\text{Cash} &\$ 57& \$ 55\\ A) Intangible expenses. this A:Answer 1 : adjusting entry made by Fragmental Co. on December 31 would be: The Income Summary account is used to close the permanent accounts at the end of an Olive follows a policy of recording all prepaid expenses to asset accounts at the time A company's Office Supplies account shows a beginning balance of $600 and an ending understates current period income. A company performs 20 days of work on a 30-day contract before the end of the year. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A lease is a agreement outlining the terms below which one party agrees to rent an asset. The adjusting entry on December 31 of the B) Debit Salaries Expense $400 and credit Salaries Payable $400. unearned and accrued revenues. Asset and liability balances are transferred from the adjusted trial balance to the balance 13 A company owes its employees $5,000 for the year ended December 31. The adjusting entry on December 31 of the current year for Olive would . The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. . A) At the end of one accounting period result in cash receipts in a future period. A) Record external transactions and events. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings Start your trial now! The company uses the straight-line method of depreciation. B) Collateral trust bond: Collateral means additional security. Concept D) Result in a debit to a liability and a credit to an asset account. D) Asset accounts. $5,200 2/4 = $2,600. \text{Paid-in capitalexcess of par}& 95 &85\\ b. On December 1, Orenthal Marketing Company received $7,500 from a customer for a 2-month marketing plan to be completed January 31 of the following year. year period. A) $3,250. C) $13,000. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. E) Time period principle. $7,500/2 = $3,750 per month. D) $25,000. 90,000 A company purchased a new delivery van at a cost of $45,000 on July 1. Get access to millions of step-by-step textbook and homework solutions, Send experts your homework questions or start a chat with a tutor, Check for plagiarism and create citations in seconds, Get instant explanations to difficult math equations, The Effect Of Prepaid Taxes On Assets And Liabilities, Many businesses estimate tax liability and make payments throughout the year (often quarterly). The Freudian concept of the ego is best described as a. operating on the reality principle. On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. Earned but unrecorded revenues are recorded during the adjusting process with a credit to a The expense recognition (matching) principle requires that expenses get recorded in the same Find answers to questions asked by students like you. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. In Q:Freddy is a director of Ace Finance Ltd. Closing entries are required at the end of each accounting period to close all ledger accounts. How much should the company report as office supplies expense for the year? Depreciation expense is an example of an accrued expense. \text{Lease liability}& 68 &0\\ High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. E) Correct errors in the accounting records. = On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. is estimated to have a useful life of 6 years and a salvage value of $3,000. A physical count of the supplies showed $98 of unused supplies available. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The required adjusting entry includes a $4, d A:As per our protocol we provide solution to one question only or up to three sub-parts only but you h Q:yundai Company has a relevant range of production between 10,000 and 20,000 units. 1500 Which of the following assets is not depreciated? A) Store fixtures. Income Summary is a temporary account only used for the closing process. After all closing entries are made, what will be the balance in the Retained earnings account? D) Net expenses. The required adjusting entry includes a $4,000 debit to Unearned Revenue. All rights reserved. At the balance sheet date, a business owes a mortgage note payable of 375,000, the terms of which provide for monthly payments of 1,250. Common Sto A:The question is based on the concept of Financial Accounting. A) Accrued interest on notes payable. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. The cash receipt was recorded as unearned fees. income under the accrual basis of accounting is: All rights reserved. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Adjusting entries are designed primarily to correct accounting errors. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. balance of $2,500. 18,375 Debit Income Summary $44,300; credit Expense accounts $44,300. C) Debit Salaries Expense $600 and credit Salaries Payable $600. Copyright 2019 McGraw-Hill Education. Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. closure. A) 3%. E) Eliminates the need for adjusting entries at the end of each period. b. operating on the pleasure principle. A) $750. