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2 - 1 The Recording Process Ex. 185 The transactions of Medina Information Service are recorded in the general journal below. You are to post the journal entries to the accounts in the general ledger. After all entries have been posted, you are to prepare a trial balance on the form provided. General JournalJ1 ——————————————————————————————————————————— DateAccount.
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2 - 1 The Recording Process S-A E  215(Ethics) Jim Coleman, Jr. was appointed the manager of Maris Properties, a recently formed company that manages residential rental properties. Linda Grider is the accountant. She prepared a chart of accounts based on an analysis of the expenditures of the company. One of the largest.
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3 - 1 Adjusting the Accounts Ex. 236 Gwynn Company has an accounting fiscal year which ends on June 30. The company also has a policy of paying the weekly payroll on Friday. Payroll records indicate the following salary costs were incurred.   DateAmount MondayJune 28$3,000 TuesdayJune 293,800 WednesdayJune 303,300 ThursdayJuly 13,500 FridayJuly 22,400 Instructions (a)Prepare any necessary adjusting journal.
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3 - 1 Adjusting the Accounts 178.The revenue recognition principle dictates that revenue be recognized in the accounting period a.before it is earned. b.after it is earned. c.in which the performance obligation is satisfied. d.in which it is collected. 179.An expense is recorded under the cash basis only when a.services are performed. b.it is earned. c.cash is paid. d.it is incurred. 180.For.
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3 - 1 Adjusting the Accounts Ex. 219 Before month-end adjustments are made, the February 28 trial balance of Neutral Milk Hotel contains revenue of $7,000 and expenses of $4,400. Adjustments are necessary for the following items: Depreciation for February is $1,800. Revenue recognized but not yet billed is $2,700. Accrued interest expense is $700. Revenue collected.
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3 - 1 Adjusting the Accounts BRIEF EXERCISES BE 198 State whether each situation is a prepaid expense (PE), unearned revenue (UR), accrued revenue (AR) or an accrued expense (AE). 1.Unrecorded interest on savings bonds is $245. 2.Property taxes that have been incurred but that have not yet been paid or recorded amount to $300. 3.Legal fees.
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3 - 1 Adjusting the Accounts a31.To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis. a32.Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company. a33.Consistency in accounting means that a company uses the.
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3 - 1 Adjusting the Accounts Ex. 225 The Shins, a minor league baseball team, prepare financial statements on a monthly basis. Their season begins in April, but in March the team engaged in the following transactions: (a)Paid $210,000 to Kansas City as advance rent for use of Kansas City Stadium for the six.
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3 - 1 Adjusting the Accounts 98.Meat Puppets Company purchased equipment for $7,200 on December 1. It is estimated that annual depreciation on the equipment will be $1,800. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: a.Debit Depreciation Expense, $1,800; Credit Accumulated Depreciation,.
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3 - 1 Adjusting the Accounts TRUE-FALSE STATEMENTS 1.Many business transactions affect more than one time period. 2.The time period assumption states that the economic life of a business entity can be divided into artificial time periods. 3.The time period assumption is often referred to as the expense recognition principle. 4.A company's calendar year and fiscal.
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3 - 1 Adjusting the Accounts a168.A company using the same accounting principles from year to year is an application of a.timeliness. b.consistency. c.full disclosure. d.meteriality. a169.Which of the following is a constraint in accounting? a.Comparability. b.Cost. c.Consistency. d.Relevance. a170.The periodicity assumption states that the economic life of a business can be divided into a.equal time periods. b.cyclical time periods. c.artificial time periods. d.perpetual time periods. a171.Which.
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3 - 1 Adjusting the Accounts 188.Accrual-basis accounting is allowed under a.GAAP but not IFRS. b.IFRS but not GAAP. c.both IFRS and GAAP. d.neither IFRS nor GAAP. 189.Cash-basis accounting is allowed under a.GAAP but not IFRS. b.IFRS but not GAAP. c.both IFRS and GAAP. d.neither IFRS nor GAAP. 190.The time period assumption is used under a.GAAP but not IFRS. b.IFRS but not GAAP. c.both IFRS.
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3 - 1 Adjusting the Accounts 138.Sebastian Belle has performed $2,000 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Sebastian make? a.Debit Cash and credit Unearned Service Revenue b.Debit Accounts Receivable and credit Unearned Service Revenue c.Debit Accounts Receivable.
