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Exam 3: The Adjusting Process

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Question 61

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On January 2, Safe Boating Monthly received a check for $96 from a subscriber for a 12-month subscription. The January issue was mailed on January 15th. Prepare the necessary entries for the month of January.

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The second entry can be made...

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Question 62

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The updating of accounts is called the adjusting process.

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Question 63

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Prior to the adjusting process,accrued revenue has

A one-year insurance policy was purchased on October 1,2011 for $4,200.The adjusting entry on December 31,2011 would be

The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is

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 account type and normal balance of Prepaid Expense is

Deferrals are recorded transactions that delay the recognition of an expense or revenue.

The balance in the supplies account,before adjustment at the end of the year is $6,250.The proper adjusting entry if the amount of supplies on hand at the end of the year is $1,500 would be

Which of the following is the proper adjusting entry,based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000,for the fiscal year ending on April 30?

On April 30,a business estimates depreciation on equipment used during the first year of operations to be $2,900.(a)Journalize the adjusting entry required as of April 30.(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 April 30?

If the adjustment for accrued salaries at the end of the period is inadvertently omitted,both liabilities and stockholders' equity will be understated for the period.

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.

Classify the following items as:

The Accumulated Depreciation's account balance is the sum of the depreciation expense recorded in past periods.

If there is a balance in the unearned subscriptions account after adjusting entries are made,it represents a(n)

The revenue recognition concept

Adjusting entries are

Accumulated Depreciation is reported on the income statement.

On March 1,a business paid $3,600 for a twelve month liability insurance policy.On April 1 the same 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