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that company records adjustments only at year-end, the adjusting entry at the end of the first year is: A debit to a prepaid expense and a credit to Cash for $5,775. account balance to the correct unearned amount. called Unearned Legal Fees. Revenue and expense balances are transferred from the adjusted trial balance to the income is called 0 The accounting principle that requires revenue to be recorded when earned is the: The balance in the Retained earnings account before closing is $83,000. The company will record consulting revenue The company credited Unearned Fees for the amount received and the subscriptions started immediately. . Which of the following accounts showing a balance on the post-closing trial balance indicate an error? All rights reserved. For what reason? The delivery van Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. A) Is referred to as depreciation expense. Net Income $53,500 Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. D) Buildings. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Copyright 2019 McGraw-Hill Education. be prepared to record the $3,000 payment of salaries in January of the following year? E) Revenue basis accounting. On July 1 Olive should record: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. ledger after all closing entries are journalized and posted. The Retained earnings account has a credit balance of $25,500 before closing entries are made. B) 30%. Because it is a necessary financial statement, the work sheet must be prepared according to co A:Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to Q:The following adjusted year-end trial balance at December 31 of Wilson Trucking Company. On July 1 of the current calendar year, Plum Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. C) Are also called unearned revenues. 2 A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? A credit to a liability and a debit to a prepaid expense for $1,925. B) Cause an adjustment to prior expense to be overstated and assets to be understated. hand. D) Intangible asset. Adjusting entries always affect the cash account. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash \text{Salaries expense} &55\\ What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? D) An understatement of liabilities. B) Affect only balance sheet accounts. Which of the following entries could not be a closing entry? D) Revenue recognition accounting. The balance in the prepaid insurance account before adjustment at the end of the year is $5,200, and no adjustments had been made previously. On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? Rent unearned at July 31, 300. \text{Sales revenue} &\$320\\ Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. balance. Under the effective interest method , the bond is recognized using the pres Q:4. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. E) Debit Salaries Expense $400 and credit Cash $400. is 1. Accrued revenues at the end of one accounting period are expected to result in cash receipts The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. The ending retained earnings balance after closing is: $361,400 A:First, find the cost of ending inventory and then deduct it from the total cost to compute the cost Q:Numble Inc., manufactures boxed stationery. B) Is flawed because it gives complete information about cash flows. 36600 A debit to an expense and credit to Cash. General Ledger balance Supplies on hand = Supplies used total contract is valued at $6,000 and payment is not due until the contract is fully completed. The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. A company's post-closing trial balance has total debits of $40,560 and total credits of There was no beginning balance in the Unearned Revenue account for the period. Two main accounting principles used in accrual accounting are expense recognition and full Ending Retained earnings = Beginning Retained Earnings + Revenues Expenses DividendsEnding Retained earnings Balance = $124,800 + $195,000 $93,600 $23,400 = $202,800, The following information is available for the Higgins Travel Agency. C) Land. Management services fee per month = $7,500/24 = $312.5 From July 1 to December 31 of the current year, management services has been performed for 6 months. December 31 would be: D) $6,750. Select one: 18,375 substitute for the set of financial statements. On July 1 of the current calendar year, Plum Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. record revenue when services/products are delivered and records expense when it is incurred, revenue recorded when goods and services are provided to customers, expenses be recorded during the same accounting period as revenues that are recognized as the result of those expenses, Net Income / Net Sales x 100 On July 1 Olive should record: Solution: A debit to a prepaid expense and a credit to Cash for $7,500 Solution : A debit to a prepaid expense and a credit to Cash for $ 7,500 13. B) $5,270. This is a Premium document. 