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Exam 3: Adjusting Accounts for Financial Statements

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Question 121

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Use the following partial work sheet from Matthews Lanes to prepare its income statement,statement of changes in retained earnings,and a balance sheet.

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Question 122

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Which of the following accounts would be closed at the end of the accounting period?

A) Accounts Receivable
B) Unearned Consulting Fees
C) Fees Earned
D) Retained Earnings
E) Land

F) A) and C)
G) B) and D)

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Question 123

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Match the following types of accounts with each of the following transactions.

Depreciation expense is an example of an accrued expense.

A landscaping project was completed on December 31,but the customer has not yet been billed for the agreed-upon fee of $12,000.How would the company record the related adjusting entry?

Based on the following information,what would be the ending balance in the Retained Earnings account,assuming all accounts have a normal balance?

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Classified balance sheets commonly include the following categories. Indicate the typical classification of each item listed below by placing the correct balance sheet category in the blank space next to the item.

The main purpose of adjusting entries is to:

Show the December 31 adjusting entry to record $750 of earned but unpaid salaries of employees at the end of the current accounting period.

Shown below are selected data taken from the unadjusted and adjusted trial balances for the Simonson Company for the current year ended December 31.Determine the items A through H below.

Which of the following does not require an adjusting entry at year-end?

A contra account is an account linked with another account; it is added to that account to show the proper net amount for that particular item.

Earned but uncollected revenues that are recorded during the adjusting process with a credit to a revenue account and a debit to an expense account are referred to as accrued expenses.

Prior to recording adjusting entries at the end of an accounting period,some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

Which of the following statements is true?

The calendar year-end adjusted trial balance for Acosta Co.follows: Required: a.Prepare a classified year-end balance sheet.(Note: A $7,000 installment on the long-term note payable is due within one year.) b.Calculate the current ratio.

What is the total amount of current assets based on the following information,assuming all accounts have a normal balance?

A company had service revenue of $250,000,rent expense of $10,000,utility expense of $3,500,salary expense of $18,500,depreciation expense of $9,000,advertising expense of $4,500,dividends in the amount of $18,000,and a beginning balance in retained earnings of $17,900.What is the balance in the income summary account before it is closed for the period?

On January 1,Able Company purchased equipment costing $135,000 with an estimated salvage value of $10,500,and an estimated useful life of five years.Using the straight-line method,what is the amount that should be recorded as depreciation on December 31?