Question: A company makes an accrued revenue adjusting

> The adjustments columns of the worksheet for Mears Company are shown below. Instructions (a) Prepare the adjusting entries. (b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each

> Worksheet data for Goode Company are presented in E4-2. Data for E 4-2: Instructions (a) Journalize the closing entries at April 30. (b) Post the closing entries to Income Summary and T. Goode, Capital. Use T accounts. (c) Prepare a post-closing trial

> Worksheet data for Goode Company are presented in E4-2.The owner did not make any additional investments in the business in April. Instructions Prepare an income statement, an owner’s equity statement, and a classified balance sheet.

> The following selected accounts appear in the adjusted trial balance columns of the worksheet for Batan Company: Accumulated Depreciation; Depreciation Expense; N. Batan, Capital; N. Batan, Drawing; Service Revenue; Supplies; and Accounts Payable. Indica

> The adjusted trial balance columns of the worksheet for Goode Company are as follows. Instructions Complete the worksheet. GOODE COMPANY Worksheet (partial) for the Month Ended April 30, 2010 Adjusted Trial Balance Income Statement Balance Sheet Acco

> The steps in using a worksheet are presented in random order below. List the steps in the proper order by placing numbers 1–5 in the blank spaces. (a) _____ Prepare a trial balance on the worksheet. (b) _____ Enter adjusted balances. (c) _____ Extend adj

> The trial balance columns of the worksheet for Briscoe Company at June 30, 2010, are as follows. Other data: 1. A physical count reveals $300 of supplies on hand. 2. $100 of the unearned revenue is still unearned at month-end. 3. Accrued salaries are $28

> Why do accrual-basis financial statements provide more useful information than cash-basis statements?

> At Natasha Company, prepayments are debited to expense when paid, and unearned revenues are credited to revenue when received. During January of the current year, the following transactions occurred. Jan. 2 Paid $1,800 for fire insurance protection for t

> The following data are taken from the comparative balance sheets of Girard Billiards Club, which prepares its financial statements using the accrual basis of accounting. Fees are billed to members based upon their use of the club’s fa

> The following situations involve accounting principles and assumptions. 1. Grossman Company owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Grossman reports the buildings at m

> The adjusted trial balance for Garcia Company is given in E3-13. Instructions Prepare the income and owner’s equity statements for the year and the balance sheet at August 31. GARCIA COMPANY Trial Balance August 31, 2010 Before Aft

> The trial balances before and after adjustment for Garcia Company at the end of its fiscal year is presented below. Instructions Prepare the adjusting entries that were made. GARCIA COMPANY Trial Balance August 31, 2010 Before After Adjustment Adjus

> Selected accounts of Tabor Company are shown below. Instructions After analyzing the accounts, journalize (a) the July transactions and (b) the adjusting entries that were made on July 31. (Hint: July transactions were for cash.) Supplies Expense

> A partial adjusted trial balance of Sila Company at January 31, 2010, shows the following. Instructions Answer the following questions, assuming the year begins January 1. (a) If the amount in Supplies Expense is the January 31 adjusting entry, and $500

> The trial balance for Pioneer Advertising Agency is shown in Illustration 3-3, p. 100. In lieu of the adjusting entries shown in the text at October 31, assume the following adjustment data. 1. Advertising supplies on hand at October 31 total $500. 2. Ex

> Andy Wright, D.D.S., opened a dental practice on January 1, 2010. During the first month of operations the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $875 of such services was earned

> The trial balance of Bair Company includes the following balance sheet accounts. Identify the accounts that may require adjustment. For each account that requires adjustment, indicate (a) the type of adjusting entry (prepaid expenses, unearned revenues,

> The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. An analysis of the accounts shows the following. 1. The equipment depreciates $400 per month. 2. One-t

> Affleck Company accumulates the following adjustment data at December 31. 1. Services provided but not recorded total $750. 2. Store supplies of $300 have been used. 3. Utility expenses of $225 are unpaid. 4. Unearned revenue of $260 has been earned. 5.

