on December 31 of the current year for Olive would include: The adjusting entry on December 31 of the current year for Olive would include: A debit to an expense and a credit to a prepaid expense for $1,925. The Net Income for the year is: $89,800 A debit to a prepaid expense and a credit to Cash for $5,775. A debit to a prepaid expense and a credit to Cash for $7,500. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). And if paym Q:The current ratio is: The Retained earnings account has a credit balance of $46,000 before closing entries are made. \text{Deferred tax liability}& 18& 15\\ On February 28, $750 of insurance expense must be recorded. The current ratio is used to help assess a company's ability to pay its debts in the near Human resources is primarily concerned with the training of employees when it serves the best interest of the company. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 25000 Debit Salaries expense $23,000 method of inventory valuation? 2 The company's annual accounting period ends on December 31. The work sheet is a required report made available to external decision makers. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. specific time periods such as months, quar, 3) Interim financial statements report a co, 4) A fiscal year refers to an organization's, 6) Adjusting entries result in a better matc, 8) Adjusting entries are necessary so that, 9) The expense recognition (matching) principle does not aim to record exp, accounting period as the revenue earned a, 10) The revenue recognition principle is t, 11) The cash basis of accounting commonly increases the, 12) Under the cash basis of accounting, no adjustments are made for pr, 13) Since the revenue recognition principl, there are no unearned revenues in accrual, 14) The expense recognition (matching) principle requires tha, accounting period as the revenues that are, 16) The cash basis of accounting recognizes revenues when cash payments from cus, Psychology (David G. Myers; C. Nathan DeWall), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Give Me Liberty! All necessary amounts needed to prepare the income statement can be taken from the E) Income statement accounts. The company's annual accounting period ends on December 31. Become Premium to read the whole document. E) Equipment. Ending Balance, 31 Dec On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. C) The expense recognition (matching) principle. On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? The adjusting entry on December 31 of the current year for Olive would include: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Total sheet. contract services in April and billed the customer. Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the Find answers to questions asked by students like you. Total revenues $195,000 An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income , resources priorities training? B) A debit to an expense and credit to Cash for $7,500. It in Q:12,500 A) A debit to an expense and credit to a prepaid expense for $7,500. 1) A company's fiscal year must correspond with the calendar year. A company purchased new furniture at a cost of $34,000 on September 30. Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. It is acceptable to record prepayment of expenses as debits to expense accounts if an All rights reserved. Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. the expense accounts, and the dividends account to retained earnings. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. A) Items that require contra accounts. What amount should appear in the Prepaid Subscription account for Otisco, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made? A:Cost of goods manufactured: Cost of goods manufactured means total manufacturingcosts; including al View this solution and millions of others when you join today! $33,400 Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? h. Shareholders were paid cash dividends of $30 million.\. Copyright 2019 McGraw-Hill Education. E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. B) 117%. The balance in the supplies account, before adjustment at the end of the year, is 5,330. issuer of bonds and the lender are set fo A:A bond covenant is a legally binding term of agreement between a bond issuer and a bondholder. Dividends 23,400, $202,800 was purchased during the period? $10,000. All rights reserved. Recording revenues early overstates current-period income; recording revenues late Accrued revenues: You'll get a detailed solution from a subject matter expert that helps you learn core concepts. If Bojana Tax Services' office supplies account balance on March 1 was $1,050, the company purchased $600 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,250 unused, what is the amount of the adjusting entry for office supplies on March 31? Revenue accounts are temporary accounts that should begin each accounting period with Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. on October 1, at a monthly rate of $800. What was the scale factor used? hand. A) Accumulated depreciation. period. C) Assigning expenses to the periods in which they are incurred. a. On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year perlod beginning July 1. \text{For Year Ended December 31, 2021}\\ Show the impact that these transactions had. C) Time period assumption. The retained earnings account before closing had a balance of $314,000. The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. A) Store fixtures. Debit Income Summary $44,300; credit Expense accounts $44,300. \text{Investment revenue} &15\\ The adjusting entry on December 31 of the current year for Olive would include: 1 See answer Multiple Choice All rights reserved. The cash basis of accounting recognizes revenues when cash payments from customers are c. focusing solely on the morality of an issue. A company owes its employees $5,000 for the year ended December 31. C) Accrued revenue. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. A company had $6,992,000 in net income for the year. Accrued expenses at the end of one accounting period are expected to result in cash What is the correct closing entry for the revenue accounts? The prepaid insurance account had a balance of 7,000 at the beginning of the year. are earned and matching expenses to those revenues is: Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. from period to period. E) Revenue basis accounting. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. In preparing statements from the adjusted trial balance, the balance sheet must be prepared The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. A company's post-closing trial balance has total debits of $40,560 and total credits of First week only $4.99! $150,000 Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending D) Profit margin is calculated by dividing net income by net sales. Income Summary is a temporary account only used for the closing process. 13 The adjusting entry on December 31 of the current year for Olive would include: Multiple Choice A credit to a liability and a debit to a prepaid expense for $1,925. $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. contract. 11 Additional information from NICs accounting records is provided also. . B) Assigning revenues to the periods in which they are earned. A post-closing trial balance is a list of permanent accounts and their balances from the The earned a net income of $4,000. is called Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution On July 1 Olive should record:
Adjusting entries are made after the preparation of financial statements. gal business On December 31, $75 worth of office supplies remained. Net income $110,000 Adjusting entries made at the end of an accounting period accomplish all of the following C) $4,000. \end{array} E) Affect only equity accounts. Flo's Flowers' current ratio is 1. supplies is $3,200. On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. balance of $400. A). On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. 36600 B) $21,000. C) 33%. A company records the fees for legal services paid in advance by its clients in an account After closing entries are posted, what will be the balance in the Retained earnings account? \text{Liabilities}\\ All rights reserved. < Prev employees on January 6 for the previous two weeks' salaries. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. 18,750 \text{Accounts receivable} &181 &170\\ understates current period income. 2. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. Depreciation expense is an example of an accrued expense. During the closing process, Retained Earnings is closed to the Dividends account. Debit Income Summary $196,000; credit Revenues $196,000. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; General Ledger balance Supplies on hand = Supplies used This indicates that Flo's can cover its short term liabilities with its short term assets. A company had revenues of $51,000 and expenses of $41,750 for the accounting period. \text{Trademark} &24 &25\\ consultant service Total expenses 93,600 E) An overstatement of assets. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. All rights reserved. f. $130 million of bonds were retired at maturity. Recording expenses early overstates current-period income; recording expenses late The company's annual accounting period ends on December 31, and adjustments are only made at year-end. e. striving for perfection. the same period. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is: On January 1, Eastern College received $1,370,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. b. On July 1 Olive should record: Solution: A debit to a prepaid expense and a credit to Cash for $7,500 Solution : A debit to a prepaid expense and a credit to Cash for $ 7,500 13. Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,600 payment of salaries in January of the following year? Some undamaged sections were sold for$3 million. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. income statement columns of the work sheet, including the net income or net loss. Revenue and expense balances are transferred from the adjusted trial balance to the income D) An asset on the balance sheet. 20 B) Prepaid expenses. columns, a net loss is indicated. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A:Special-order decisions are the business decisions in which management has to accept or reject a spe Q:Under the effective-interest method of bond discount or premium A) A debit to an expense and a credit to a prepaid expense for $5,625. In Q:Freddy is a director of Ace Finance Ltd. 1 Under the effective interest method , the bond is recognized using the pres Q:4. Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and income under the accrual basis of accounting is: On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. books of Kingsley Ltd.: A company paid $9,000 for a twelve-month insurance policy on February 1. D) Result in a debit to a liability and a credit to an asset account. 49,500 How much depreciation expense will be recorded for the Interest is paid when the loan matures one year from the issue date. A company purchased a new delivery van at a cost of $45,000 on July 1. ledger after all closing entries are journalized and posted. What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? The total amount of depreciation recorded against an asset over the entire time the asset has Credit Cash $23,000. A company's Office Supplies account shows a beginning balance of $600 and an ending Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. All necessary amounts to prepare the balance sheet, including ending retained earnings, can D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. Retained earnings 124,800 The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. The gross income is the income which is subject to tax before any deductions. 