FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: Adjusting Accounts and Preparing Financial Statements

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 101

Essay

Review LaterAdd Note

Review Later

______________________ revenues are liabilities requiring delivery of products and for services.

Correct Answer

verified

Show Answer

Question 102

Essay

Review LaterAdd Note

Review Later

What are the types of adjusting entries used for prepaid expenses, depreciation and unearned revenues?

Correct Answer

verified

Prepaid expenses are deferrals, or expen...

View Answer

Show Answer

Question 103

Essay

Review LaterAdd Note

Harrow Co. is a multi-million business. The business results for the year have been seriously impacted by a slowing economy. The company wants to improve its net income. It has incurred $2,500,000 in unpaid salaries at the end of the year and wants to leave those amounts unrecorded at the end of the year. (a) How would this omission affect the financial statements of Harrow? (b) Which accrual basis of accounting principles does this omission violate? (c) Would this be considered an ethical problem?

A fiscal year refers to an organization's accounting period that spans twelve consecutive months or 52 weeks.

What is an adjusted trial balance? Why is it prepared?

On October 1 of the current year, Morton Company paid $9,600 cash for a one-year insurance policy that took effect on that day. On the date of the payment, Morton recorded the following entry: Prepare the required adjusting entry at December 31 of the current year.

Two accounting principles that are relied on in the adjusting process are:

Unearned revenue is reported in the financial statements as:

The adjusting entry to record an accrued expense is:

Which of the following statements is incorrect?

On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:

An adjusting entry could be made for each of the following except:

A company earned $2,000 in net income for October. Its net sales for October were $10,000. Its profit margin is:

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:

Pfister Co. leases an office to a tenant at the rate of $5,000 per month. The tenant contacted Pfister and arranged to pay the rent for December on January 8 of the following year. Pfister agrees to this arrangement. a.) Prepare the journal entry that Pfister must make at year ended December 31 to record the accrued rent revenue. b.) Prepare the journal entry to record the receipt of the rent on January 8 of the following year.

It is acceptable to record prepayment of expenses as debits to expense accounts.

Before an adjusting entry is made to accrue employee salaries, Salaries Expense and Salaries Payable are both understated.

The cash basis of accounting commonly results in financial statements that are less comparable from period to period than the accrual basis of accounting.

Under the alternative method for recording prepaid expenses, which is the correct set of journal entries?

The unadjusted trial balance and the adjustment data for Harris Training Institute are given below along with adjusting entry information. If these adjustments are not recorded, what is the impact on net income? Show calculation for net income without the adjustments and net income with the adjustments. Which one gives the most accurate net income? What accounting principles are being violated if the adjustments are not made? Additional information items: a. The Prepaid Insurance account consists of a payment for a 1 year policy. An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end. b. A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned Rent. c. Accrued interest expense on the note payable of $1,000 has been incurred but not paid.