Smartbook Chapter 4
Accumulated Depreciation has a normal ______ balance which indicates that it ______ Total Assets. (Enter one word per blank.)
credit; decreases
The closing entry for dividends involves a debit to Retained Earnings and a credit to Dividends. The debit to Retained Earnings causes a(n) ______ in the balance of the account.
decrease
True or false: Accumulated Depreciation is a contra-account to a long-lived asset account, such as Equipment. This means that it increases the balance of the long-lived asset on the balance sheet.
False
True or false: Salaries and Wages Receivable is the account used to record salaries and wages owed to employees for work performed during the current period.
False
True or false: The adjusting entry to record interest owed for the period will cause the balance in the Note Payable account to increase.
False
True or false: To calculate a company's income tax obligation, the income after tax is multiplied by the company's tax rate.
False; income before tax
The adjusting entry for supplies used during the period requires a _____ (debit or credit) to Supplies and a ______ (debit or credit) to Supplies expense. (Enter one word per blank.)
credit; debit
The closing entry to close Rent Expense requires Rent Expense to be _____and Retained Earnings to be _____. (Enter one word per blank - debited/ credited.)
credited; debited
The adjusting entry to record the revenue earned by the seller fulfilling its obligation results in a(n) _______ to the Deferred Revenue account. (Enter one word per blank.)
debit
The balance in the Dividends account represents a reduction to Retained Earnings under stockholders' equity. Therefore, the Dividends account has a normal _____ balance.
debit
The two categories of adjusting entries include what?
deferral and accrual adjustments
To determine the adjusting entries required, a(n) ______ is prepared. A. accrual adjustment B. journal C. deferral adjustment D. unadjusted trial balance E. ledger
D
The annual depreciation taken on a vehicle totals $3,000. The vehicle has been in service for 3 full years and the adjusting entries have been completed for the year. At the end of the 3rd year, the annual financial statements will report Depreciation Expense equal to $ _____and Accumulated Depreciation equal to _____$.
3,000; 9,000
Sterling Company paid $1,200 for 3 months of rent on April 1 of the current year. On April 30, Sterling Company made an adjusting entry to account for the rent that expired during the month of April. The adjusting entry contained a debit to Rent Expense in the amount of $ ______and a credit to Prepaid Rent in the amount of $______. The remaining balance in the Prepaid Rent account after the adjustment was $_______.
400,400,800
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? A. Accounts Receivable B. Accounts Payable C. Prepaid Revenue D. Deferred Revenue
A
After the adjustments have been completed, the adjusted balance in the Interest Payable account represents ______. A. interest that has accrued, but has not been paid, at the end of the period B. interest on notes receivable owed to the company C. interest that has been prepaid on existing debt at the end of the period D. total interest that has been paid or accrued during the period
A
After the adjustments have been recorded, Deferred Revenue on the balance sheet reports the amount of ______. A. the sales or services still owed to the customer B. revenues that have been fulfilled by the seller, but not collected during the period C. revenues the seller has fulfilled of its obligations during the current period
A
As of December 31, $2,500 of interest expense has accrued on a $50,000 note payable. The note payable and the accrued interest will become due and payable next year. How will the interest affect the adjustments at the end of the period? Multiple choice question. A. Interest Expense should be increased, because the cost of interest relates to the current period. B. Interest Receivable should be increased to reflect the accrued interest on the note payable. C. Note Payable should be increased to reflect the additional interest that will be due when the note is paid off next year. D. Interest Expense does not affect this period since it will not be paid. The expense will be recorded when the note and interest are paid in full.
A
Closing entries move the balances from the ______ accounts into the Retained Earnings account. Multiple choice question. A. temporary B. balance sheet C. permanent
A
During the closing process, the closing entries to individual expense accounts will be recorded with a ______ to reduce the account balance to zero. Multiple choice question. A. credit B. debit
A
For companies that generate a net loss during the current period, the closing entries will result in a net ______ entry to Retained Earnings. Multiple choice question. A. debit B. credit
A
If a company's adjusted income before income tax expense is $10,000 and its tax rate is 20%, what is net income? A. $8,000 B. $2,000 C. $9,800 D. $12,000 E. $10,200
A
Permanent accounts are found on ______. Multiple choice question. A. only the balance sheet B. both the balance sheet and the income statement C. only the income statement
A
Prepaid expenses, such as Prepaid Rent, should be ______ by the benefits that were used up during the accounting period. A. decreased B. increased C. unaffected
A
What are the effects on the accounting equation from the adjustment for depreciation? A. Total assets will decrease and total stockholders' equity will decrease. B. Total assets will increase and total stockholders' equity will decrease. C. Total assets will increase and total stockholders' equity will increase. D. Total assets will decrease and total stockholders' equity will increase.