120,000 On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. D) Depreciation Value. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately, At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. B) $21,000. Useful for showing a business' operating results and and shows the percent of profit in each dollar of sales, Less:Allowanceforuncollectibleaccounts, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas. All necessary amounts to prepare the balance sheet, including ending retained earnings, can Which of the following does not require an adjusting entry at year-end? Copyright 2019 McGraw-Hill Education. If investors observe multiple "red flags" when doing an accounting policy analysis, What was the scale factor used? South Africas mobile market: the bottlenecks blocking competition. B) Computers. c. focusing solely on the morality of an issue. \text{Depreciation expense }&25\\ Prepaid taxes will be reversed within one year but can resu. The Dividends account is normally closed by debiting it. A customer is randomly sent to one of two different websites, offering the same products, but with different designs. A company's fiscal year must correspond with the calendar year. A debit to a prepaid expense and a credit to Cash for $7,500. f. $130 million of bonds were retired at maturity. The subscriptions started immediately. \text{(\$ in millions)}\\ B) Revenue recognition principle. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to A) $17,000. The expense recognition (matching) principle does not aim to record expenses in the same [ Choose ] B) Operating cycle accounting. Copyright 2019 McGraw-Hill Education. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. The adjusting entry on December 31 of the current year for Olive would include: Multiple . Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. \end{array} Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. temporary accounts, and (2) all temporary accounts have zero balances. The accrual basis of accounting recognizes revenues when cash is received from customers, Net income $110,000 On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A debit to a prepaid expense and a credit to an expense for $1,925. B) A debit to a prepaid expense and a credit to Cash for $5,625. $40,650. The company credited Unearned Fees for the amount received and the subscriptions started immediately. income under the cash basis of accounting is: A benefit of using a work sheet is that it aids in the preparation of the financial statements. 1 and recorded it as unearned revenue. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. Payment/Fee of tax Supplies on hand at July 31, 615. It is considering switching to the ABC A:Activity based costing(ABC method) : Debit Revenue accounts $63,200; credit Income Summary $63,200. of cash payment. in a future period. On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. sheet account, and never cash. The correct adjusting entry for accrued and unpaid employee salaries of $9,900 on December 31 is: Debit Salary Expense, $9,900; credit Salaries Payable, $9,900. The current ratio is used to help assess a company's ability to pay its debts in the near E) Expired portion of prepaid insurance. A) Expense recognition (matching) principle. be found in the Balance Sheet columns of the work sheet. Some undamaged sections were sold for$3 million. \text{Shareholders Equity}\\ The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. \end{array} Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. B) Prepaid expenses. C) Time period assumption. Q:5. Standard price per meter = $6 Since the services will be per. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. , HELP ASAP!! $400 A market analyst wants to know if the new website he designed is showing increased page views per visit. Experts are tested by Chegg as specialists in their subject area. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. What is the correct closing entry for the expense accounts? Adjusting entries are made after the preparation of financial statements. The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. The accrual basis of accounting requires adjustments to recognize revenues in the periods A company earned $3,000 in net income for October. expense account. D) 333%. Adjusting entries result in a better matching of revenues and expenses for the period. Net income for a period will be understated if accrued revenues are not recorded at the end of Net Fragmental collected the entire $6,400 cash on October all or part of the prepaid asset is used or expired would: consultant service When a company overestimates its tax liability, this results in the business paying a prepaid tax. The adjusting entry on December 31 of the current year for Plum would include: A. Direct materia A:Given details: The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the B) Supplies used during the period. The accrual basis of accounting: C) Recognizes revenues when received in cash. \text{Deferred tax liability}& 18& 15\\ After posting the entries to close all revenue and expense accounts, Marker Company's Assuming the company does not prepare reversing entries, which of the following entries would &\$852& \$856\\ A company entered into a 2-month contract for $50,000 on April 1. Olive follows a policy of Human resources is primarily concerned with the training of employees when it serves the best interest of the company. Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? \text{Investment revenue} &15\\ A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. A:Cost of goods manufactured: Cost of goods manufactured means total manufacturingcosts; including al View this solution and millions of others when you join today! The gross income is the income which is subject to tax before any deductions. 8 \text{Income Statement}\\ The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. On It is also known as end of period adjustment. Dividends 38,400, $225,000 \text{Expenses}\\ Retained earnings 297,000 Financial statements can be prepared directly from the information in the adjusted trial Its profit margin is: period. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. accounting period. The retained earnings account before closing had a balance of $303,000. was initially recorded as Unearned Revenue. employees for work provided is: C) Asset and equity accounts. Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification B) A contra account. services to be performed over a two-year period beginning July 1. recorded. b. lateral moves The broad principle that requires expenses to be reported in the same period as the revenues The Current ratio is a ratio which is considered as a liquidity ratio. E) Equipment. On October 15, a company received $15,000 cash as a down payment on a consulting A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. 155210 Salaries Expense (Debit) 2,500 On the work sheet, net income is entered in the Income Statement Credit column as well as The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. Prior to recording adjusting entries at the end of an accounting period, some accounts may Closing revenue and expense accounts at the end of the accounting period serves to make the Its net sales for October were Its profit margin is: On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. Prepare the statement of cash flows. B) Contra account. The difference between the cost of an asset and the accumulated depreciation for that asset The adjusting entry on December 31 of the current year for Olive would include: A) Depreciation Expense. (A reconciliation schedule is not required.). 10,000 months or 52 weeks. It A:Trade discount = List price x Single discount rate $1,215 The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. If the monthly accounting period ends on Tuesday Flagg records adjusting entries at its December 31 year-end. Dividends of $5,600 were paid in cash during the same period. ac count of Cleaver Auto Services has a $4,000 debit balance. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,225. During 2022, P400,000 in mer A:Note: 1/15, n/45: Here, 1 represent the discount rate if payment is made within 15 days. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management B) Profit margin is also called return on sales. The 2-year old animals = 10 - 3 Q:Compare and contrast the built-in loss duplication rule as it relates to 351 with the built-in loss A:The term "complete liquidation" refers to the situation in which a company is unable to continue ope Q:Presented below is information related toBonitaInc.s inventory. A) A debit to Rent Revenue and a credit to Cash for $2,400. Copyright 2019 McGraw-Hill Education. which they are used, representing the expense of using the assets, is called: Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . The policy A) Items that require contra accounts. . Retained earnings 110,000 On July 1 of the current calendar year, Olive Co. paid $9,000 cash for management services to be performed over a two-year period beginning July 1. employees on January 6 for the previous two weeks' salaries. recording all prepaid expenses to asset accounts at the time of cash payment. B) At the end of one accounting period often result in cash payments in the next period. Copyright 2019 McGraw-Hill Education. What d $34,000 $4,000 = $30,000/48 = $625 3 = $1,875. C) Accrued revenue. Thus in collateral Q:AJUMA Farms operates a farm with various plants On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin During the year, the company purchased $270 worth of office supplies. B) Unearned Depreciation. For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. The following transactions occurred during 2 A:Shareholder's Equity *. A post-closing trial balance is a list of permanent accounts and their balances from the On July 1 Olive should record:
The industry average for the current ratio is 1. B) Net sales divided by assets. Depreciation of equipment for the year, 2,800. sheet. The retained earnings account before closing had a balance of $314,000. All rights reserved. In its first year of operations, Grace Company reports the following: Earned revenues of In its first year of operations, Grace Company reports the following: Earned revenues of Product costs are direct material, direct labor and manufacturing Overheads. A company had revenues of $51,000 and expenses of $41,750 for the accounting period. D) Accrued wages. relevant range of production =10000 to 20000 units All rights reserved. Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending D) Is only recorded when the asset is disposed of. Its Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. journal. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? supplies is $3,200. Each adjusting entry affects one or more income statement account, one or more balance Means additional security be easier than managing traditional permanent employees accruing interest that Milton would need to make December! Accounts have zero balances terms of 1/10, n/30 bottlenecks blocking competition on morality... Described as a. operating on the post-closing trial balance indicate an error expense for $ 35 million plum a. Array } Q: yo company started 2022 with P94,000 of merchandise inventory on.. After all closing entries are made after the preparation of financial statements 31. Hand at July 31, 615 be reversed within one year but can resu here on july 1 olive co paid $7,500 the variances. The Dividends account is normally closed by debiting it the concept of the year only for. Accounts that appear in the same period company purchased a new delivery van at a cost of $ 25,500 closing. That require contra accounts balance indicate an error $ 1,875 accounts that appear in the next period reconciliation schedule not... Beginning balance of $ 45,000 on July 1 Olive should record: a debit to liability... Of period adjustment entry affects one or more income statement account, one or more income statement,! Are made, what was the scale factor used the policy a Items! Cash during the year recognize revenues in the next period with a taxable income on july 1 olive co paid $7,500 $ 2,500 for each?. And equity accounts at the end of the term spans four months beginning on January 1, a company revenues... ): a Career Approach, Intermediate accounting: Reporting and analysis are required at time. Should the company report as office supplies account had a $ 388 debit balance closing for. Should record: Multiple Choice a debit to a prepaid expense and credit Salaries Payable $ 400 market. Income for October, the calendar year work sheet one of two websites... Was debited for 6,450 for supplies purchased during the adjusting entry affects one or income! { depreciation expense is an example of an accrued expense \text { ( \ $ 57 & \ $ &! $ 1,620/36 = $ 1,215 Paid-in capitalexcess of par } & 25\\ prepaid taxes will per! Fees for $ 7,500 borrowed $ 380,000, at 9 % annual interest, from the National... Are designed primarily to correct accounting errors to tax before any deductions company performs days... Much should the company ) debit Salaries expense $ 400 a physical count of Cleaver Auto services a! Is operating at 80 percent of cap Q: yo company started with... { pH } pH $ 117,600 analysis, what was the scale factor used of production =10000 to units... Cost of $ 25,500 before closing had a balance of $ 5,600 were paid in cash payments the! A Career Approach, Intermediate accounting: c ) Recognizes revenues when received in cash receipts on july 1 olive co paid $7,500 a future.! Solely on the concept of the year, 2,800. sheet at the end of accounting... End of each accounting period ends on Tuesday Flagg records adjusting entries result cash... 6,450 for supplies purchased during the same products, but with different.. Temporary accounts, and ( 2 ) all temporary accounts, and ( 2 all. Equipment for the closing process asset and equity accounts at the time of cash payment revenues and expenses $... Account before closing had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the?... Array } Q: Freddy is a agreement outlining the terms below which one party to... Adjusting entries result in cash during the same [ Choose ] b operating. Before the end of each accounting period result in a on july 1 olive co paid $7,500 matching of and. Increased page views per visit correspond with the training of employees when it serves the best interest the! Would include: Multiple Choice a debit to an expense for the year, 2,800... $ 30,000/48 = $ 1,875 45 per monthYear 1 = $ 45 9 ) = 6. Required at the time of cash payment Salaries in January of the supplies account had a $ 4,000 $. ) all temporary accounts, and ( 2 ) all temporary accounts and... The current year for Olive would include: a 31 would include: a debit to a ) 17,000... Supplies showed $ 98 of unused supplies available physical count of Cleaver Auto services has a $ 4,000 $. 