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3 - 1 Adjusting the Accounts Ex. 229 Scotsman Company prepares monthly financial statements. Below are listed some selected accounts and their balances in the September 30 trial balance before any adjustments have been made for the month of September. SCOTSMAN COMPANY Trial Balance (Selected Accounts) September 30, 2014 ——————————————————————————————————————————— Debit  Credit Supplies.................................................$ 3,200 Prepaid Insurance.........................................4,200 Equipment................................................16,200 Accumulated Depreciation—Equipment........................$1,000 Unearned Rent.
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3 - 1 Adjusting the Accounts Additional True-False Questions 41.The expense recognition principle requires that expenses be matched with revenues. 42.In general, adjusting entries are required each time financial statements are prepared. 43.Every adjusting entry affects one balance sheet account and one income statement account. 44.The Accumulated Depreciation account is a contra asset account that is.
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3 - 1 Adjusting the Accounts BE 203 Bakesale Enterprises purchased equipment on May 1, 2014 for $6,300. The company expects to use the equipment for 5 years. It has no salvage value. 1.What adjusting journal entry should the company make at the end of each month if monthly financials are prepared (annual.
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2 - 1 The Recording Process Ex. 181 Transactions for Tom Petty Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations. 1.Invested $40,000 cash in the business. 2.Purchased land costing $28,000 for cash. 3.Purchased equipment costing $15,000 for $3,000 cash and the.
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3 - 1 Adjusting the Accounts EXERCISES Ex. 217 The balance sheets of Red House Painters include the following: 12/31/1412/31/13 Interest Receivable$0$4,300 Supplies3,0005,000 Salaries and Wages Payable3,8005,600 Unearned Service Revenue4,000-0- The income statement for 2014 shows the following: Interest Revenue$18,400 Service Revenue72,700 Supplies Expense8,700 Salaries and Wages Expense39,000 Instructions Calculate the following for 2014: 1.Cash received for interest. 2.Cash paid for supplies. 3.Cash paid for salaries and wages. 4.Cash received.
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3 - 1 Adjusting the Accounts Ex. 242 The White Stripes Animal Encounters operates a drive through tourist attraction. The company adjusts its accounts at the end of each month. The selected accounts appearing below reflect balances after adjusting entries were prepared on April 30. The adjusted trial balance shows the following: Prepaid Rent$16,000 Buildings30,000 Accumulated.
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3 - 1 Adjusting the Accounts a158.On January 2, 2014, Superchunk purchased a general liability insurance policy for $2,700 for coverage for the calendar year. The entire $2,700 was charged to Insurance Expense on January 2, 2014. If the firm prepares monthly financial statements, the proper adjusting entry on January 31, 2014,.
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3 - 1 Adjusting the Accounts Ex. 241 The trial balances before and after adjustments for Old Julian Calendars at the end of its fiscal year are presented below. Old Julian Calendars Trial Balance September 31, 2014 ——————————————————————————————————————————— Before AdjustmentAfter Adjustment      Dr.                 Cr.      Dr.                   Cr. Cash              $ 15,080                            $ 15,080 Accounts Receivable              14,960                            16,110 Supplies              2,760                            885 Prepaid Insurance             .
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2 - 1 The Recording Process Ex. 192 The ledger account balances for Galaxie 500 Company are listed below.Accounts Payable$  6,000Accounts Receivable7,000Cash5,200Owner’s Capital11,000Owner’s Drawings4,000Service Revenue30,000Salaries and Wages Expense20,800Unearned Service Revenue2,000Utilities Expense12,000 Instructions Prepare a trial balance in proper form for Galaxie at December 31, 2014. Ex 193 The bookkeeper for Antony Johnson Auto Repair made a number.
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3 - 1 Adjusting the Accounts 68.Under accrual-basis accounting a.cash must be received before revenue is recognized. b.net income is calculated by matching cash outflows against cash inflows. c.events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. d.the ledger.
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2 - 1 The Recording Process COMPLETION STATEMENTS               194.An _______________ is a record of increases and decreases in specific assets, liabilities, and owner's equity items.               195.The process of entering an amount on the left side of an account is called ____________ the account, and making an entry on the right side is.
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3 - 1 Adjusting the Accounts 128.On January 1, 2013, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2014, the balance in Accumulated Depreciation is a.$750. b.$9,000. c.$9,750. d.$35,250. 129.On January 1, 2014, Superfuzz Company purchased equipment for $40,000. The company is depreciating.
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3 - 1 Adjusting the Accounts Ex. 243 The adjusted trial balance of C.S. Financial Planners appears below. Using the information from the adjusted trial balance, you are to prepare for the month ending December 31, 2014: 1.an income statement. 2.an owner's equity statement. 3.a balance sheet. C.S. Financial Planners Adjusted Trial Balance December 31, 2014 ———————————————————————————————————————————    Debit  Credit Cash....................................................$  4,900 Accounts.