A
When will Accounts Receivable be involved in an adjusting entry? A. Revenue is earned but not yet collected or recorded at the end of the period. B. Accounts Receivable will never be used in an adjusting entry. It is only used in daily transactions. C. Recognizing revenue from cash collected earlier in the period. D. Cash is collected in advance of the revenue at the end of the period.
A
Which of the following statements is correct? A. Financial statements are prepared after adjustments to ensure that all accounts have been brought to their correct balance. B. Financial statements are prepared before adjustments to ensure that all accounts have been brought to their correct balance. C. Financial statements are prepared before adjustments to ensure that debits equal credits before beginning the adjustment process. D. Financial statements are prepared before adjustments to ensure that debits equal credits before concluding the adjustment process.
A
Which report is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the accounts balance? A. Adjusted trial balance B. Closing entries C. Post-closing trial balance D. Unadjusted trial balance
A
Why is the Deferred Revenue account reduced during the adjustment process? Multiple choice question. A. As the seller performs its obligations, it is removed from Deferred Revenue and transferred into a revenue account. B. As cash is paid to the customer, Deferred Revenue is reduced. C. As cash is received from the customer, Deferred Revenue is reduced. D. As the seller performs its obligations, it is removed from Deferred Revenue and transferred into the Accounts Receivable account.
A
______ensure that the revenues recognized and expenses incurred during the period are reflected in the income statement. A. Adjusting entries B. Unadjusted trial balances C. Permanent accounts
A
Identify the entries needed for the closing process. (Select all that apply.) Multiple select question. A. Credit Dividends and debit Retained Earnings. B. Debit each revenue, credit each expense, and record the difference in Retained Earnings. C. Credit each revenue, debit each expense, and record the difference in Retained Earnings D. Debit Dividends and credit Retained Earnings.
A and B
The entry to record income tax accrued, but unpaid, at the end of the accounting period includes both a ______ and a ______. (Check all that apply.) A. debit to Income Tax Expense B. credit to Income Tax Payable C. credit to Cash D. credit to Income Tax Expense E. debit to Income Tax Payable
A and B
Which of the following transactions constitute an accrual adjustment involving an expense account? (Check all that apply.) A. Wages incurred but not yet paid to employees as of the end of the accounting period B. Taxes incurred but not yet paid to the government as of the end of the accounting period C. Insurance expired during the month from a 3-month insurance policy that was purchased at the beginning of the month D. Supplies that were used during the month
A and B
Select all that apply Why is it necessary to make adjustments to revenue accounts at the end of the accounting period? A. Revenues the seller has performed of its obligations but not yet billed to Accounts Receivable, should be recorded as a revenue. B. Revenues need to be adjusted so that revenues equals the amount of cash received during the current period. C. Deferred Revenue should be reduced for any portion the seller has fulfilled of its obligations during the current period.
A and C
Select all that apply The adjusting entry to record amortization causes ______. (Select all that apply.) A. stockholders' equity to decrease B. assets to increase C. assets to decrease D. stockholders' equity to increase E. liabilities to decrease F. liabilities to increase
A and C
Which of the following accounts found on an unadjusted balance typically require adjusting entries? (Select all that apply.) Multiple select question. A. Prepaid Rent B. Interest Payable C. Common Stock D. Cash E. Supplies
A, B, E
Select all that apply The Deferred Revenue T-account will show which of the following? (Select all that apply.) Multiple select question. A. the amounts received in advance that the seller has not yet fulfilled of its obligations on the credit side B. the normal ending balance on the credit side C. the amounts received in advance that the seller has not yet fulfilled of its obligations on the debit side D. the normal ending balance on the debit side E. the amounts the seller has fulfilled of its obligations that were collected in advance on the credit side F. the amounts the seller has fulfilled of its obligations that were collected in advance on the debit side
A, B, F
Adjusting entries to adjust Supplies or Prepaid Rent have which of the following effects? (Select all that apply.) A. The carrying value of the assets are decreased. B. Total assets is decreased on the balance sheet. C. Total expenses on the income statement are increased. D. The carrying value of the assets are increased. E. Total expenses on the income statement are decreased.