60, A:Net Operating Income: C) An unearned revenue on the income statement. \text{Gain on sale of investments} &5 &\$ 340\\ During the period, the company completed $3,500 of the agreed-on services for the client. Based on the information provided, A. Boots \text{Income before tax} &42\\ \text{Bonds payable}&145 &275\\ Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. B) A debit to Fees Earned and a credit to Unearned Fees for $500. Adjusting entries are designed primarily to correct accounting errors. not in helping to prepare interim financial statements. Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. $250,000 0.12 60/360 = $5,000. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. D) $25,000. A:Gross Income -It is the total income from all sources i.e. Actual price per meter = $382,500/62,500 m The Dividends account is normally closed by debiting it. On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. $400 Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. B) A contra account. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. \text{Land} &150 &150\\ After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. An account linked with another account that has an opposite normal balance and is end of the accounting period. Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues E) Debit Salaries Expense $400 and credit Cash $400. D) 217%. On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a record the salaries earned but unpaid is: Accrued revenues at the end of one accounting period are expected to result in cash receipts The steps in the closing process are (1) close credit balances in revenue accounts to Income Its B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. Dividends of $5,600 were paid in cash during the same period. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of unexpired insurance related to future periods is 5,600. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the It represents compa Q:Salary of employee [ Choose] Adjusting entries are made after the preparation of financial statements. The ending retained earnings balance after closing is: $361,400 called Unearned Legal Fees. Describe how to compute the standard deviation of a discrete random variable, and interpret what this quantity tells us about the observed values of the random variable. services required by the contract were completed. C) $13,000. B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. $837.00 Adjusting entries result in a better matching of revenues and expenses for the period. The closing process is a step in the accounting cycle that prepares accounts for the next $7,500/2 = $3,750 per month. fees had been earned. balance of $2,500. substitute for the set of financial statements. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on Pong Incorporated's income statement for the most recent month is given below. A work sheet contains all of the balances for each account and therefore may be used as a The industry average for the current ratio is 1. d. the repression of disturbing thoughts. Profit margin is defined as: 129 A:Interest Income -It is the amount of money paid by the borrower to the lenders on the amount of mon Q:Selected data concerning the past years operations of the Beachwear Manufacturing Company are as fo A:Cost of Raw Material Purchased: In the fundamental production and manufacture of items, raw material Q:Compute for the net sales that would be reported in LIVA company's Income Statemen. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) An overstatement of equity. \text{NATIONAL INTERCABLE COMPANY}\\ E) Assuring that external transaction amounts remain unchanged. regardless of when the goods or services are provided. All rights reserved. $40,650. E) Expired portion of prepaid insurance. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Direct materia A:Given details: not show correct balances even though all transactions were properly recorded. Depreciation measures the decline in market value of an asset. Instructions 1. A:1. Payment/Fee of tax It can also be referred as financial repor. this A:Answer 1 : Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. Q:5. E) An accrued account. A debit to an expense and a credit to a prepaid expense for $1,925. The note receivable plus interest will not be collected until March 1 of the following year. Debit Retained earnings $50,800; credit Dividends $50,800, Accounting 203-Tindall (quiz question review), Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder. B) Cause an adjustment to prior expense to be overstated and assets to be understated. What is the adjusting entry for office supplies that should be recorded on May 31? The accrual basis of accounting: of the opinions highlighted in the case study. subtracted from the balance of the related account is a(n): . B) Cost principle. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but 8 $5,200 2/4 = $2,600. A) Record external transactions and events. On July 1 of the current calendar year, Plum Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. Accrual accounting states that both revenues and expenses must be recorded during the periods that they actually occur, and not necessarily when any cash transfer is associated to them. The retained earnings account before closing had a balance of $303,000. D) Debit Salaries Expense and credit Salaries Payable. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year? It is considering switching to the ABC A:Activity based costing(ABC method) : D) $6,750. C) Cause an accrued liability account to exist. The time period assumption assumes that an organization's activities can be divided into Because it is a necessary financial statement, the work sheet must be prepared according to The adjusting entry would include a $2,800 debit to Supplies.