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Exam 3: The Adjusting Process

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Question 71

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The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

A) Record payment of fees earned
B) Record fees earned at the end of the month
C) Record fees that have not been earned at the end of the month
D) Record payment of fees to be earned.

E) A) and B)
F) A) and C)

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Question 72

Multiple Choice

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What effect will the following adjusting journal entry have on the accounting records?

A) Increase net income
B) Increase revenues
C) Decrease expenses
D) Decrease net book value

E) A) and B)
F) A) and C)

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Question 73

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The updating of accounts is called the adjusting process.

Protonix Corp has a payroll of $8,000 for a five-day workweek. Its employees are paid each Friday for the five-day workweek. The adjusting entry on December 31, 2015 assuming the year ends on Thursday would be:

Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances, require an adjusting entry. 1. Cash 2. Prepaid Expenses 3. Depreciation Expense 4. Accounts Payable 5. Accumulated Depreciation 6. Equipment

Adjusting entries are

Prior to the adjusting process, accrued expenses have

When is the adjusted trial balance prepared?

Adjusting entries affect at least one

Prepare adjusting entries for the following transactions:

Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n)

The prepaid insurance account had a beginning balance of $6,600 and was debited for $2,300 of premiums paid during the year. Journalize the adjusting entry required at the end of the year assuming the amount of unexpired insurance related to future periods is $4,100.

The supplies account has a balance of $2,100 at the beginning of the year and was debited during the year for $2,300, representing the total of supplies purchased during the year. If $400 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is

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

A contra asset account for Land will normally appear in the balance sheet.

Which of the following pairs of accounts could not appear in the same adjusting entry?

The difference between the balance of a fixed asset account and the balance of its related accumulated depreciation account is termed the book value of the asset.

The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.

A company pays $36,000 for twelve month's rent on October 1. The adjusting entry on December 31 is debit Rent Expense, $9,000 and credit Prepaid Rent, $9,000.

Which of the accounting steps in the accounting process below would be completed last?