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1.Cross-referencing is useful in assuring that the debits and credits are in balance. a.True b.False 2.When accounts do notappear on the unadjusted trial balance but are needed to post adjustments, they are simplyadded to the account title column. a.True b.False 3.Once the adjusted trial balance is in balance, the flow of accounts will now go into.
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223.  Nebraska Technologies has a condensed income statement as shown: Year 2 Year 1 Sales $158,400 $162,500 Wage expenses $80,000 $92,500 Rent expenses 28,000 30,000 Utilities expenses 30,000 25,000 Total operating expenses $138,000 $147,500 Net income $20,400 $15,000 REQUIRED: Prepare a horizontal analysis of Nebraska Technologies’s income statements. Comment on the trends, bothfavorable and unfavorable. .
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135.  Two income statements for Midnight Enterprises are shown below: Midnight  EnterprisesIncome Statement For Year 1 and Year 2, Ended December 31      Year 2          Year 1 Fees earned $674,350 $520,600 Operating expenses 472,045 338,390 Operating income $202,305 $182,210 (a) Prepare a vertical analysis of Midnight Enterprises’ income statements. (b) Does the vertical analysis indicate a favorable or unfavorable trend? 136. .
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121.The net income reported on the income statement is $58,000. However, adjusting entries have not been made atthe end of the period for supplies expense of $2,200 and accrued salaries of $1,300.  Net income, as corrected, is a. $56,700 b. $58,000 c. $55,800 d. $54,500 122.At the end of the fiscal year, the usual adjusting.
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135.  Salaries of $6,400 are paid for a five-day week on Friday.  Prepare the adjusting journal entry that is required if themonth ends on Thursday. 136.  Accrued salaries of $600 owed to employees for December 29, 30, and 31 are not taken into consideration inpreparing the financial statements for the year.
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101.Prepaid rent, representing rent for the next six months' occupancy, would be reported on the tenant's balance sheetas a(n) a.asset b.liability c.capital account d.contra liability 102.Accrued expenses are ordinarily reported on the balance sheet as a.assets b.liabilities c.fixed assets d.prepaid expenses 103.Fees payable would appear on the balance sheet as a(n) a.asset b.liability c.fixed asset d.unearned revenue 104.The general term used to indicate delaying the.
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135.  Journalize the six entries to adjust the accounts at December 31.  (Hint: One of the accounts was affected by twodifferent adjusting entries). Unadjusted Trial Balance Adjusted Trial Balance Debit Balances Credit Balances Debit Balances Credit Balances Cash 5,000 5,000 Accounts Receivable 32,000 32,600 Supplies 3,600 100 Prepaid Insurance 4,000 1,400 Equipment 11,000 11,000 Accumulated Depreciation 1,700 Wages Payable 2,000 Unearned Fees 8,900 3,500 Ann Cole, Capital 22,000 22,000 Fees Earned 69,000 75,000 Wages Expense 44,300 46,300 Supplies Expense 3,500 Insurance Expense 2,600 Depreciation Expense 1,700 Total 99,900 99,900 104,200 104,200 136.  .
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91.The type of account and normal balance of Unearned Consulting Fees is a.revenue, credit b.expense, debit c.liability, credit d.liability, debit 92.Data for an adjusting entry described as "accrued wages, $2,020" requires a a.debit to Wages Expense and a credit to Wages Payable b.debit to Wages Payable and a credit to Wages Expense c.debit to Accounts Receivable and a.
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41.If the adjustment of the unearned rent account at the end of the period to recognize the amount of rent earned isinadvertently omitted, the net income for the period will be understated. a.True b.False 42.If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the.
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135.  Given the following account balances for Garry’s Tree Service, prepare a trial balance. Cash $25,000 Supplies 1,000 Accounts Payable 7,000 Garry Ryan, Capital 32,910 Wage Expense 2,000 Machinery 18,350 Wages Payable 3,600 Service Revenue 21,000 Rent Expense 11,500 Unearned Revenue 1,500 Accumulated Depreciation - Machinery 7,340 Prepaid Rent 12,200 Garry Ryan, Drawing 3,300 136.  .
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61.Deferred revenue is revenue that is a.earned and the cash has been received b.earned but the cash has not been received c.not earned and the cash has not been received d.not earned but the cash has been received 62.Adjusting entries are a.the same as correcting entries b.needed to bring accounts up to date and match revenue and.
