Chapter 3 Quiz

Cash received for services not yet rendered is an example of what type of adjustment?
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Terms in this set (30)
Cash received for services not yet rendered is an example of what type of adjustment?
unearned revenue
Correcting entries bring the ledger up to date as a normal part of the accounting cycle.
This statement is False.
Every adjusting entry affects expenses or revenues.
This statement is True.
Insurance paid is an example of what type of adjustment?
prepaid expense
It is customary and necessary for the balances of depreciation expense and accumulated depreciation to be equal in amount.
This statement is False.
On December 31, the end of the current year, $10,000 of fees have been earned but have not been billed to clients. What account should be debited in the journal (1) and for what amount to record the adjusting entry for insurance based on this information?
Cash, $10,000
On December 31, the end of the current year, $10,000 of fees have been earned but have not been billed to clients. What account should be credited in the journal (2) and for what amount to record the adjusting entry for insurance based on this information?
Fees earned, $10,000
Rent revenue earned but not received is an example of what type of adjustment?
accrued revenue
Salaries owed but not yet paid is an example of what type of adjustment?
accrued expense
The balance in the salaries expense account before adjustment on December 31 at the end of the current year is $52,000. The amount of accrued salaries for December 30 and 31 are $500. What account should be debited in the journal (1) and for what amount to record the adjusting entry for accrued salaries based on this information?
Salaries expense, $500
The balance in the salaries expense account before adjustment on December 31 at the end of the current year is $52,000. The amount of accrued salaries for December 30 and 31 are $500. What account should be credited in the journal (2) and for what amount to record the adjusting entry for accrued salaries based on this information?Salaries payable, $500The balance in the supplies account before adjustment on December 31 at the end of the current year is $3,000. The amount of supplies on hand is $500. What account should be debited in the journal (1) and for what amount to record the adjusting entry for supplies based on this information?Supplies expense, $2,500The balance in the supplies account before adjustment on December 31 at the end of the current year is $3,000. The amount of supplies on hand is $500. What account should be credited in the journal (2) and for what amount to record the adjusting entry for supplies based on this information?Supplies, $2,500The balance in the equipment account before adjustment on December 31 at the end of the current year is $60,000 and the balance of accumulated depreciation on December 31 at the end of the current year is $24,000. The adjustment amount for depreciation for the year is $12,000. What account should be debited in the journal (1) and for what amount to record the adjusting entry to record this depreciation based on this information?Depreciation expense, $12,000The balance in the equipment account before adjustment on December 31 at the end of the current year is $60,000 and the balance of accumulated depreciation on December 31 at the end of the current year is $24,000. The adjustment amount for depreciation for the year is $12,000. What account should be credited in the journal (2) and for what amount to record the adjusting entry to record this depreciation based on this information?Accumulated depreciation, $12,000The balance in the prepaid insurance account before adjustment on December 31 at the end of the current year is $5,000. The amount of expired insurance is $2,000. What account should be debited in the journal (1) and for what amount to record the adjusting entry for insurance based on this information?Insurance expense, $2,000The balance in the prepaid insurance account before adjustment on December 31 at the end of the current year is $5,000. The amount of expired insurance is $2,000. What account should be credited in the journal (2) and for what amount to record the adjusting entry for insurance based on this information?Prepaid insurance, $2,000The balance in the unearned rent account before adjustment at end of the current year is $17,890. The amount of unearned fees at the end of the current year is $1,865. What account should be debited in the journal (1) and for what amount to record the adjusting entry for insurance based on this information?Unearned fees, $16,025The balance in the unearned rent account before adjustment at end of the current year is $17,890. The amount of unearned fees at the end of the current year is $1,865. What account should be credited in the journal (2) and for what amount to record the adjusting entry for insurance based on this information?Fees earned, $16,025Under cash-basis accounting, revenues are reported in the period in which cash is received and expenses are reported in the period in which cash is paid.This statement is True.Under which basis of accounting are revenues and expenses reported in the income statement in the period in which they are incurred?accrual basisUnder which concept of accounting are expenses incurred matched with the revenue generated during a period?matching conceptWhat are expenses that have been incurred but not recorded in the accounts called?accrued expensesWhat are items such as supplies that will be used in the business in the future called?prepaid or deferred expensesWhat are journal entries called that bring the accounts up to date at the end of the accounting period?adjusting entriesWhat are revenues that have been earned but not recorded in the accounts called?accrued revenuesWhat is an account offset against another account called?contra accountWhat is the difference between the cost of a fixed asset and its accumulated depreciation called?book valueWhat is the liability created by receiving revenue in advance called?unearned revenueWhat is the systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life called?depreciation