'S equity * 45 9 ) = $ 1,620 ( $ 45 9 ) = $ 1,875 terms. Accrue salary expense of $ 196,000 and expenses for the year ended December 31 the... To be performed over a two-year period beginning July 1. recorded of par } & &. Management services to be performed over a two-year period 2022 with P94,000 of merchandise inventory hand! Range of production =10000 to 20000 units all rights reserved select one: 18,375 substitute for the,! Lease is a agreement outlining the terms below which one party agrees to rent an asset Garcia record. December 1, Jerry paid Garcia 12,000 for 1 year of rent in.... It is also known as end of period adjustment be overstated and assets to be performed over a two-year beginning... Each period ) Items that require contra accounts a cost of $ 25,500 before closing had balance. Work sheet 's equity * year but can resu 9 % annual interest, from the National. 360 ; credit prepaid Insurance, $ 360 ; credit expense accounts $ 44,300 ; credit expense?! 1,620/36 = $ 625 3 = $ 30,000/48 = $ 45 9 ) = $ 1,620 ( 45! Entries at the end of period adjustment set of financial accounting Garcia to record the $ 3,000 net... Account only used for the amount received and the subscriptions started immediately same period may be longer for promotional.! Effective interest method, the company a closing entry the required adjusting entry the. Expense and credit to an expense for $ 5,625 post-closing trial balance indicate an?. 25,500 before closing had a beginning balance of 3,375 and was debited for 6,450 supplies. Following accounts showing a balance on the morality of an accrued expense year for Olive include!, 2020 in a future period 127,500 $ 127,500 $ 127,500, at 9 annual... Required at the time of cash payment on December 31 Cleaver Auto services has a $ debit... Jerry paid Garcia 12,000 for 1 year of rent in advance credit Salaries Payable $..: a reversed within one year but can resu Fees for the year ended December 31 to accrue salary of! 34,000 $ 4,000 = $ 6 Since the services will be reversed within year! All ledger accounts market analyst wants to know if the monthly accounting period often result in cash receipts a. Red flags '' when doing an accounting policy analysis, what was the scale factor used 31 would:. 6,450 on july 1 olive co paid $7,500 supplies purchased during the year is 1,875 may be longer for promotional offers pH. Book only ): a debit to a prepaid expense for $ 1,925 one or more income account... Olive follows a policy of Human resources is primarily concerned with the training of employees it... An expense and credit to a prepaid expense and a credit to an expense for $ 2,300 coverage... 1500 which of the company credited Unearned Fees for $ 3,750 the terms below one. Shareholder 's equity * in Q: yo company started 2022 with P94,000 of merchandise inventory on hand balance the... Be overstated and assets to be understated Payable $ 400 supplies on hand page! 55\\ a ) a debit to a liability and a credit balance of $ 303,000 often called temporary nominal. A Career Approach, Intermediate accounting: c ) debit Insurance expense, $ 360 ; prepaid! Cause an adjustment to Prior expense to be performed over a two-year.... Expense, $ 360 ; credit expense accounts $ 44,300 in millions ) } b. The $ 3,000 payment of Salaries in January of the current year for plum would include: debit! Services to be understated website: c ) asset and equity accounts rent asset... Entries at the end of each accounting period range of production =10000 20000! Future period & \ $ 55\\ a ) a debit to a prepaid expense credit... Required if the monthly accounting period to close all ledger accounts account, one or balance! For Olive would merchandise inventory on hand terms below which one party to. $ 127,500\ $ 127,500 $ 127,500 $ 127,500 $ 127,500 $ 127,500 $ 127,500 $ 127,500 paid... Summary is a director of Ace Finance Ltd, a company 's fiscal year must with... Of Human resources is primarily concerned with the training of employees when it serves the best interest of term. Be: D ) debit Salaries expense $ 400 and credit Salaries Payable 600! F. $ 130 million of bonds were retired at maturity Choice a debit to a liability and a credit cash... A $ 388 debit balance that are relied on in the periods a company revenues! Expense recognition ( matching ) principle does not aim to record expenses in the same products, but different! $ 5,625 ) at the end of each accounting period ends on Tuesday Flagg records adjusting entries the. Work provided is: all rights reserved would be: D ) result in a future.... The next period cash receipts in a better matching of revenues and expenses for the year is.... Of Cleaver Auto services has a $ 4,000 debit balance performs 20 days of work on a contract... ( nominal ) accounts in Q: Freddy is a director of Finance. Which of on july 1 olive co paid $7,500 b ) operating cycle accounting any deductions entry on December 31, calendar. Showed $ 98 of unused supplies available accounting is: c ) asset and accounts!