A, B, and C
Select all that apply Which of the following is true regarding depreciation of equipment? A. Accumulated Depreciation is increased as the equipment is used causing the carrying value to decrease on the balance sheet. B. Accumulated Depreciation is a contra-account that reports the amount of usefulness used as of the balance sheet date. C. Depreciation is reported in Accumulated Depreciation which is netted against the related Equipment account on the balance sheet. D. Depreciation directly decreases the Equipment account causing the carrying value to decrease. E. Accumulated Depreciation is decreased as the equipment is used causing the carrying value to increase.
A, B, and C
Adjustments ensure that Blank______ balances are reported at amounts representing the economic benefits that remain at the end of the current period. A. assets B. expenses C. liabilities D. revenues E. accounts
A.
A prepayment that is originally recorded as an asset will be: Multiple choice question. A. expensed in total at the end of the accounting period. B. allocated to future accounting periods based on the value of the benefit used during the period. C. transferred to a liability account at the end of the accounting period.
B
Adjustments to revenue accounts at the end of the accounting period are made to adhere to accrual accounting principles, specifically the ______ principle. A. cost B. revenue-recognition C. expense recognition (matching) D. contra-account
B
Deferral adjustments are necessary when cash is paid or collected ______. A. when the expense is incurred or revenue is recognized from providing goods or services B. before the expense is incurred or revenue is recognized from providing goods or services C. after the expense is incurred or revenue is recognized from providing goods or services
B
Deferred Revenue is credited when ______. Multiple choice question. A. the adjusting entry is recorded at the end of the accounting period B. cash is collected in advance of the revenue C. the revenue is recorded from delivering goods or services D. a company purchases an intangible asset
B
For companies that generate net income during the current period, the closing entries will result in a net ______ entry to Retained Earnings. A. debit B. credit
B
If a company records a debit to Salaries and Wage Payable and a credit to Cash, what has occurred? The company is ______. Multiple choice question. A. violating the expense recognition principle B. paying for salaries and wages that had been accrued earlier C. paying its employees in advance for work to be performed in the future D. adjusting for salaries and wages owed for work performed by its employees
B
Interest Expense is ______. Multiple choice question. A. credited when Interest Payable is debited B. accrued each period the notes payable is unpaid C. deferred until the notes payable is due and paid D. recorded when the notes payable are issued
B
Noodlecake previously purchased $800 of supplies and now only has $200 left. What is Supplies Expense equal on its income statement? Multiple choice question. A. $200 B. $600 C. $800 D. $1,000
B
On November 30, a company borrowed $1,000 by issuing a 1-year note with interest and principal due at the end of the 1-year period. The interest on the note should be expensed ______. A. immediately when the notes payable was issued, November 30 B. over the months the note is unpaid C. when the interest is paid, a year later
B
Permanent accounts are found on ______. A. only the income statement B. only the balance sheet C. both the balance sheet and the income statement
B
The balance in the Prepaid Insurance account after the adjusting entries have been recorded represents the ______. A. amount owed for insurance at the end of the accounting period B. value of the insurance prepayment that remains to benefit future periods C. cost of the insurance expired during the period
B
What are the effects on the accounting equation from the adjustment for income tax expense accrued, but not paid, at the end of the accounting period? A. Total liabilities will decrease and total stockholders' equity will decrease. B. Total liabilities will increase and total stockholders' equity will decrease. C. Total liabilities will decrease and total stockholders' equity will increase. D. Total liabilities will increase and total stockholders' equity will increase.
B
What is a good starting point for determining which accounts require adjustment? A. Balance sheet B. Unadjusted trial balance C. Income statement D. Journal
B
Which account will need an adjusting entry to adjust for the amounts used during the period that were paid for in advance? Multiple choice question. A. Income Taxes Payable B. Prepaid Rent C. Deferred Revenue D. Sales Revenue
B
Which of the following is closed into Retained Earnings by debiting Retained Earnings? A. Revenue B. Dividends C. Accounts Receivable D. Accounts Payable
B
Which of the following statements is incorrect regarding the need to make accrual adjustments at the end of the accounting period? A. Certain events occur over time that would be too tedious and time-consuming to record on a daily basis. B, The Cash account should be adjusted for the effects of accrued revenues and expenses during the accounting period. C. Since financial statements are prepared at the end of the period, the asset and liability account balances should be brought up to date. D. Revenues and expenses should be recorded in the period in which they occur, even though the cash will be paid or received in a future period.