> Drew Carey Company has the following balances in selected accounts on December 31, 2010. Accounts Receivable ………………………………….…………………. $ -0- Accumulated Depreciation—Equipment ….…….……………………-0- Equipment …………………………………………………………………. 7,000 Interest Payable …………

> Larry Smith, president of Smith Company, has instructed Ron Rivera, the head of the accounting department for Smith Company, to report the company’s land in the company’s accounting reports at its market value of $170,000 instead of its cost of $100,000.

> Emeril Corporation encounters the following situations: 1. Emeril collects $1,000 from a customer in 2010 for services to be performed in 2011. 2. Emeril incurs utility expense which is not yet paid in cash or recorded. 3. Emeril’s employees worked 3 day

> On numerous occasions, proposals have surfaced to put the federal government on the accrual basis of accounting. This is no small issue. If this basis were used, it would mean that billions in unrecorded liabilities would have to be booked, and the feder

> Nunez Company accumulates the following adjustment data at December 31. Indicate (a) the type of adjustment (prepaid expense, accrued revenues and so on), and (b) the status of accounts before adjustment (overstated or understated). 1. Supplies of $100

> Jo Seacat has prepared the following list of statements about the time period assumption. 1. Adjusting entries would not be necessary if a company’s life were not divided into artificial time periods. 2. The IRS requires companies to file annual tax retu

> The ledger of Dey Company includes the following accounts. Explain why each account may require adjustment. (a) Prepaid Insurance (c) Unearned Revenue (b) Depreciation Expense (d) Interest Payable

> (a) Who are internal users of accounting data? (b) How does accounting provide relevant data to these users?

> The accounts in the ledger of Sanford Delivery Service contain the following balances on July 31, 2010. Accounts Receivable $ 7,642 Prepaid Insurance $1,968 Accounts Payable 8,396 Repair Expense 961 Cash? Service Revenue 10,610 Delivery Equipment 49,360

> The bookkeeper for Sam Kaplin Equipment Repair made a number of errors in journalizing and posting, as described below. 1. A credit posting of $400 to Accounts Receivable was omitted. 2. A debit posting of $750 for Prepaid Insurance was debited to Insura

> Selected transactions for Tina Cordero Company during its first month in business are presented below. Sept. 1 Invested $10,000 cash in the business. 5 Purchased equipment for $12,000 paying $5,000 in cash and the balance on account. 25 Paid $3,000 cash

> Presented below and on the next page is the ledger for Heerey Co. Instructions (a) Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20, and provide explanations for each. (b) Determine the October 31 balance for eac

> (a) The following are users of financial statements. ______Customers ______Securities and Exchange Commission ______Internal Revenue Service ______Store manager ______Labor unions ______Suppliers ______Marketing manager ______Vice-president of f

> The T accounts below summarize the ledger of Simon Landscaping Company at the end of the first month of operations. Instructions (a) Prepare the complete general journal (including explanations) from which the postings to Cash were made. (b) Prepare a t

> In alphabetical order below are balance sheet items for Lopez Company at December 31, 2010. Kim Lopez is the owner of Lopez Company. Prepare a balance sheet, following the format of Illustration 1-9. Accounts payable…………………..$90,000 Accounts receivable…

> Presented below are three transactions. Mark each transaction as affecting owner’s investment (I), owner’s drawings (D), revenue (R), expense (E), or not affecting owner’s equity (NOE). _______ (a) Received cash for services performed _______ (b) Paid ca

> Classify each of the following items as owner’s drawing (D), revenue (R), or expense (E). _______ (a) Advertising expense _______ (e) Bergman, Drawing _______ (b) Commission revenue _______ (f) Rent revenue _______ (c) Insurance expense _______ (g)

> Follow the same format as BE1-6 on the previous page. Determine the effect on assets, liabilities, and owner’s equity of the following three transactions. (a) Invested cash in the business. (b) Withdrawal of cash by owner. (c) Received cash from a custom

> Presented below are three business transactions. On a sheet of paper, list the letters (a), (b), (c) with columns for assets, liabilities and owner’s equity. For each column, indicate whether the transactions increased (+), decreased (-), or had no effec

> Indicate whether each of the following items is an asset (A), liability (L), or part of owner’s equity (OE). _______ (a) Accounts receivable _______ (d) Office supplies _______ (b) Salaries payable _______ (e) Owner’s investment _______(c) Equipment

> Use the expanded accounting equation to answer each of the following questions: (a) The liabilities of Cai Company are $90,000. Meiyu Cai’s capital account is $150,000; drawings are $40,000; revenues, $450,000; and expenses, $320,000. What is the amount

> Rick Marsh, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Marsh’s law firm prepares monthly financial statements, when should it recognize revenue from this engagement? Why?

