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Exam 3: The Adjusting Process

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Question 31

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On January 2,Safe Motorcycling Monthly received a check for $72 from a subscriber for a 12-month subscription.The January issue was mailed on January 15.Prepare the necessary entries for the month of January.

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The second entry can be made...

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Question 32

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The type of account and normal balance of Unearned Consulting Fees is

A) revenue,credit
B) expense,debit
C) liability,credit
D) liability,debit

E) B) and D)
F) A) and B)

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Question 33

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On January 2,Dog Mart prepaid $30,000 rent for the year and recorded the prepayment in an asset account.Prepare the January 31 adjusting entry for rent expense.

At the end of the current year,$3,700 fees have been earned but have not been billed to clients.Journalize the adjusting entry to record the accrued fees.

Depreciation Expense is reported on the balance sheet as an addition to the related asset.

How will the following adjusting journal entry affect the accounting equation?

Fees payable would appear on the balance sheet as an

Salaries of $6,400 are paid for a five-day week on Friday.Prepare the adjusting journal entry that is required if the month ends on Thursday.

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

Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded.

A fixed asset's market value is reflected on the balance sheet.

Bloom's Company pays biweekly salaries of $40,000 every other Friday for a ten-day period ending on that day.The last payday of December is Friday, December 27.Assuming the next pay period begins on Monday,December 30,journalize the adjusting entry necessary at the end of the fiscal period December 31.

The balance in the prepaid rent account before adjustment at the end of the year is $32,000,which represents four months' rent paid on December 1.The adjusting entry required on December 31 is

Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the trial balance?

Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.

The unexpired insurance at the end of the fiscal period represents

A company receives $6,500 for two season tickets sold on September 1.If $2,500 is earned by December 31,the adjusting entry made at that time is a debit to Cash,$2,500,and a credit to Ticket Revenue,$2,500.

Under the accrual basis,some accounts in the ledger require updating at the end of the period.Discuss the three main reasons for this updating and give an example of each.

The unearned rent account has a balance of $72,000.If $18,000 of the $72,000 is unearned at the end of the accounting period,the amount of the adjusting entry is

Gizmo Inc.purchased a one-year insurance policy on October 1 for $1,800.The adjusting entry on December 31 would be