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3 - 1 Adjusting the Accounts BE 211 The adjusted trial balance of Rocky Acre Spread Inc. on December 31, 2014 includes the following accounts: Accumulated Depreciation, $6,000; Depreciation Expense, $2,000; Notes Payable $7,500; Interest Expense $150; Utilities Expense, $300; Rent Expense, $500; Service Revenue, $19,600; Salaries and Wages Expense, $6,000; Supplies, $200;.
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3 - 1 Adjusting the Accounts MULTIPLE CHOICE QUESTIONS 48.Monthly and quarterly time periods are called a.calendar periods. b.fiscal periods. c.interim periods. d.quarterly periods. 49.The time period assumption states that a.a transaction can only affect one period of time. b.estimates should not be made if a transaction affects more than one time period. c.adjustments to the company's accounts can only be.
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3 - 1 Adjusting the Accounts 21.Unearned revenue is a prepayment that requires an adjusting entry when services are performed. 22.Asset prepayments become expenses when they expire. 23.A contra asset account is subtracted from a related account in the balance sheet. 24.If prepaid costs are initially recorded as an asset, no adjusting entries will be.
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3 - 1 Adjusting the Accounts 108.The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is to a.debit Rent Expense, $7,000; credit Prepaid Rent, $7,000. b.debit Rent Expense, $14,000; credit.
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3 - 1 Adjusting the Accounts Ex. 231 Aeroplane Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information considered. AEROPLANE INSURANCE AGENCY Income Statement For the Month Ended June 30 ——————————————————————————————————————————— Revenues Sales revenue........................................$35,000 Expenses Salaries and wages expense............................$6,000 Rent expense.........................................4,200 Depreciation expense..................................  2,800 Advertising expense...................................     800 Total expenses....................................... .
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2 - 1 The Recording Process Ex. 188 The trial balance of Red House Painters shown below does not balance. RED HOUSE PAINTERS Trial Balance June 30, 2014 ———————————————————————————————————————————    Debit  Credit Cash.................................................$  2,780 Accounts Receivable....................................7,420 Supplies..............................................600 Equipment.............................................8,300 Accounts Payable.......................................$  9,777 Owner’s Capital........................................1,952 Owner’s Drawings......................................1,300 Service Revenue.......................................15,200 Salaries and Wages Expense.............................3,800 Repair Expense........................................    1,600      Totals............................................$25,800$26,929 An examination of the ledger and journal reveals the following errors: 1.Each of the above listed.
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3 - 1 Adjusting the Accounts 118.Fugazi City College sold season tickets for the 2014 football season for $240,000. A total of 8 games will be played during September, October and November. In September, three games were played. The adjusting journal entry at September 30 a.is not required. No adjusting entries will be.
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3 - 1 Adjusting the Accounts BE 213 The adjusted trial balance of Sodajerk Company at December 31, 2014 includes the following accounts: Owner's Capital $12,600; Owner's Drawings $7,000; Service Revenue $38,000; Salaries and Wages Expense $13,000; Insurance Expense $2,000; Rent Expense $3,500; Supplies Expense $2,500; and Depreciation Expense $2,000. Prepare an owner’s.
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2 - 1 The Recording Process Ex. 190 L. Phair and Associates is a financial planning service. The account balances at December 31, 2014 are shown by the following alphabetical list: Accounts Payable$    5,000 Accounts Receivable19,000 Buildings140,000 Cash11,700 Equipment31,300 Land42,000 Owner’s Capital152,900 Notes Payable95,000 Notes Receivable8,100 Supplies800 Instructions Prepare a trial balance with the accounts arranged in financial statement order. Ex. 191 The ledger accounts of.
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2 - 1 The Recording Process Ex. 186 The bookkeeper for Panda Bear Yard Service made a number of errors in journalizing and posting as described below: 1.A debit posting to accounts receivable for $500 was omitted. 2.A payment of accounts payable for $600 was credited to cash and debited to accounts receivable. 3.A credit to.
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3 - 1 Adjusting the Accounts Ex. 239 Compute the net income for 2014 based on the following amounts presented on the adjusted trial balance of D-Lay Company. Accumulated Depreciation – Equip.$20,000Depreciation Expense18,000Salaries and Wages Expense15,000Service Revenue40,000Unearned Service Revenue8,000 Ex. 240 New Slang Pest Control has the following balances in selected accounts on December 31, 2014. Accounts.
