Chapter 4. Adjustment, Financial Statment, and Financial Results

Place the steps in the adjustment process in order. Drag the Items to put them in the proper order with the first step on top.

1. Analyze the accounts to determine the amout of the adjustment 2. Record the adjusting entry. In the journal 3. Summarize the adjusting entries in the accounts

Bristol, INC. paid $800 for a 4-month insurance policy on August 1 of the current year. On August 31, Bristol, Inc. made an adjusting entry to account for the insurance that expired during the month of August. The adjusting entry contained a debit to Insurance Expense in the amount of ___ and a credit to Prepaid Insurance in the amount of ___. The remaining balance in the Prepaid Insurance account after the adjustment was ___?

200, 200, 600

___ Expense should be recorded to recognize the use of and benefit received from long-lived assets, such as equipment, during the accounting period.(Enter one word per blank.)

Depreciation

Adjustments help to ensure that all revenues are recorded in the period in which they are

Earned

Which of the following types of transactions represent accrual adjustments?(select all that apply.)

Increase to Income Taxes Payable and Increase to Income Taxes Expense Increase to Interest Payable and Increase t Interest Expense

A prepayment is originally recorded as an asset. Later at the end of the accounting period, an adjustment is recorded causing in a(n)______ in the asset account and a(n) _____ in the expense account.

Revenue earned, but not yet collected, for interest on a note recievable.

As of December 31, the un-adjusted balance in unearned revenue contains $5,600 for un-redeemed gift cards. An analysis of the monthly sales indicates that $3,200 gift cards were redeemed during the month but not yet recorded. How will these transactions affect the adjustments at the end of the period?

Unearned Revenue needs to be decreased by the amount of gift cards redeemed during the month. Sales Revenue needs to be increased by the amount of gift cards redeemed during the month.

the adjusting entry to record the supplies used during the period will result in a(n)

decrease to supplies and increase to supplies expense

After the adjustment have been completed, the adjusted balance in Income Tax Expense account represents ___.

total income tax that has been paid or accrued during the period.

The entry to record iincome tax accrued, but unpaid at the end of the accounting period includes both a ___ and a ___.(Check all that apply.)

Credit to Income Tax Payable Debit to Income Tax Expense

A prepayment is originally recorded as an asset. Later at the end of the accounting period, an adjustment is recorded causing in a(n)______ in the asset account and a(n) _____ in the expense account.

decrease, increase