Podcast
Questions and Answers
What is the purpose of an adjusted trial balance?
What is the purpose of an adjusted trial balance?
- To prove the equality of debits and credits after adjustments. (correct)
- To prepare financial statements for reporting purposes.
- To summarize the company's overall profitability.
- To record the initial entries of debits and credits.
Which entry records a payment made to settle a liability?
Which entry records a payment made to settle a liability?
- Debit to Cash.
- Credit to Cash.
- Debit to Accounts Payable. (correct)
- Credit to Accounts Receivable.
How is rent revenue recognized when received in advance?
How is rent revenue recognized when received in advance?
- Debit to Cash.
- Credit to Rent Revenue.
- Debit to Unearned Rent Revenue.
- Credit to Unearned Rent Revenue. (correct)
When recording a sale of inventory on account, which account is debited?
When recording a sale of inventory on account, which account is debited?
What characterizes a prepaid expense?
What characterizes a prepaid expense?
Which entry correctly reflects an unearned revenue transaction?
Which entry correctly reflects an unearned revenue transaction?
In accounting, what does the term 'Cost of Goods Sold' represent?
In accounting, what does the term 'Cost of Goods Sold' represent?
What happens when a company records a sale of inventory?
What happens when a company records a sale of inventory?
What is the main purpose of adjusting entries in financial statements?
What is the main purpose of adjusting entries in financial statements?
When are adjustments typically prepared in relation to the statement of financial position date?
When are adjustments typically prepared in relation to the statement of financial position date?
How is an accrued revenue characterized?
How is an accrued revenue characterized?
What accounts are affected by an adjusting entry to record an accrued expense?
What accounts are affected by an adjusting entry to record an accrued expense?
Which of the following best describes accrued expenses?
Which of the following best describes accrued expenses?
In which situation would a company typically need to make an adjusting entry?
In which situation would a company typically need to make an adjusting entry?
What is another term for accrual accounting?
What is another term for accrual accounting?
What impact do adjusting entries generally have on financial statements?
What impact do adjusting entries generally have on financial statements?
What will occur if an adjusting entry to accrue an expense is not recorded?
What will occur if an adjusting entry to accrue an expense is not recorded?
When Wave Inn makes the adjusting entry for the conference charges, what accounts are affected?
When Wave Inn makes the adjusting entry for the conference charges, what accounts are affected?
During December 2019, how much of the cash collected by Wave Inn represents unearned revenue?
During December 2019, how much of the cash collected by Wave Inn represents unearned revenue?
What impact does the adjusting entry on December 31, 2019, have on Wave Inn's equity?
What impact does the adjusting entry on December 31, 2019, have on Wave Inn's equity?
If Wave Inn earned one third of the collected cash by the end of December 2019, how much is recognized as revenue?
If Wave Inn earned one third of the collected cash by the end of December 2019, how much is recognized as revenue?
In the absence of an adjusting entry for unearned revenue, which financial statement would show a distortion?
In the absence of an adjusting entry for unearned revenue, which financial statement would show a distortion?
What represents the total charges for the conference held at Wave Inn?
What represents the total charges for the conference held at Wave Inn?
How much cash did Spin Jammers pay immediately for the conference?
How much cash did Spin Jammers pay immediately for the conference?
How will the adjusting entry impact Cara, Inc.’s statement of financial position at December 31, 2019, considering supplies costing TL2,500 with TL1,000 still on hand?
How will the adjusting entry impact Cara, Inc.’s statement of financial position at December 31, 2019, considering supplies costing TL2,500 with TL1,000 still on hand?
What accounts are involved in the adjusting entry when an expense has been incurred but not yet paid or recorded during an accounting period?
What accounts are involved in the adjusting entry when an expense has been incurred but not yet paid or recorded during an accounting period?
What is the net effect on equity for Maso Company after issuing ordinary shares for $50,000, paying $13,000 on accounts payable, and paying salaries of $21,000?
What is the net effect on equity for Maso Company after issuing ordinary shares for $50,000, paying $13,000 on accounts payable, and paying salaries of $21,000?
What is the net impact on equity for Mune Company after declaring R$55,000 in dividends, increasing accounts receivable by R$32,000, and purchasing equipment for R$21,000?
What is the net impact on equity for Mune Company after declaring R$55,000 in dividends, increasing accounts receivable by R$32,000, and purchasing equipment for R$21,000?
What is the correct adjusting entry for Panda Corporation on December 31, 2019, for one year’s rent paid in advance of Rp12,000?
What is the correct adjusting entry for Panda Corporation on December 31, 2019, for one year’s rent paid in advance of Rp12,000?
What is the effect of recording an entry for the payment of accounts payable on a company’s liabilities?
What is the effect of recording an entry for the payment of accounts payable on a company’s liabilities?
If a company incurs an expense during the period but has not yet recorded it, which financial position element is primarily affected at the end of the period?
If a company incurs an expense during the period but has not yet recorded it, which financial position element is primarily affected at the end of the period?
After accounting for both dividends declared and the increase in accounts receivable, what other factor must be considered in calculating the overall change in equity?
After accounting for both dividends declared and the increase in accounts receivable, what other factor must be considered in calculating the overall change in equity?
Which of the following is an example of an accrued expense?
Which of the following is an example of an accrued expense?
