chapter 3 - the adjusting process

After which of the following errors would the adjusted trial balance totals not agree?

A debit to Accounts Receivable was inadvertently posted as a credit to Accounts Payable.

The adjusting entry to record depreciation includes

a debit to an expense account

When recording an adjusting entry for unearned revenues

a liability account is debited

The adjusted trial balance is prepared

after adjusting entries are posted but before financial statements are prepared.

Vertical analysis can be used to analyze changes

all of these choices are correct

When recording an adjusting entry for a prepaid expense

an asset account is credited

Unearned revenues

are referred to as future revenues

All adjusting entries affect

at least one income statement account and one balance sheet account

GreenSource Company began the period with $330 in supplies. During the month, an additional $1,500 of supplies were purchased. A physical inventory at the end of the period revealed that there were $585 of supplies on hand. The adjusting entry should include a

credit to Supplies for $1,245

Barry Company received $8,000 full payment in advance for services that are 60 percent complete at the end of the period. The adjusting entry will

debit Unearned Revenue for $4,800 and credit Service Revenue for $4,800.

In the vertical analysis of a balance sheet

each asset item is stated as a percent of total assets

In the vertical analysis of an income statement

each item is stated as a percent of revenues or fees earned.

Because collecting the adjustment data requires time, the adjusting entries are often

entered later but dated as of the last day of the period

Accrued revenues are revenues that

have been earned but have not been received or recorded in the books

If an adjustment for salaries earned but not recorded or paid in the amount of $85,000 were to be omitted, how would this affect the financial statements?

All of these effects would occur

Indicate which of the following accounts will never require an adjusting entry.

Cash

Using the following information, prepare a vertical analysis of two years' income statements. Fees Earned is $153,500 for Year 2 and $149,700 for Year 1. Operating expenses are $122,800 for Year 2 and $127,245 for Year 1. Which of the following statements are true?

Operating income has increased as a percentage of revenue.

Which of the following would not cause the adjusted trial balance totals to be unequal?

The adjustment for prepaid insurance was omitted

The accumulated depreciation account is called

the contra asset account

The adjusted trial balance is prepared

to verify the equality of total debit and credit balances