities Total assets

Identify which group of accounts may require adjustments at the end of the accounting period.

Unearned revenue; Supplies; Prepaid rent

For the current year, Bubbles Office Supply had earned $600 of interest on investments. As of December 31, none of this interest had been received or recorded. Demonstrate the required half of the adjusting entry by choosing the correct statement below.

Debit Interest receivable for $600.

By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. Which of the following is the proper adjusting entry?

Debit Salaries expense for $500.

A plant asset can be defined by which of the following statements? (Check all that apply.)

It has a life within the business greater than one year or the current operating cycle, whichever is longer. It is a tangible long-term asset. It is reported on the balance sheet. Its original cost (minus any salvage value) is expensed over its useful life.

Select the statement below that describes a post-closing trial balance.

It is a listing of all permanent accounts and their balances after closing.

$800 of supplies were purchased at the beginning of the month and the Supplies account was increased. As of the end of the period, $200 of supplies still remain. Which of the following is the correct adjusting entry?

Supplies expense would be debited for $600. Because: This would increase the Supplies account to $1,000. (800-200= $600) of supplies used.

Explain your understanding of what an accrued expense is by selecting the statements below which are correct. (Check all that apply.)

They refer to costs that are incurred in a period, but are both unpaid and unrecorded. They are reported on an income statement. Examples of accrued expenses are wages expense and interest expense. Adjustments involve increasing both an expense and a liability account.

Which of the accounts below are considered accrued expenses?

Wages expense, Interest expense

Explain what unearned revenues are

cash received in advance of providing a service or product.

Debit accounts receivable and credit services revenue

credit services revenue debit accounts receivable