B
Adjusting entries are important because ______. (Select all that apply.) Multiple select question. A. adjustments ensure that the assets and liabilities are properly reflected in the income statement B. without them, the financial statements would be misleading. C. adjustments ensure that the balance sheet reports all of the economic resources the company owns and all of the obligations the company owes D. without them, Net Income would be zero
B and C
As of December 31, the unadjusted balance in Deferred Revenue contains $5,600 for unredeemed 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? Multiple select question. A. Cash needs to be increased by the amount of gift cards redeemed during the month. B. Sales Revenue needs to be increased by the amount of gift cards redeemed during the month. C. Deferred Revenue needs to be decreased by the amount of gift cards redeemed during the month. D. No adjustment is necessary as the gift cards were credited to revenue at the time they were sold. E. Sales Revenue needs to be decreased by the amount of gift cards redeemed during the month.
B and C
Select all that apply Which of the following types of transactions represent accrual adjustments? (Select all that apply.) A. Decrease to Supplies and Increase to Supplies Expense. B. Increase to Income Taxes Payable and Increase to Income Taxes Expense. C. Increase to Interest Payable and Increase to Interest Expense.
B and C
Select all that apply Which two accounts are used to record the adjusting entry for the amortization of long-term assets that lack physical substance? A. Depreciation Expense B. Amortization Expense C. Accumulated Amortization D. Accumulated Depreciation E. Deferred Revenue
B and C
A contra-account ______. (Select all that apply.) Multiple select question. A. example is Accounts Payable because it has a normal balance opposite of Accounts Receivable B. example is Accumulated Depreciation because it has a normal credit balance C. example is Depreciation Expense because it has a normal debit balance D. has a normal balance opposite of the account it offsets
B and D
Select all that apply The entry to record the payment of wages incurred in the prior accounting period is recorded with ______. (Select all that apply.) Multiple select question. A. credit Salaries and Wages Payable B. credit Cash C. credit Salaries and Wages Expense D. debit Salaries and Wages Payable E. debit Salaries and Wages Expense
B and D
Select all that apply Which of the following is true about the adjusting entry to record the revenue for which the seller has performed of its obligations but not yet collected? (Select all that apply.) Multiple select question. A. liabilities will decrease B. assets will increase C. assets will decrease D. liabilities will increase E. stockholders' equity will increase F. stockholders' equity will decrease
B and E
Which of the following account balances will typically be reduced as a result of adjusting entries? (Select all that apply.) Multiple select question. A. Cash B. Prepaid Rent C. Supplies D. Deferred Revenue E. Interest Payable
B, C, D
Select all that apply Which of the following are temporary accounts that will be closed at the end of the accounting period during the closing process? (Select all that apply.) A. Liabilities B. Expenses C. Retained Earnings D. Common Stock E. Revenues F. Dividends G. Assets
B, E, F
A(n) ______ has a normal balance opposite of the account it offsets. A. deferral account B. contrast account C. contra-account D. accrual account
C
Adjusting entries are recorded ______. A. daily to ensure revenues and expenses are properly stated and up-to-date B. as the final step in the accounting cycle in order to prepare balances for the next accounting period C. at the end of the accounting period before financial statements are prepared D. at the beginning of each accounting period
C
Adjustments to revenue accounts at the end of the accounting period are made to adhere to accrual accounting principles, specifically the ______ principle. Multiple choice question. A. contra-account B. cost C. revenue-recognition D. expense recognition (matching)
C
After the adjustments have been completed, the adjusted balance in the Interest Expense account represents ______. A. interest that has accrued, but has not been paid, at the end of the period B. interest that has been paid during the accounting period C. total interest that has been paid and/or accrued during the period D. interest on the company's notes receivable
C
After the adjustments have been completed, the balance in the "Salaries and Wages Expense" account represents ______. A. salaries and wages that have been incurred, but not yet paid at the end of the accounting period B. salaries and wages that have been paid during the accounting period C. total salaries and wages, paid and unpaid, that have been incurred during the accounting period
C
Closing journal entries are recorded ______. Multiple choice question. A. before the adjusted trial balance is prepared B. after the post-closing trial balance is prepared C. after the financial statements have been prepared D. before the unadjusted trial balance is prepared
C
Deferring a revenue or expense account in accounting means that the amount ______. A. will be reported as a revenue or an expense in the current period B. will not be reported in the accounting records C. will be reported as a revenue or an expense in a later period D. was reported as a revenue or an expense in a prior period
C
How does the timing of adjusting entries differ from the accounting for daily transactions? A. Adjustments are made at the beginning of the accounting period to ensure accuracy is maintained during the cycle. B. Adjustments are made throughout the accounting period as information becomes available. C. Adjustments are made at the end of the accounting period because making them on a daily basis would be inefficient. D. Adjustments are made at the discretion of management and are not necessary for each accounting period.
