FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: Adjusting Accounts and Preparing Financial Statements

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 111

Multiple Choice

Review LaterAdd Note

Review Later

On December 31, Carmack Company received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is:

A) Debit Accounts Payable $215; credit Utilities Expense $215.
B) Debit Prepaid Utilities $215; credit Accounts Payable $215.
C) Debit Prepaid Utilities $215; credit Cash $215.
D) Debit Utilities Expense $215; credit Accounts Payable $215.
E) Debit Utilities Expense $215; credit Prepaid Utilities $215.

F) All of the above
G) None of the above

Correct Answer

verified

Show Answer

Question 112

Multiple Choice

Review LaterAdd Note

Review Later

A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledger balance before any adjustment is $2,100. What is the adjusting entry for office supplies that should be recorded on May 31?

A) Debit Supplies Expense $1,250 and credit Supplies $2,100.
B) Debit Prepaid Supplies $850 and credit Supplies Expense $850.
C) Debit Supplies $1,250 and credit Cash $1,250.
D) Debit Supplies Expense $1,250 and credit Supplies $1,250.
E) Debit Supplies Expense $850 and credit Supplies $850.

F) B) and E)
G) None of the above

Correct Answer

verified

Show Answer

Question 113

True/False

Review LaterAdd Note

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

The cash basis of accounting recognizes revenues when cash payments from customers are received.

All of the following are true regarding prepaid expenses except:

The time period assumption assumes that an organization's activities may be divided into specific reporting time periods including all of the following except:

Identify the primary differences between accrual accounting and cash basis accounting.

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

On April 1, Santa Fe, Inc. paid Griffith Publishing Company $1,548 for 36-month subscriptions to several different magazines. Santa Fe debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. What adjusting entry should be made by Santa Fe, Inc. for the adjustment on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustments had been made?

Describe the two alternate methods used to account for prepaid expenses.

An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $3,000 payment of salaries in January of the following year? A) $\begin{array}{|l|r|r|}\hline \text { Salaries Payable } & 1,200 & \\\hline \text { Salaries Expense } & & 1,200 \\\hline\end{array}$ B) $\begin{array}{|l|r|r|}\hline \text { Salaries Payable } & 1,200 & \\\hline \text { Cash } & & 1,200 \\\hline\end{array}$ C) $\begin{array}{|l|r|r|}\hline \text { Salaries Payable } & 1,200 & \\\hline \text { Salaries Expense } & 1,800 & \\\hline \text { Cash } & & 3,000 \\\hline\end{array}$ D) $\begin{array}{|l|r|r|}\hline \text { Salaries Expense } & 3,000 & \\\hline \text { Cash } & & 3,000 \\\hline\end{array}$ $\begin{array}{l}\text { E) }\\\begin{array} { | l | r | r | } \hline \text { Salaries Payable } & 3,000 & \\\hline \text { Cash } & & 3,000 \\\hline\end{array}\end{array}$

On January 1, Eastern College received $1,200,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28?