Podcast
Questions and Answers
What is the total amount credited to Retained Earnings for the closing entries on December 31?
What is the total amount credited to Retained Earnings for the closing entries on December 31?
- $24,200 (correct)
- $23,600
- $400
- $23,000
What was the net income for the year based on the closing entries provided?
What was the net income for the year based on the closing entries provided?
- $23,000 thousand
- $1,000 thousand
- $24,200 thousand
- $1,200 thousand (correct)
What amount of dividends was recorded in the closing entries?
What amount of dividends was recorded in the closing entries?
- $400 thousand (correct)
- $23,000 thousand
- $1,200 thousand
- $600 thousand
Which of the following expenses is listed with the highest amount in the closing entries?
Which of the following expenses is listed with the highest amount in the closing entries?
What is the closing balance of Retained Earnings after the entries?
What is the closing balance of Retained Earnings after the entries?
On what date was the first recorded entry in the Cash account?
On what date was the first recorded entry in the Cash account?
What was the total balance of Accounts Receivable at the end of the period?
What was the total balance of Accounts Receivable at the end of the period?
Which account had an adjustment of $600 recorded?
Which account had an adjustment of $600 recorded?
What was the total amount debited to Cash from January 2 through January 18?
What was the total amount debited to Cash from January 2 through January 18?
Which account was credited for a total of $6,900 throughout the transactions from January 2 to January 18?
Which account was credited for a total of $6,900 throughout the transactions from January 2 to January 18?
How much was recorded as Rent Expense on January 2?
How much was recorded as Rent Expense on January 2?
Which account is affected by the transaction on January 4 regarding furniture?
Which account is affected by the transaction on January 4 regarding furniture?
What is the total amount of supplies purchased on January 5?
What is the total amount of supplies purchased on January 5?
What type of revenue is indicated by the entry on January 9?
What type of revenue is indicated by the entry on January 9?
What expense was recorded on January 12?
What expense was recorded on January 12?
What amount is recorded as Accounts Receivable on January 18?
What amount is recorded as Accounts Receivable on January 18?
What is the total amount of expenses reported in the income statement?
What is the total amount of expenses reported in the income statement?
How much was the salary payable at the end of the period?
How much was the salary payable at the end of the period?
Which expense accounted for the largest amount in the income statement?
Which expense accounted for the largest amount in the income statement?
What is the net income for Web Marketing Services Inc. for January?
What is the net income for Web Marketing Services Inc. for January?
What amount was recorded as accumulated depreciation for furniture?
What amount was recorded as accumulated depreciation for furniture?
Which expense corresponds to the accumulated depreciation of equipment?
Which expense corresponds to the accumulated depreciation of equipment?
What is the total service revenue reported in the income statement?
What is the total service revenue reported in the income statement?
How much was the supplies expense recorded?
How much was the supplies expense recorded?
What is the total sales revenue reported under the accrual basis?
What is the total sales revenue reported under the accrual basis?
What are the accounts receivable and accounts payable reported on the cash basis?
What are the accounts receivable and accounts payable reported on the cash basis?
When should the $20,000 in wages be recorded according to accrual accounting?
When should the $20,000 in wages be recorded according to accrual accounting?
What is the key principle of revenue recognition in accrual accounting?
What is the key principle of revenue recognition in accrual accounting?
How much should the insurance expense be adjusted based on the provided information?
How much should the insurance expense be adjusted based on the provided information?
What factor is used to determine when to record utility expenses?
What factor is used to determine when to record utility expenses?
Under which basis of accounting would accounts receivable be reported as zero?
Under which basis of accounting would accounts receivable be reported as zero?
When should interest receivable be recorded?
When should interest receivable be recorded?
What is the total amount by which net income was overstated due to omitted expenses?
What is the total amount by which net income was overstated due to omitted expenses?
Which of the following expenses was NOT mentioned as omitted, contributing to the overstatement of net income?
Which of the following expenses was NOT mentioned as omitted, contributing to the overstatement of net income?
Why would the omission of these expense adjustments be considered unethical?
Why would the omission of these expense adjustments be considered unethical?
What was the amount of the omitted income tax expense that contributed to the overstatement?
What was the amount of the omitted income tax expense that contributed to the overstatement?
How does omitting expenses affect the reported net income?
How does omitting expenses affect the reported net income?
Which of the following is a result of the adjustments that were omitted by the accountant?
Which of the following is a result of the adjustments that were omitted by the accountant?
What is the role of the adjustments in the financial statements?
What is the role of the adjustments in the financial statements?
Which of the following actions by the accountant can be classified as fraudulent?
Which of the following actions by the accountant can be classified as fraudulent?
Study Notes
Closing Entries
- Revenue is debited for 23,600andOtherRevenueisdebitedfor23,600 and Other Revenue is debited for 23,600andOtherRevenueisdebitedfor600 thousand. The total debit is $24,200
- Retained Earnings is credited for $24,200 thousand.
- Retained Earnings is debited for $23,000 thousand.
- Cost of Services Sold is credited for $11,600 thousand.
- Selling, General, and Administrative Expense is credited for $6,900 thousand.
- Depreciation Expense is credited for $4,100 thousand.
- Income Tax Expense is credited for $400 thousand.
- Retained Earnings is debited for $400 thousand.
- Dividends are credited for $400 thousand.
Closing Balances
- The Opening balance of Retained Earnings is $1,900
- Closing expenses are $23,000
- Closing Dividends are $400
- Closing Revenue is $24,200
- The Closing balance of Retained Earnings is $2,700
Web Marketing Services Inc. - Income Statement
- Revenues:
- Service Revenue: $3,800
- Expenses:
- Salary Expense: $1,000
- Supplies Expense: $600
- Rent Expense: $500
- Utilities Expense: $200
- Depreciation Expense - Furniture: $200
- Depreciation Expense - Equipment: $100
- Total Expenses: $2,600
- Net Income: $1,200
Adjusting Entries
- Insurance Expense: $2,000
- Prepaid Insurance: $2,000
- Interest Receivable: $900
- Interest Revenue: $900
- Unearned Service Revenue: $500
- Service Revenue: $500
- Depreciation Expense: $6,200
- Accumulated Depreciation: $6,200
- Salary Expense: $5,400
- Salary Payable: $5,400
- Income Tax Expense: $5,000
- Income Tax Payable: $5,000
Unethical Accounting Practices
- By not making the adjusting entries, the accountant would have understated total expenses and overstated the net income, potentially misleading users of the financial statements.
- The omission of these adjustments constitutes fraud.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz covers the concepts of closing entries and balances in accounting, specifically focusing on retained earnings, expenses, and revenues. Test your knowledge on how to properly record and close entries at the end of an accounting period.