> Selected transactions from the journal of Teresa Gonzalez, investment broker, are presented below. Instructions (a) Post the transactions to T accounts. (b) Prepare a trial balance at August 31, 2010. Date Account Titles and Explanation Ref. Debit C

> Why is it possible to prepare financial statements directly from an adjusted trial balance?

> “An adjusting entry may affect more than one balance sheet or income statement account.” Do you agree? Why or why not?

> State two generally accepted accounting principles that relate to adjusting the accounts.

> One-half of the adjusting entry is given below. Indicate the account title for the other half of the entry. (a) Salaries Expense is debited. (b) Depreciation Expense is debited. (c) Interest Payable is credited. (d) Supplies is credited. (e) Accounts Rec

> For each of the following items before adjustment, indicate the type of adjusting entry (prepaid expense, unearned revenue, accrued revenue, and accrued expense) that is needed to correct the misstatement. If an item could result in more than one type of

> On January 9, a company pays $5,000 for salaries, of which $2,000 was reported as Salaries Payable on December 31. Give the entry to record the payment.

> A company fails to recognize an expense incurred but not paid. Indicate which of the following accounts is debited and which is credited in the adjusting entry: (a) asset, (b) liability, (c) revenue, or (d) expense.

> A company fails to recognize revenue earned but not yet received. Which of the following accounts are involved in the adjusting entry: (a) asset, (b) liability, (c) revenue, or (d) expense? For the accounts selected, indicate whether they would be de

> What is the debit/credit effect of an unearned revenue adjusting entry?

> Selected journal entries for the Finney Company are presented in BE2-7. Post the transactions using the standard form of account. Reference Data BE 2-8: J1 Account Titles and Explanation Ref. Debit Credit Date May 5 Accounts Receivable 5,000 Service

> Shinn Company purchased equipment for $18,000. By the current balance sheet date, $6,000 had been depreciated. Indicate the balance sheet presentation of the data.

> “Depreciation is a valuation process that results in the reporting of the fair market value of the asset.” Do you agree? Explain.

> Indicate whether the following accounts generally will have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries. (1) Cash. (4) Accounts Payable. (2) Accounts Receivable. (5) Salaries Expense. (3) Owner’s Drawing. (6)

> For the following transactions, indicate the account debited and the account credited. (a) Supplies are purchased on account. (b) Cash is received on signing a note payable. (c) Employees are paid salaries in cash.

> Indicate whether each of the following accounts is an asset, a liability, or an owner’s equity account and whether it has a normal debit or credit balance: (a) Accounts Receivable, (b) Accounts Payable, (c) Equipment, (d) Owner’s Drawing, (e) Supplies.

> State the rules of debit and credit as applied to (a) asset accounts, (b) liability accounts, and (c) the owner’s equity accounts (revenue, expenses, owner’s drawing, and owner’s capital).

> Maria Alvarez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable. Is Maria correct? Discuss.

> Describe a compound entry, and provide an example.

> What are the normal balances for PepsiCo’s Cash, Accounts Payable, and Interest Expense accounts?

> Two students are discussing the use of a trial balance. They wonder whether the following errors, each considered separately, would prevent the trial balance from balancing. (a) The bookkeeper debited Cash for $600 and credited Wages Expense for $600 for

> Josie Feeney has prepared the following list of statements about the general ledger. 1. The general ledger contains all the asset and liability accounts, but no owner’s equity accounts. 2. The general ledger is sometimes referred to as simply the ledger.

> Jim Benes is confused about how accounting information flows through the accounting system. He believes the flow of information is as follows. (a) Debits and credits posted to the ledger. (b) Business transaction occurs. (c) Information entered in the jo

> (a) When entering a transaction in the journal, should the debit or credit be written first? (b) Which should be indented, the debit or credit?