C
On November 1, Lawn & Order, Inc. paid $24,000 for two years of rent in advance for rent beginning on November 1. How much should be expensed for the month of November? Multiple choice question. A. $12,000 B. $23,000 C. $1,000 D. $24,000
C
The Equipment account balance in a company's ledger equals its ______. A. depreciated cost B. contra-account value C. original cost D. higher fair market value
C
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? A. Accounts Receivable should be increased by $400 and Deferred Revenue should be increased by $400. B. Cash should be decreased by $400 and Sales Revenue should be increased by $400. C. Accounts Receivable should be increased by $400 and Sales Revenue should be increased by $400. D. Deferred Revenue should be increased by $400 and Sales Revenue should be decreased by $400.
C
What is the purpose of the depreciation adjustment for long-lived assets? A. Depreciation represents maintenance costs incurred to keep an asset in good working condition. B. Depreciation represents the cash paid each year for the purchase of an asset. C. Depreciation allows the company to allocate the cost of an asset over the years the asset benefits the company.
C
When should supplies be recorded as an expense? A. In the period cash is paid for the supplies, regardless of when the supplies were received B. In the period the supplies are sold, regardless of when they were received C. In the period the supplies are used, regardless of when they were purchased D. In the period the supplies are purchased, regardless of when cash is paid
C
Select all that apply In its 1st year of business, Daily Grind, Inc. purchased $1,000 of supplies of which it only has $300 left at the end of the period. Which of the following will be found in the year-end financial statements? (Select all that apply.) A. Supplies on the balance sheet of $700 B. Supplies Expense on the income statement of $1,300 C. Supplies on the balance sheet of $300 D. Supplies Expense on the income statement of $700
C and D
Adjustments help to ensure that all ____ are recorded in the period in which they are incurred A. journal entries B. closing entries C. cash transactions D. Expenses
D
After the adjustments have been completed for the fiscal year, the adjusted balance in the Depreciation Expense account represents the ______. A. total depreciation that has accrued on the long-lived assets since their purchase B. cash paid for the long-lived assets in the fiscal year C. decline in the market value of the long-lived assets D. depreciation for the current fiscal year
D
Beauty and the Bistro, Inc. had $500 of Supplies on its balance at the end of its 1st year of business. It purchased $5,000 of supplies during the 2nd year. At the end of the 2nd year, it had $800 of supplies on hand. What is the amount of Supplies Expense on the income statement? Multiple choice question. A. $800 B. $6,300 C. $1,300 D. $4,700 E. $5,800
D
Generally accepted accounting principles require adjusting entries to be recorded at the end of an accounting period to ensure compliance with the _______. Multiple choice question. A. financial statement analysis principle B. cost principle C. time period assumption D. revenue and expense recognition principles E. closing process principle
D
The adjusted trial balance should be prepared ______ the financial statements are prepared to prove the ______ of the debits and credits. Multiple choice question. A. after; accuracy B. after; equality C. before; accuracy D. before; equality E. before; closing F. after; closing
D
The adjusting entry to record revenue for services the seller has performed but not yet collected requires: Multiple choice question. A. a debit to Service Revenue and credit to Accounts Receivable. B. a debit to Accounts Payable and credit to Service Revenue. C. no entry since revenues should not be recorded until collected. D. a debit to Accounts Receivable and credit to Service Revenue. E. no entry since revenues should not be recorded until the customers are billed.
