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Exam 3: The Adjusting Process

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Question 41

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The company determines that the interest expense on a note payable for the period ending December 31 is $775. This amount is payable on January 1. Prepare the journal entries required on December 31 and January 1.

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Dec. 31 Interest Exp...

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Question 42

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Adjusting journal entries are dated on the last day of the period.

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Question 43

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Identify the effect a-h) that omitting each of the following items would have on the balance sheet. -No adjustment was made for supplies used up during the month.

On January 1, the Newman Company estimated its property tax to be $5,100 for the year. a) How much should the company accrue each month for property taxes? b) Calculate the balance in Property Tax Payable as of August 31. c) Prepare the adjusting journal entry for September.

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry?

Depreciation on an office building is $2,800. The adjusting entry on December 31 would be $\begin{array} { | c | c | c | c | c | } \hline \text { Date } & \text { Description } & \text { Post. Ref. } & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline\end{array}$

What effect will the following adjusting journal entry have on the accounting records? $\begin{array} { | c | r | r | } \hline \text { Depreciation Expense } & 2,150 & \\\hline \text { Accumulated Depreciation } & & 2,150 \\\hline\end{array}$

If the debit portion of an adjusting entry is to an asset account, then the credit portion must be to a liability account.

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

The financial statements are prepared from the unadjusted trial balance.

Vertical analysis is useful for analyzing financial statement changes over time.

The balance in the unearned fees account, before adjustment at the end of the year, is $10,250. Journalize the adjusting entry required if the amount of unearned fees at the end of the year is $3,125.

On January 1, Great Designs Company had a debit balance of $1,450 in the office supplies account. During the month, Great Designs purchased $115 and $160 of office supplies and journalized them to the asset account upon purchasing. On January 31, an inspection of the office supplies cabinet shows that only $350 of office supplies remains. Prepare the January 31 adjusting entry for office supplies.

The unexpired insurance at the end of the fiscal period represents

Accrued revenues would appear on the balance sheet as

On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.

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 to prepaid insurance to record expired insurance was omitted. Which of the following statements is true?

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.

Adjusting entries affect at least one