> Listed below are some items found in the financial statements of Alex Greenspan Co. Indicate in which financial statement(s) the following items would appear. (a) Service revenue. (b) Equipment. (c) Advertising expense. (d) Accounts receivable. (e) Alex

> Indicate how the following business transactions affect the basic accounting equation. (a) Paid cash for janitorial services. (b) Purchased equipment for cash. (c) Invested cash in the business. (d) Paid accounts payable in full.

> The account number is entered as the last step in posting the amounts from the journal to the ledger. What is the advantage of this step?

> Describe the parts of a T account.

> Which of the following items are liabilities of Stanley Jewelry Stores? (a) Cash. (b) Accounts payable. (c) Drawings. (d) Accounts receivable. (e) Supplies. (f ) Equipment. (g) Salaries payable. (h) Service revenue. (i) Rent expense.

> (a) Define the terms assets, liabilities, and owner’s equity. (b) What items affect owner’s equity?

> What is the basic accounting equation?

> What are the basic steps in the recording process?

> Selected transactions for the Finney Company are presented in journal form below. Post the transactions to T accounts. Make one T account for each item and determine each account’ sending balance. J1 Account Titles and Explanation R

> What are the three basic forms of business organizations for profit-oriented enterprises?

> What is the economic entity assumption?

> What is the monetary unit assumption?

> What is the normal balance for each of the following accounts? (a) Accounts Receivable. (b) Cash. (c) Owner’s Drawing. (d) Accounts Payable. (e) Service Revenue. (f) Salaries Expense. (g) Owner’s Capital.

> “Bookkeeping and accounting are the same.” Do you agree? Explain.

> What uses of financial accounting information are made by (a) investors and (b) creditors?

> Jeff Hiller, a fellow student, contends that the double entry system means each transaction must be recorded twice. Is Jeff correct? Explain.

> “The terms debit and credit mean increase and decrease, respectively.” Do you agree? Explain.

> “Accounting is ingrained in our society and it is vital to our economic system.” Do you agree? Explain.

> What internal control objectives are met by physical controls?

> Rowand Enterprises had the following selected transactions. 1. Aaron Rowand invested $4,000 cash in the business. 2. Paid office rent of $1,100. 3. Performed consulting services and billed a client $5,200. 4. Aaron Rowand withdrew $700 cash for personal

> At the corner grocery store, all sales clerks make change out of one cash register drawer. Is this a violation of internal control? Why?

> “Internal control is concerned only with enhancing the accuracy of the accounting records.” Do you agree? Explain.

> Identify and describe the five components of a good internal control system.

> Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

> Jacobs Department Stores has just installed new electronic cash registers in its stores. How do cash registers improve internal control over cash receipts?

> What principle(s) of internal control is (are) involved in making daily cash counts of over-the-counter receipts?

> McCartney Fertilizer Co. owns the following assets at the balance sheet date. Cash in bank savings account…………………. $ 8,000 Cash on hand…………………………………………….…850 Cash refund due from the IRS……………………. 1,000 Checking account balance…………………………12,000 Postdated c

> The management of Sewell Company asks you, as the company accountant, to explain (a) the concept of reasonable assurance in internal control and (b) the importance of the human factor in internal control.

> (a) Explain the control principle of independent internal verification. (b) What practices are important in applying this principle?

> A local bank reported that it lost $150,000 as the result of an employee fraud. Randal Smith is not clear on what is meant by an “employee fraud.” Explain the meaning of fraud to Randal and give an example of frauds that might occur at a bank.

> Konerko Industries had the following transactions. 1. Borrowed $5,000 from the bank by signing a note. 2. Paid $2,500 cash for a computer. 3. Purchased $700 of supplies on account. Instructions (a) Indicate what accounts are increased and decreased by e

> How does an enterprise resource planning (ERP) system differ from an entry-level computerized accounting system?

> What are common features of computerized accounting packages beyond recording transactions and preparing financial statements?

> What transactions might be included in a multiple-column purchases journal that would not be included in a single column purchases journal?