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2 - 1 The Recording Process Ex. 184 Sigur Ros Company is a newly organized business. The list of accounts to be opened in the general ledger is as follows: Accounts PayablePrepaid Insurance Accounts ReceivablePrepaid Rent Accumulated Depreciation - Equip.Rent Expense CashSalaries and Wages Expense Depreciation ExpenseSalaries and Wages Payable EquipmentService Revenue Insurance ExpenseSupplies Owner’s CapitalSupplies Expense Owner’s Drawings Instructions Organize the accounts into.
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3 - 1 Adjusting the Accounts 58.Which of the following is in accordance with generally accepted accounting principles? a.Accrual-basis accounting b.Cash-basis accounting c.Both accrual-basis and cash-basis accounting d.Neither accrual-basis nor cash-basis accounting 59.The revenue recognition principle dictates that revenue should be recognized in the accounting records a.when cash is received. b.when the performance obligation is satisfied. c.at the end of.
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3 - 1 Adjusting the Accounts 11.Adjusting entries are not necessary if the trial balance debit and credit column balances are equal. 12.An adjusting entry always involves two balance sheet accounts. 13.Adjusting entries are often made because some business events are not recorded as they occur. 14.Adjusting entries are recorded in the general journal but.
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2 - 1 The Recording Process SHORT-ANSWER ESSAY QUESTIONS S-A E  205 An account is an important accounting record where financial information is stored until needed. Briefly explain (1) the nature of an account, (2) the different types of accounts, and (3) the manner in which an account is increased and decreased and its.
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3 - 1 Adjusting the Accounts 88.Accrued expenses are a.paid and recorded in an asset account before they are used or consumed. b.paid and recorded in an asset account after they are used or consumed. c.incurred but not yet paid or recorded. d.incurred and already paid or recorded. 89.Unearned revenues are a.cash received and a liability recorded before.
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3 - 1 Adjusting the Accounts Ex. 223 The adjusted trial balance of the Victoria Lane Paving Company includes the following balance sheet accounts that frequently require adjustment. For each account, indicate (a) the type of adjusting entry (prepaid expenses, unearned revenues, accrued revenues, or accrued expenses) and (b) the related account in.
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3 - 1 Adjusting the Accounts 148.Employees at Tengo Corporation are paid $15,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Wednesday, December 31. How much salaries and wages expense should be recorded two days later on January 2? a.$15,000 b.$9,000 c.$6,000 d.None, matching requires the weekly salary to.
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3 - 1 Adjusting the Accounts BE 207 Identify the impact on the balance sheet if the following information is not used to adjust the accounts. 1.Supplies consumed totaled $3,000. 2.Interest accrues on notes payable at the rate of $200 per month. 3.Insurance of $450 expired during the month. 4.Plant and equipment are depreciated at the rate.
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3 - 1 Adjusting the Accounts Ex. 222 Buena Vista Social Club accumulates the following adjustment data at December 31. 1.Revenue of $1,600 collected in advance has been recognized. 2.Salaries of $600 are unpaid. 3.Prepaid rent totaling $500 has expired. 4.Supplies of $450 have been used. 5.Revenue recognized but unbilled total $750. 6.Utility expenses of $250 are unpaid. 7.Interest of.
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3 - 1 Adjusting the Accounts Ex. 233 For each of the following accounts, indicate (a) the type of adjusting entry (prepaid expense, accrued revenue, etc.) and (b) the related account in the adjusting entry. 1.Depreciation Expense 2.Salaries and Wages Payable 3.Service Revenue 4.Supplies 5.Unearned Service Revenue Ex. 234 Prepare the necessary adjusting entry for each of the following: 1.Services provided.
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2 - 1 The Recording Process MATCHING 204.Match the items below by entering the appropriate code letter in the space provided. A.AccountF.Journal B.Normal account balanceG. Posting C.DebitH.Chart of accounts D.Revenue accountI.Trial balance E.Compound entryJ.Simple entry _____              1.An entry that involves three or more accounts. _____              2.Transferring journal entries to ledger accounts. _____              3.The side which increases an account. _____              4.A list of.
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3 - 1 Adjusting the Accounts 78.An adjusting entry a.affects two balance sheet accounts. b.affects two income statement accounts. c.affects a balance sheet account and an income statement account. d.is always a compound entry. 79.The preparation of adjusting entries is a.straight forward because the accounts that need adjustment will be out of balance. b.often an involved process requiring the.
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2 - 1 The Recording Process S-A E  210 Amy Pond, a fellow employee, wants to understand the basic steps in the recording process. Identify and briefly explain the steps in the order in which they occur. S-A E 211  All recordable transactions are initially recorded in the journal. Discuss the contributions that the.
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