Accounting chapter 1-4

How do adjusting entries for accrued expenses affect liabilities and expenses?

Adjusting entries for accrued expenses can increase liabilities and increase expenses.

Which of the following statements describes the effect that adjusting entries may have on liabilities? Adjusting entries reduce liabilities for the amount of any accrued and unpaid expenses at the end of the period. Adjusting entries do not have any effect on liabilities, since cash is not included in the adjusting entries. Adjusting entries increase liabilities for the amount of any accrued and unpaid expenses at the end of the period.

Adjusting entries increase liabilities for the amount of any accrued and unpaid expenses at the end of the period.

During December, Mainzel Interior Design Corporation redecorated the reception areas of a local hotel. The project was completed on December 31 with payment due in 30 days. Payment was received on January 21 of the following year. When should Mainzel recognize the related revenue using accrual accounting?

December 31

Which of the following pre-payments requires an adjusting entry at the end of the year? On December 31, the company pays next year's fire insurance. On December 20, the company pays its liability insurance; coverage starts January 1. On November 1, the company pays rent for the next six months.

On November 1, the company pays rent for the next six months.

Andy records an adjusting entry for deferred revenue. Andy should:

credit a revenue account debit a liability account

end of the period adjusting entry to accounts receivable and service revenue

debit accounts recievable credit service revenue

end of the period adjusting entry to salaries expense and payable

debit salaries expense credit salaries payable

When a company records an adjusting entry for services previously recorded as Deferred Revenue, it records a:

debit to Deferred Revenue credit to Revenue

end of the year adjustment to deferred revenue and service revenue

debit to deferred revenue credit to service revenue

A prepayment is originally recorded as an asset. An adjusting entry at the end of the accounting period results in a(n) ______ in the asset account and a(n) ______ in the expense account

decrease: increase

Adjusting entries help to ensure that all ______ are recorded in the period in which they are incurred.

expenses

An adjusting entry is necessary to record interest expense at year-end because the interest:

has already been incurred

If an adjusting entry's debit is to an expense account, then the credit must be to which of the following?

liability prepaid expense

he adjusting entry for a deferred revenue includes a debit to a ____ account and a _____ account

liability: revenue

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

used during the accounting period