study guide ch. 3&4
Wages of $250 have accurued for the month but have not been paid yet. What would be the adjusting entry?
Wages Expense $250 Wages Payable $250
Can land be depreciated?
No!
What are the two steps of closing entries?
1. close revenues and expenses into retained earnings (debit all revenues, and credit all expenses). Then if revenues are greater than expenses, credit retained earnings for the difference(net income), if not then debit retained earnings. 2. Close dividends to retained earnings. (Credit dividends and debit RE)
What are the 5 types of adjusting entries
1. Deferred Expense (previously recorded as an asset{aka unearned, anything paid in advance}) 2. Deferred Revenue (previously recorded as a liability{unearned, anything paid in advance}) 3. Accrued Expenses (not previously recorded) 4. Accrued Revenue (Not previously recorded. Earned but not billed) 5. Depreciation
What do you do when it says recorded services provided on account?
Always debit accounts receivable and credit fees earned
Which accounts are left for the post-closing trial balance?
Assets, liabilities & stockholder's equity
Office Equipment with a value of $1800 is depreciated by $50 for the month. What is the adjusting entry?
Depreciation Expense $50 Accumulated Depreciation $50
What is different about differals and accurals?
Differals have been pre-recorded while accurals have not.
What would the initial and adjusting entry be if someone paid you 3 months in advance for rent?
Initial: Cash Unearned rent Adjusting entry (after they earn one month of rent): Unearned Rent Rent Revenue
Accumulated Depreciation
Is a contra asset, has a normal credit balance, and does not get closed at the of an accounting period.
What would the adjusting entry of insurance expired
debit insurance expense and credit prepaid insurance
adjusting enteries
journal entries recorded to update general ledger accounts at the end of a fiscal period
A premium paid on a 6 month insurance policy is an example of a
prepaid expense