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135.  For each of the following, journalize the necessary adjusting entry: (a)          A business pays weekly salaries of $22,000 on Friday for a five-day week ending onthat day. Journalize the necessary adjusting entry at the end of the fiscal period,assuming that the fiscal period ends (1) on Tuesday, (2) on Wednesday. (b)        .
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Several types of errors can be made during the journalizing and posting process. Match the following withtheir best description. a.  Trial balance preparation errors b.  Account balance errors c.  Posting errors 223.  Balance incorrectly computed. 224.  Debit or credit posting omitted. 225.  Wrong amount posted to an account. 226.  Column incorrectly added. 227.  Balance entered on wrong side.
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111.What effect will this adjustment have on the accounting records? Unearned Revenue6,375 Fees Earned6,375 a.Increase net income b.Increase revenues reported for the period c.Decrease liabilities d.All of these are true. 112.What effect will this adjusting journal entry have on the accounting records? Supplies Expense760 Supplies760 a.Increase income b.Decrease net income c.Decrease expenses d.Increase assets 113.What effect will the following adjusting journal entry have on.
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135.  Bloom's Company pays bi-weekly salaries of $40,000 every other Friday for a ten-day period ending on thatday.  The last payday of December is Friday, December 27.  Assuming the next pay period begins on Monday,December 30, journalize the adjusting entry necessary at the end of the fiscal period (December 31). Date Description PostRef Debit Credit 136. .
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223.  Set up T accounts for Cash; Accounts Receivable; Supplies; Accounts Payable; Clay Potter, Capital; Clay Potter, Drawing; Professional Fees; and Operating Expenses. In the T accounts, record the following transactions of Potter Pool Services for June,identifying each entry by number: Potter invested $12,500 cash in the business. Purchased supplies on account, $6,250. Paid operating.
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11.Liabilities that will be due within one year or less and that are to be paid out of current assets are called currentliabilities. a.True b.False 12.The amount of the net income for a period appears on both the income statement and the balance sheet for thatperiod. a.True b.False 13.Accrued taxes payable are generally reported on the.
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51.The revenue recognition concept a.is not in conflict with the cash method of accounting. b.determines when revenue is credited to a revenue account. c.states that revenue is not recorded until the cash is received. d.controls all revenue reporting for the cash basis of accounting. 52.The matching concept a.addresses the relationship between the journal and the balance.
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223.  Refer to Exhibit 2-1.  Prepare a trial balance, listing the accounts in their proper order. 224.  Lewis Company has a condensed income statement as shown:: Year 2 Year 1 Sales $178,400 $162,500 Wage expenses $100,000 $92,500 Rent expenses 33,000 30,000 Utilities expenses 30,000 25,000 Total operating expenses $163,000 $147,500 Net income $15,400 $15,000 REQUIRED: Prepare a horizontal analysis of Lewis Company’s income statements. Comment on the trends, both favorable andunfavorable. 225.  .
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135.  On November 15th, Great Designs Company purchased an advertising campaign for the month of December.Great Designs paid cash of $2,700 in advance.  The advertising campaign ran in December. (a)    Prepare all necessary journal entries for the advertising campaign for November and December . (b)    Explain why you prepared this/these journal entries. 136. .
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135.  Prepare the December 31 adjusting entries for the following transactions.  Omit explanations. 1.    Fees accrued but unbilled total $6,300. 2.    The supplies account balance on December 31 is $4,750.  Supplies on hand are $960. 3.    Wages accrued but not paid are $2,700. 4.    Depreciation of office equipment is $1,650. 5.   Rent expired during year,.
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135.  Listed below are accounts to use for transactions (a) through (j), each identified by a number.  Following this listare the transactions.  You are to indicate for each transaction the accounts that should be debited and credited byplacing the account number(s) in the appropriate box. 1.                      Accounts Payable 2.                      Accounts Receivable 3.                      Accumulated.
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135.  Jordon James started JJJ Consulting on January 1.  The following are the account balances at the end of the firstmonth of business, before adjusting entries were recorded: Accounts Payable $300 Accounts Receivable 750 Cash 6,300 Consulting Revenue 4,925 Equipment 7,000 Jordon James, Capital 15,000 Jordon James, Drawing 1,375 Prepaid Rent 4,000 Supplies 800 Adjustment data: Supplies on hand at the end of the month: $200Unbilled consulting revenue: $700 Rent expense.
