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Exam 3: The Adjusting Process

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Question 1

True/False

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A fixed asset's market value is reflected on the balance sheet.

A) True
B) False

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Question 2

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The adjustment for accrued fees was debited to Accounts Payable instead of Accounts Receivable.This error will be detected when the adjusted trial balance is prepared.

A) True
B) False

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Question 3

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Which of the accounts below would most likely appear on an adjusted trial balance but probably would not appear on the unadjusted trial balance?

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account,which of the following describes the effect of the debit portion of the entry?

On January 2,Safe Motorcycling Monthly received a check for $72 from a subscriber for a 12-month subscription.The January issue was mailed on January 15.Prepare the necessary entries for the month of January.

If the adjustment to recognize expired insurance at the end of the period is inadvertently omitted,the assets at the end of the period will be understated.

The balance in the unearned fees account,before adjustment at the end of the year,is $10,250.Journalize the adjusting entry required if the amount of unearned fees at the end of the year is $3,125.

On December 31,the balance in the office supplies account is $1,385.A physical count shows $435 worth of supplies on hand.Prepare the adjusting entry for supplies.

As time passes,fixed assets other than land lose their capacity to provide useful services.To account for this decrease in usefulness,the cost of fixed assets is systematically allocated to expense through a process called

Prepaid expenses have

At the end of the fiscal year,the following adjusting entries were omitted: Assuming that financial statements are prepared before the errors are discovered,indicate the effect of each error,considered individually,by inserting the dollar amount in the appropriate spaces.Insert "0" if the error does not affect the item. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

The updating of accounts when financial statements are prepared is called the adjusting process.

Adjusting entries are

How will the following adjusting journal entry affect the accounting equation?

The systematic allocation of land's cost to expense is called depreciation.

Ski Master Company pays weekly salaries of $18,000 on Friday for a five-day week ending on that day.Journalize the necessary adjusting entry at the end of the accounting period,assuming that the period ends on Wednesday.

What is the purpose of an adjusted trial balance? What type(s)of error does it detect? What type(s)of error does it not detect?

Fees payable would appear on the balance sheet as a(n)

Classify the following items as: (1)prepaid expense,(2)unearned revenue,(3)accrued expense,or (4)accrued revenue. ​ a)fees received but not yet earned b)fees earned but not yet received c)paid premium on a one-year insurance policy d)property tax owed to be paid beginning of next year

On January 2,Dog Mart prepaid $30,000 rent for the year and recorded the prepayment in an asset account.Prepare the January 31 adjusting entry for rent expense.