D
The adjusting entry to record the supplies used during the period will result in a(n) ______. A. decrease to Supplies and a decrease to Supplies Expense B. increase to Supplies and a decrease to Supplies Expense C. increase to Supplies and an increase to Supplies Expense D. decrease to Supplies and an increase to Supplies Expense
D
The effect of accrual adjustments involve debiting a(n) ______. A. asset and crediting an expense B. expense and crediting an asset C. asset and crediting a liability D. expense and crediting a payable
D
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? A. Total assets will increase and total stockholders' equity will decrease. B. Total assets will decrease and total stockholders' equity will decrease. C. Total assets will decrease and total stockholders' equity will increase. D. Total assets will increase and total stockholders' equity will increase.
D
Which of the following adjusting entries are recorded with a debit to an expense and a credit to a liability? A. Purchases of inventory on account B. Adjusting supplies used during the period C. Recording depreciation for the period D. Accruing for services received that have not yet been paid
D
Which of the following statements is correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period? A. Salaries and Wages Expense will be recorded as a credit for the amount of the unpaid salaries and wages. B. Salaries and Wages Payable will be recorded as a debit for the amount of the unpaid salaries and wages. C. Salaries and Wages Payable will decrease by the amount of the unpaid wages. D. Salaries and Wages Expense will increase by the amount of the unpaid salaries and wages.
D
Why is the balance in the Depreciation Expense account generally different from the balance in the Accumulated Depreciation account? A. The Accumulated Depreciation account contains the value of the long-lived asset as well as the depreciation. B. The balances in the two accounts should be the same amount. C. The adjusting entry contains a different amount for Depreciation Expense and Accumulated Depreciation. D. Depreciation expense only reflects the current period depreciation. Accumulated Depreciation contains depreciation since the asset was purchased.
D
Adjusting entries include _______ adjustments for revenues from providing goods or services that have not yet been collected and expenses incurred but not yet paid. They also include _______adjustments for amounts collected in advance of providing the goods or services and expenses incurred that were previously recorded as assets. (Enter one word per blank.)
accrual; deferral
A(n) _____ trial______ is prepared immediately _______the adjusting entries have been recorded and_______ the financial statement are prepared. (Enter one word per blank.)
adjusted; balance; after; before
Without_____ entries, financial statements would present an incomplete and misleading picture of the company's financial position.
adjusting
The step in the accounting cycle where entries are recorded to update retained earnings and zero out temporary accounts is referred to as the ____ process. (Enter one word per blank.)
closing
If an asset account such as Equipment has a normal debit balance, the associated contra-account should have a normal _____ balance. (Enter one word per blank.)
credit
The adjusting entry to record the amount of prepaid rent used during the period requires a _______ (debit/credit) to Rent Expense and a ______(debit/credit) to Prepaid Rent.
debit; credit
_____ is the process of allocating the cost of buildings, vehicles, and equipment to expense over time as they are used
depreciation
______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
Adjusting entries are made at the ____ of the accounting period, while daily transactions are made throughout the accounting period. (Enter one word per blank.)
end
The _______ recognition principle requires an adjustment for salaries and wages expense incurred during the accounting period that will be paid in a future accounting period.
expense
The adjusting entry to record interest owed on obligations at the end of the accounting period includes a debit to "Interest_____ " and a credit to "Interest_____ ." (Enter one word per blank.)
expense; payable
The adjusting entry to record salaries and wages owed to employees at the end of the accounting period includes a debit to "Salaries and Wages ______" and a credit to "Salaries and Wages _______."
expense; payable
_____ expense accumulates or accrues throughout the accounting period on Notes Payable.
interest
______ is defined as the "cost of borrowing money." Since the account represents a cost incurred on borrowed money, it is classified as a(n) _______ account under stockholders' equity.
interest; expense
After the adjustments have been completed, the adjusted balance in Income Tax Payable represents the amount_____ to the government at the end of the accounting period. (Only add one word per blank.)
owed
Salaries and Wages Payable is recorded for salaries and wages incurred, but not yet ______ to employees, at the end of the accounting period.
paid
The adjusting entry for income taxes records income tax that is incurred and _____ by the company.
payable
In accrual accounting, mto defer means to ___ recording the other side of the cash transaction as a revenue or expense. Instead, the other side of the cash entry is recorded as liability or prepaid.
postpone
