Question 1

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-Depreciation on equipment was not recorded.

Accepted Answer

Depreciation expense reduces the book value of assets (equipment, in this case) and decreases net income, which in turn reduces owner's equity. If depreciation is not recorded, both assets and owner's equity would be overstated because the expense that should reduce them is not recognized.

Question 2

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.

Accepted Answer

The answer of Identify the effect (a - h) that...

Question 3

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.​
a) fees received but not yet earned
b) fees earned but not yet received
c) paid premium on a one-year insurance policy
d) property tax owed to be paid beginning of next year

Accepted Answer

The answer of Classify the following items as: (1) prepaid...

Question 4

Match the type of account (a - e) with the business transactions that follow.
-Received 6 months of rental payments from a tenant.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 5

For each of the following, journalize the necessary adjusting entry:
(a)A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that the fiscal period ends (1) on Tuesday, (2) on Wednesday.(b)The balance in the prepaid insurance account before adjustment at the end of the year is $18,000. Journalize the adjusting entry required under each of the following alternatives: (1) the amount of insurance expired during the year is $5,300, (2) the amount of unexpired insurance applicable to a future period is $2,700.(c)On July 1 of the current year, a business pays $54,000 to the city for license taxes for the coming fiscal year. The same business is also required to pay an annual property tax at the end of the year. The estimated amount of the current year's property tax allocated to July is $4,800. (1) Journalize the two adjusting entries required to bring the accounts affected by the taxes up to date as of July 31. (2) What is the amount of tax expense for July?
(d)The estimated depreciation on equipment for the year is $32,000.

Accepted Answer

The answer of For each of the following, journalize the...

Question 6

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available.​  (a) Reconstruct the adjusting entries and give a brief explanation of each.(b) What is the amount of net income?

Accepted Answer

The answer of REM Consulting is completing the accounting information...

Question 7

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-A tenant paid 6 months' rent in advance when he moved in on the first day of the month. No entry was made on the last day of the month.

Accepted Answer

The answer of Identify the effect (a - h) that...

Question 8

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-No adjustment was made for supplies used up during the month.

Accepted Answer

Not adjusting for supplies used up during the month means the supplies asset account remains higher than it should be, overstating assets. Since expenses are understated, net income is overstated, leading to an overstatement of owner's equity.

Question 9

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-An attorney has earned 1/2 of a retainer fee that was received and recorded last month. No adjustment was recorded for the amount earned.

Accepted Answer

The answer of Identify the effect (a - h) that...

Question 10

(a) Explain the differences between accrued revenues and unearned revenues.(b) Explain the differences between accrued expenses and prepaid expenses.(c) Give an example of each.

Accepted Answer

The answer of (a) Explain the differences between accrued revenues...

Question 11

List the four basic types of accounts that require adjusting entries and give an example of each.
1. Prepaid expenses; example: prepaid insurance
2. Unearned revenues; example: an attorney's retainer fee
3. Accrued revenues; example: unpaid interest earned on a note receivable
4. Accrued expenses; example: unpaid wages owed to employees
157. 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.

Accepted Answer

The answer of List the four basic types of accounts...

Question 12

Match the type of account (a - e) with the business transactions that follow.
-Annual depreciation on equipment, recorded on a monthly basis.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 13

Explain the difference between accrual basis accounting and cash basis accounting.

Accepted Answer

The answer of Explain the difference between accrual basis accounting...

Question 14

Match the type of account (a - e) with the business transactions that follow.
-Paid 6 months of rental payments to the landlord.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 15

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-Wages are paid every Friday for the 5-day work week. The month ended on Monday and no adjustment was recorded.

Accepted Answer

The answer of Identify the effect (a - h) that...

Question 16

Match the type of account (a - e) with the business transactions that follow.
-A contract to provide tutoring services beginning next month was signed.
A)Prepaid expense
B)Accrued expense
C)Unearned revenue
D)Accrued revenue
E)None of these

Accepted Answer

The answer of Match the type of account (a -...

Question 17

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

Accepted Answer

The answer of Listed below are accounts to use for...

Question 18

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

Accepted Answer

The answer of Indicate with a Yes or No whether...

Question 19

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-Interest earned on a note receivable was not recorded.

Accepted Answer

By not recording the interest earned on a note receivable, both the asset (note receivable) and owner's equity (interest revenue) will be understated. This will result in an understated total assets and owner's equity on the balance sheet.

Question 20

Identify the effect (a - h) that omitting each of the following items would have on the balance sheet.a.Assets and stockholders' equity overstated
b.Assets and stockholders' equity understated
c.Assets overstated and stockholders' equity understated
d.Assets understated and stockholders' equity overstated
e.Liabilities and stockholders' equity overstated
f.Liabilities and stockholders' equity understated
g.Liabilities overstated and stockholders' equity understated
h.Liabilities understated and stockholders' equity overstated
-Services provided to customers on the last day of the month were not billed.

Accepted Answer

Not billing for services provided results in not recognizing revenue earned, which understates assets (accounts receivable) and owner's equity (retained earnings or owner's capital) because the income that would increase both is not recorded.

Quiz 3: The Adjusting Process

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue. a) fees received but not yet earned b) fees earned but not yet received c) paid premium on a one-year insurance policy d) property tax owed to be paid beginning of next year

Match the type of account (a - e) with the business transactions that follow. -Received 6 months of rental payments from a tenant. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. (a) Reconstruct the adjusting entries and give a brief explanation of each.(b) What is the amount of net income?

(a) Explain the differences between accrued revenues and unearned revenues.(b) Explain the differences between accrued expenses and prepaid expenses.(c) Give an example of each.

Match the type of account (a - e) with the business transactions that follow. -Annual depreciation on equipment, recorded on a monthly basis. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Explain the difference between accrual basis accounting and cash basis accounting.

Match the type of account (a - e) with the business transactions that follow. -Paid 6 months of rental payments to the landlord. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Match the type of account (a - e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

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

Quiz 3: The Adjusting Process

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.​ a) fees received but not yet earned b) fees earned but not yet received c) paid premium on a one-year insurance policy d) property tax owed to be paid beginning of next year

Match the type of account (a - e) with the business transactions that follow. -Received 6 months of rental payments from a tenant. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available.​ (a) Reconstruct the adjusting entries and give a brief explanation of each.(b) What is the amount of net income?

(a) Explain the differences between accrued revenues and unearned revenues.(b) Explain the differences between accrued expenses and prepaid expenses.(c) Give an example of each.

Match the type of account (a - e) with the business transactions that follow. -Annual depreciation on equipment, recorded on a monthly basis. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Explain the difference between accrual basis accounting and cash basis accounting.

Match the type of account (a - e) with the business transactions that follow. -Paid 6 months of rental payments to the landlord. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Match the type of account (a - e) with the business transactions that follow. -A contract to provide tutoring services beginning next month was signed. A)Prepaid expense B)Accrued expense C)Unearned revenue D)Accrued revenue E)None of these

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

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

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue. a) fees received but not yet earned b) fees earned but not yet received c) paid premium on a one-year insurance policy d) property tax owed to be paid beginning of next year

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. (a) Reconstruct the adjusting entries and give a brief explanation of each.(b) What is the amount of net income?