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Exam 3: The Adjusting Process

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Question 81

Multiple Choice

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Which of the following is an example of a prepaid expense?

A) Supplies
B) Accounts Receivable
C) Unearned Subscriptions
D) Unearned Fees

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Question 82

Multiple Choice

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The adjusting entry for gym memberships earned that were previously recorded in the unearned gym memberships account is

A) debit Unearned Gym Memberships; credit Gym Memberships Revenue
B) debit Gym Memberships Revenue; credit Unearned Gym Memberships
C) debit Unearned Gym Memberships; credit Prepaid Gym Memberships
D) debit Gym Memberships Expense; credit Unearned Gym Memberships

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Question 83

Essay

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On December 31,a business estimates depreciation on equipment used during the first year of operations to be $2,900.a Journalize the adjusting entry required on December 31.b If the adjusting entry in a were omitted,which items would be erroneously stated on 1 the income statement for the year and 2 the balance sheet as of December 31?

Which one of the accounts below would likely be included in an accrual adjusting entry?

At the end of the fiscal year,the usual adjusting entry for depreciation on equipment was omitted.Which of the following is true?

The adjusting entry to adjust supplies was omitted at the end of the year.This would affect the income statement by having

For the year ending June 30,Island Clinical Services mistakenly omitted adjusting entries for 1 $1,500 of supplies that were used,2 unearned revenue of $4,200 that was earned,and 3 insurance of $5,000 that expired.What is the combined effect of these errors on a revenues,b expenses,and c net income for the year ending June 30?

The adjusting entry to record the depreciation of a building for the fiscal period is

The revenue recognition concept

The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.

The following adjusting journal entry found in the journal is missing an explanation.Select the best explanation for the entry.

On March 1,a business paid $3,600 for a twelve-month liability insurance policy.On April 1,the business entered into a two-year rental contract for equipment at a total cost of $18,000.Determine the following amounts: a. insurance expense for the month of March b. prepaid insurance as of March 31 c. equipment rent expense for the month of April d. prepaid equipment rental as of April 30

Prior to the adjusting process,accrued revenue has

Complete the missing items in the Summary of Adjustments chart: 11ea83a5_c2bd_4dbc_908c_3b738474d684

At the end of the fiscal year,the following adjusting entries were omitted: a. No adjusting entry was made to transfer the $1,750 of prepaid insurance from the asset account to the expense account. b. No adjusting entry was made to record accrued fees of $525 for services provided to customers. Assuming that financial statements are prepared before the errors are discovered,indicate the effect of each error,considered individually,by inserting the dollar amount in the appropriate spaces.Insert "0" if the error does not affect the item.

The matching concept

A company pays an employee $3,000 for a five day work week,Monday-Friday.The adjusting entry on December 31,which is a Wednesday,is a debit to Wages Expense,$1,800,and a credit to Wages Payable,$1,800.

Indicate whether the following error would cause the adjusted trial balance totals to be unequal.If the error would cause the adjusted trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much. The adjustment for accrued fees of $1,170 was journalized as a debit to Accounts Receivable for $1,170 and a credit to Fees Earned for $1,107.

Accumulated Depreciation and Depreciation Expense are classified,respectively,as

Unearned revenue is a liability.