Which statement regarding adjusting entries is false?
Which statement regarding adjusting entries is false?
Which statement about the adjusted trial balance is false?
Which statement about the adjusted trial balance is false?
What does an accrued expense represent?
What does an accrued expense represent?
Which of the following is not a purpose of adjusting entries?
Which of the following is not a purpose of adjusting entries?
Which type of accounts are affected by adjusting entries?
Which type of accounts are affected by adjusting entries?
When are adjusting entries typically made?
When are adjusting entries typically made?
What is the main benefit of preparing an adjusted trial balance?
What is the main benefit of preparing an adjusted trial balance?
Flashcards
Adjusted Trial Balance
Adjusted Trial Balance
A document showing debits and credits after adjustments are made.
Payment on Account
Payment on Account
Recording a payment made to settle a pending account.
Receipt of Rent Revenue (in advance)
Receipt of Rent Revenue (in advance)
Recording rent received before it's earned.
Inventory Sales (on account)
Inventory Sales (on account)
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Prepaid Expense
Prepaid Expense
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Accounts Payable
Accounts Payable
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Accounts Receivable
Accounts Receivable
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Journal Entry
Journal Entry
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Adjusting Entries
Adjusting Entries
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Accrual Accounting
Accrual Accounting
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Why are adjustments often prepared after the financial statement date?
Why are adjustments often prepared after the financial statement date?
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Accrued Revenue
Accrued Revenue
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Accrued Expense
Accrued Expense
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Adjusting Entry for Accrued Expense
Adjusting Entry for Accrued Expense
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Why is adjusting entries important?
Why is adjusting entries important?
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What is the purpose of adjusting entries?
What is the purpose of adjusting entries?
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Failure to Record an Adjusting Entry
Failure to Record an Adjusting Entry
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Unearned Revenue
Unearned Revenue
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Adjusting Entry for Unearned Revenue
Adjusting Entry for Unearned Revenue
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Impact of Adjusting Entry on Statement of Financial Position
Impact of Adjusting Entry on Statement of Financial Position
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Adjusting Entry for Revenue Earned
Adjusting Entry for Revenue Earned
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Revenue Recognition
Revenue Recognition
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Supplies Adjustment
Supplies Adjustment
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Impact of Adjusting Entry on Financial Position
Impact of Adjusting Entry on Financial Position
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Net Effect on Equity
Net Effect on Equity
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What is FALSE about Adjusting Entries?
What is FALSE about Adjusting Entries?
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What is FALSE about the Adjusted Trial Balance?
What is FALSE about the Adjusted Trial Balance?
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What makes an Accrued Expense different?
What makes an Accrued Expense different?
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What is a FALSE statement about the Adjusted Trial Balance?
What is a FALSE statement about the Adjusted Trial Balance?
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What is the purpose of the Adjusted Trial Balance?
What is the purpose of the Adjusted Trial Balance?
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Study Notes
Question 1
- A document proving the equality of debits and credits after adjustments is the adjusted trial balance.
Question 2
- A journal entry for a payment on account debits Accounts Payable.
Question 3
- A journal entry for a rent revenue receipt in advance credits Unearned Rent Revenue.
Question 4
- A journal entry for inventory sale on account debits Accounts Receivable.
Question 5
- A prepaid expense is an amount paid but not yet matched with revenues.
Question 6
- Adjusting entries are needed for financial statements to conform to IFRS.
- Adjusting entries are often prepared after the statement of financial position date, but dated as of that date.
- Adjusting entries include accruals and deferrals.
Question 7
- Adjustments are often prepared after the statement of financial position date, but dated as of that date.
Question 8
- An accrued revenue is an amount not collected but reported on the income statement.
Question 9
- An adjusting entry for an accrued expense debits an expense account and credits a liability account.
Question 10
- If supplies costing TL2,500 were purchased and TL1,000 are still on hand at year-end, the adjusting entry decreases assets by TL1,500.
Question 11
- An expense incurred but not paid or recorded requires a liability account and an expense account in the adjusting entry.
Question 12
- Issuing shares of $50,000, paying accounts payable of $13,000, and paying salaries and wages of $21,000 increases equity by $29,000.
Question 13
- Declaring dividends of R$55,000, increasing accounts receivable by R$32,000, and purchasing equipment for R$21,000 decreases equity by R$23,000.
Question 14
- Paying rent in advance of Rp12,000 for one year requires debiting Rent Expense and crediting Prepaid Rent for Rp7,000 at year-end.
Question 15
- Failure to record an adjusting entry for an accrued expense understates expenses and understates liabilities.
Question 16
- Wave Inn's adjusting entry for Spin Jammers' conference charges at year-end credits Revenue by $270,000.
Question 17
- Collecting cash for reservations and recording it as unearned revenue at year-end requires decreasing liabilities by $30,000.
Question 18
- An example of an accrued expense is property taxes incurred during the year, to be paid the next quarter.
Question 19
- An adjusting entry affects one revenue account and one expense account.
Question 20
- Companies cannot prepare the statement of cash flows directly from the adjusted trial balance.
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Description
Test your knowledge on key concepts related to adjusting entries in accounting. This quiz covers topics such as trial balances, journal entries, and the importance of adjustments for financial statements. Perfect for students learning about accounting practices and IFRS compliance.