ACC 211-801 CH 4

_______ allows the company to allocate the cost of an asset over the years the asset benefits the company.

Depreciation

The adjusting entry a company would record for the amount of wages incurred but not yet paid will cause which of the following?

Increase liabilities Decrease stockholders' equity

Which line item on the adjusted trial balance reports its beginning balance but on the balance sheet reports its ending balance?

Retained Earnings

The adjustment for supplies used during the period will result in a debit to the _____ account and a credit to the _____ account.

Supplies Expense; Supplies

Which report is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the accounts balance?

adjusted trial balance

An adjusted trial balance is prepared immediately _____ the adjusting entries have been recorded and ____ the financial statement are prepared

after; before

Interest incurred, but not yet paid during an accounting period, should be recorded as an expense and a _____

liability

Which two accounts are used to record the adjusting entry for the amortization of long-term assets that lack physical substance?

-Accumulated Amortization -Amortization 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

-Interest owed on notes payable -Utilities to be paid in later accounting period

When will Accounts Receivable be involved in an adjusting entry?

-Revenues are earned but have not been collected or recorded at the end of the period.

After the adjustments have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies:

-used during the accounting period.

what is the effect of the December 31 adjusting entry to record $400 of revenue for which the seller has performed for its customers but not yet collected?

Accounts Receivable should be increased by $400 and Sales Revenue should be increased by $400

______ are prepared after adjustments to ensure that all accounts have been brought to their correct balance

Financial Statements

Which of the following statements is correct regarding the adjustment to record interest accrued on a note payable?

Interest on the note payable is classified as an expense since it is a cost of borrowing.

How does the adjustment for depreciation differ from other defferal adjustments?

The depreciation adjustment uses a contra-asset account rather than reducing the asset accounts directly.

In recording an accrual adjustment to account for revenues earned but not yet collected: An _____ is increased since cash will be collected at a later date.

asset

The entry to record the payment of wages incurred in the prior accounting period is recorded with ____ to Salaries and Wages payable and ___ to cash

debit; credit

the seller's adjusting entry to record the revenue earned by fulfilling its obligation to its buyers which had been collected in advance requires a _____ to Deferred Revenue and a _____ to Sales Revenue

debit; credit

___ Expense should be recorded to recognize the use of and benefit received from long-lived assets, such as equipment, during the accounting period.

depreciation

is the process of allocating the cost of buildings, vehicles, and experiment to expense over time as they are used.

depreciation

Adjustment entries are made at the ____ of the accounting period, while daily transactions are made throughout the accounting period.

end

Salaries and Wages Payable is recorded for salaries and wages earned, but not yet paid to employees, at the ________ of the accounting period.

end

The ____ recognition principle requires an adjustment for income tac expenses owed attributable to the net income earned during the current period

expense

Accrual adjustments include either a debit to a _____ account and a credit to a liability account OR a debit to an asset account and a credit to a _____ account

expense; revenue

Adjustments help to ensure that all _____ are recorded in the period in which they are incurred.

expenses

Deferral adjustments include either a debit to a liability account and a credit to a ______ account OR a debit to an ______ account and a credit to a asset account

revenue; expense

In contrast, ____, ____, and ____ are considered temporary accounts because they track only the current year's results and then are closed before the next year's activities are recorded

revenues, expenses, and dividends

which of the following statements most accurately describes the purposes of the closing entries?

to establish zero balances in the income statement and dividend accounts and to transfer net income and dividends into retained earnings

What are the effects on the accounting equation from the adjustment for wages incurred, but not yet paid, during the accounting period?

total assets will increase and total stockholder's equity will increase

after the adjustments have been completed, the adjusted balance in Income Tax Expense account represents _____

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

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 adjusting entry to record wages incurred but not yet recorded includes a credit to_____.

wages payable