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21.Deferrals are recorded transactions that delay the recognition of an expense or revenue. a.True b.False 22.Adjustments for accruals are needed to record a revenue that has been earned or an expense that has beenincurred but not recorded. a.True b.False 23.Unearned revenue is a liability. a.True b.False 24.The systematic allocation of land's cost to expense is called depreciation. a.True b.False 25.The difference between.
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135.  Prepare the required entries for the following transactions: (a)             Austin Company pays daily wages of $645 (Monday - Friday). Paydays are every otherFriday. Prepare the Monday, January 31 adjusting entry assuming that the last paydaywas Friday, January 21. (b)             Prepare the journal entry to record the Austin Company’s payroll on Friday,.
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135.  Gizmo Inc. purchased a one-year insurance policy on October 1 for $1,800.  The adjusting entry on December 31would be: Date Description Post Ref Debit Credit 136.  The supplies account had a beginning balance of  $1,750. Supplies purchased during the period totaled $3,500.  Atthe end of the period before adjustment, $350 of supplies were on hand. .
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21.After analyzing transactions, the next step would be to post the transactions in the ledger. a.True b.False 22.Examples of temporary accounts are supplies and prepaid expenses which are in the ledger for just a short timebefore they expire. a.True b.False 23.Accumulated Depreciation is a permanent account. a.True b.False 24.The drawing account is a temporary account. a.True b.False 25.The balance sheet accounts are.
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51.The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period. a.True b.False 52.Any twelve-month accounting period adopted by a company is known as its fiscal year. a.True b.False 53.A fiscal year that ends when business activities have reached their lowest point is called the natural business year. a.True b.False 54.All companies must use.
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135.  Complete the missing items in the Summary of Adjustments chart: Prepaid  Expenses Examples Adjusting Entry Financial Statement Impactif Adjusting Entry is Omitted Supplies, (a) Dr. ExpenseCr. Asset Income Statement:Revenues: No effectExpenses: UnderstatedNet income:  (b) Balance Sheet:Assets:(c)Liabilities:   (d) Owner’s equity:  Overstated Unearned  Revenues Examples Adjusting Entry Financial Statement Impact ifAdjusting Entry is Omitted Unearned   Rent, (e) (f) Income Statement:Revenues: (g)Expenses: No effectNet income:  (h) Balance Sheet:Assets:(i) Liabilities:   Overstated Owner’s equity:  (j) Accrued .
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81.Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day.  The adjustingentry necessary at the end of the fiscal period ending on Tuesday is a.debit Salaries Payable, $12,000; credit Cash, $12,000 b.debit Salary Expense, $12,000; credit Drawing, $12,000 c.debit Salary Expense, $12,000; credit Salaries Payable, $12,000 d.debit.
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1.The system of accounting where revenues are recorded when they are earned and expenses are recorded whenthey are incurred is called the cash basis of accounting. a.True b.False 2.Generally accepted accounting principles require accrual-basis accounting. a.True b.False 3.The revenue recognition concept states that revenue should be recorded in the same period as the cash is received. a.True b.False 4.The.
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31.Entries required to close the balances of the temporary accounts at the end of the period are called final entries. a.True b.False 32.Journalizing and posting closing entries must be completed before financial statements can be prepared. a.True b.False 33.During the closing process, some balance sheet accounts are closed and end the period with a zero balance. a.True b.False 34.Closing.
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Match the type of account (a - e) with the business transactions that follow. Prepaid expense Accrued expense Unearned revenue Accrued revenue None of these 136.  Services provided that have not been recorded. 137.  Paid for one year’s insurance policy. 138.  Retainer fee received from a client for future legal representation. 139.  Annual property taxes that are paid at.
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Identify the effect (a - h) that omitting each of the following items would have on the balance sheet. Assets and owner’s equity overstated Assets and owner’s equity understated Assets overstated and owner’s equity understated Assets understated and owner’s equity overstated Liabilities and owner’s equity overstated Liabilities and owner’s equity understated Liabilities overstated and owner’s equity understated Liabilities.
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11.Revenues and expenses should be recorded in the same period to which they relate. a.True b.False 12.The matching concept supports matching expenses with the related revenues. a.True b.False 13.Even though GAAP requires the accrual basis of accounting, some businesses prefer using the cash basis ofaccounting. a.True b.False 14.The updating of accounts is called the adjusting process. a.True b.False 15.Adjusting entries affect balance.
