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