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31.A company pays $36,000 for twelve month's rent on October 1, recording the prepayment as an asset.  Theadjusting entry on December 31 is a debit to Rent Expense, $9,000, and a credit to Prepaid Rent, $9,000. a.True b.False 32.A company receives $360 for a 12-month trade magazine subscription on August 1.  The adjusting.
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Match each of the following accounts with its proper account group from groups listed below. a.  Assets b.  Liabilities c.  Owners’ Equity d.  Revenue e.  Expenses 223.  Unearned Rent 224.  Prepaid Insurance 225.  Fees Earned 226.  Patents 227.  Chris Clark, Drawing For each of the following accounts, indicate whether its normal balance is on the credit side or the debitside of.
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135.  On March 1, a business paid $3,600 for a twelve-month liability insurance policy.  On April 1, the same businessentered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts: (a)    insurance expense for the month of March (b)    prepaid insurance as of March 31 (c)   .
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223.  Answer the following questions for each of the errors listed below, considered individually: Did the error cause the trial balance totals to be unequal? What is the amount of the difference between the trial balance totals (whereapplicable)? Which of the trial balance totals, debit or credit, is the larger (whereapplicable)? Present your answers.
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135.  On December 31, a business estimates depreciation on equipment used during the first year of operations to be$2,900. (a) Journalize the adjusting entry required on December 31. (b) If the adjusting entry in (a) were omitted,which items would be erroneously stated on (1) the income statement for the year.
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135.  REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31.  The following trial balances are available. Accounts Unadjusted TrialBalance Adjusted TrialBalance Debits Credits Debits Credits Cash 13,000 13,000 Accounts Receivable 1,500 1,800 Prepaid Insurance 600 200 Supplies 3,800 3,000 Machines 30,000 30,000 Accumulated Depreciation - Machines 12,000 17,500 Wages Payable 900 Unearned Revenue 6,700 6,500 R Miller, Capital 24,000 24,000 R Miller, Drawing 4,800 4,800 Service Revenue 25,000 25,500 Wages Expense 14,000 14,900 Insurance Expense 400 Supplies Expense 800 Depreciation Expense 5,500 67,700 67,700 74,400 74,400 a.    Reconstruct the adjusting entries and give a brief explanation.
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135.  Zoey Bella Corp. has a payroll of $10,000 for a five-day workweek.  Its employees are paid each Friday for thefive-day workweek.  The adjusting entry on December 31 assuming the year ends on Thursday would be: Date Description Post Ref Debit Credit 136.  A one-year insurance policy was purchased on June 1 for $2,400.  The adjusting.
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135.  Two income statements for Danielle’s Design Services are shown below: Danielle’s Design Services Income  Statements For Years 1 and 2 Ending December 31 Year 2 Year 1      Fees earned $765,340 $696,520 Operating expenses: Wages expense $254,000 $214,600 Rent expense 120,000 108,000 Supplies expense 76,500 98,715 Miscellaneous expense   11,680    16,420 Total operating expenses $462,180 $437,735 Net income $303,160 $258,785 (a)  Prepare a vertical analysis of Danielle’s Design Services income statements. (b)    What types of trends are.
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41.Accounts reported on the balance sheet that are carried forward from year to year are known as permanentaccounts. a.True b.False 42.Balance sheet accounts are notconsidered real accounts. a.True b.False 43.Real accounts are notpermanent accounts. a.True b.False 44.It is notnecessary to post the closing entries to the general ledger. a.True b.False 45.The closing process is sometimes referred to as closing the books. a.True b.False 46.Once an.
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71.Which of the following is considered to be unearned revenue? a.theater tickets sold last month for yesterday’s performance b.theater tickets sold yesterday on credit for yesterday’s performance c.theater tickets that were not sold for the current performance d.theater tickets sold for next month’s performance 72.Which of the following is an example of accrued revenue? a.snow removal.
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135.  Explain the difference between accrual basis accounting and cash basis accounting. 136.  Indicate with a Yes or No whether or not each of the following accounts would, under normal circumstances,require an adjusting entry. 1.    Cash 2.    Prepaid Expenses 3.    Depreciation Expense 4.    Accounts Payable 5.    Accumulated Depreciation 6.   Equipment 137.  Classify the following items as: (1) prepaid.
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135.  On December 31, the balance in the office supplies account is $1,385. A count shows $435 worth of supplies onhand. Prepare the adjusting entry for supplies. 136.  Depreciation on equipment for the year is $6,300. (a)  Record the journal entry if the company adjusts its account once a year. (b)  Record the.
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