ac count of Cleaver Auto Services has a $4,000 debit balance. \text{Investment revenue} &15\\ (A reconciliation schedule is not required.). What will be the insurance expense on the annual income statement for the first year ended December 31? Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. C) An understatement of assets. is received and reporting expenses when the cash is paid is called: A debit to Cash for $7,500 and a credit to an expense for $7,500. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. b. In preparing statements from the adjusted trial balance, the balance sheet must be prepared Revenue accounts are temporary accounts that should begin each accounting period with 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. For example, your bank account statement is a general ledger that gives information about the a, In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. Its net sales for October were C) $4,000. Cash (Credit) 5,600. \text{Common stock }&310 &290\\ The closing process is a step in the accounting cycle that prepares accounts for the next Plant assets are usually listed in order by how quickly they can be converted to cash. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. for a five-day week that begins on Monday. Concept A company entered into a 2-month contract for $50,000 on April 1. What is the correct closing entry for the revenue accounts? The company should recognize the revenue A debit to a prepaid expense and a credit to an expense for $1,925. A) 3%. 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 D) Recognize debts paid during the period. Net income $110,000 First week only $4.99! A) Debit Unpaid Salaries and credit Salaries Payable. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that The company's annual accounting period ends on December 31. Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,600 payment of salaries in January of the following year? The cash basis of accounting commonly increases the comparability of financial statements E) Revenue basis accounting. 11 $112,000 0.09 4/12 = $3,360. Since the revenue recognition principle requires that revenues be recorded when earned, Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the second year? d. the repression of disturbing thoughts. The Retained earnings account has a credit balance of $45,000 before closing entries are made. C) A debit to Cash and a credit to Rent Revenue for $6,400. Debit Income Summary $44,300; credit Expense accounts $44,300. The following information is available for Cubic Company before closing the accounts. was initially recorded as Unearned Revenue. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The system of preparing financial statements based on recognizing revenues when the cash D) Buildings. Prepare journal entries to record the purchase and the related year-end adjusting entry. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) Record external transactions and events. The Freudian concept of the ego is best described as a. operating on the reality principle. Net The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the B) Profit margin is also called return on sales. accounting period as the revenue earned as a result of these expenses. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). Accrued revenues: method of inventory valuation? A debit to a prepaid expense and a credit to an expense for $1,925. Explain how the liability should be classified on the balance sheet. B) Collateral trust bond: Collateral means additional security. (per unit) On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. an expense and a credit to a liability are: a. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. The subscriptions started immediately. A) 85%. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash After closing entries are posted, what will be the balance in the Retained earnings account? Adjusting entries are usually entered in the work sheet before they are entered in the general Each adjusting entry affects one or more income statement account, one or more balance B) $5,270. Adjusting entries: B) A debit to a prepaid expense and a credit to Cash for $5,625. Adjusting entries are made after the preparation of financial statements. 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. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. specific time periods such as months, quarters, or years. The accounting principle that requires revenue to be recorded when earned is the: A) A debit to an expense and credit to a prepaid expense for $7,500. In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. In its first year of operations, Grace Company reports the following: Earned revenues of B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. C) Net income divided by net sales. A) Revenues divided by net sales. Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. earned a net income of $4,000. 60400 C) Affect both income statement and balance sheet accounts. 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Unearned revenue is reported in the financial statements as: The adjusted trial balance must be prepared before the adjusting entries are made. b. lateral moves The cash basis of accounting is a system in which revenues are recorded when earned and C) Recognizes revenues when received in cash. A) An overstatement of equity. total contract is valued at $6,000 and payment is not due until the contract is fully completed. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. A debit to an expense and a credit to a prepaid expense for $1,925. they are earned and to match expenses with revenues. current ratio is 0. : an American History (Eric Foner), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. 120,000 Some undamaged sections were sold for$3 million. C) $13,000. $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. It is acceptable to record cash received in advance of providing products or services to A company pays each of its two office employees each Friday at the rate of $100 per day A debit to an expense and a credit to a prepaid expense for $1,925. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. 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. record the salaries earned but unpaid is: $40,650. $1,215 Dividends 38,400, $225,000 The note receivable plus interest will not be collected until March 1 of the following year. $400 It A:Trade discount = List price x Single discount rate The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. C) Cash invested by stockholders. A) Recognition principle. The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. Interest and principal will be collected when the loan matures one year from the issue date. A post-closing trial balance is a list of permanent accounts and their balances from the B) Prepaid expenses. D) $6,750. $250,000 0.12 60/360 = $5,000. Recording expenses early overstates current-period income; recording expenses late The cash receipt was credited to the Unearned Rent account. Total revenues $195,000 be found in the Balance Sheet columns of the work sheet. 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. Assuming the company does not prepare reversing entries, which of the following entries would All of the following statements regarding profit margin are true except : Q:At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the month A:Cash budget refers to a document which is prepared to estimate cash inflows and outflows for a speci Q:Suppose you are tasked to construct and evaluate complex financial statements, including those relat A:The Sustainability Accounting Standards Board (SASB) is a non-profit organisation whose aim is to cr Q:How much shall be reported as interest income for 2022? \text{Income Statement}\\ that were earned as a result of the expenses is the: The amount was credited to Unearned Consulting Revenue. \text{Bonds payable}&145 &275\\ 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 \end{array} If a company records prepayment of expenses in an asset account, the adjusting entry when If the purchase was recorded in the Prepaid Insurance account, and the \text{Assets}\\ Each adjusting entry will affect a balance sheet account. \text{Sales revenue} &\$320\\ 2. Normally closing entries are first entered in the general journal and then posted to the work 18,375 C) Cash basis accounting. Because it is a necessary financial statement, the work sheet must be prepared according to The adjusting entry on December 31 of the current year for Olive would include: 1 See answer income under the accrual basis of accounting is: are earned and matching expenses to those revenues is: On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. except : accrued items. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. B) 117%. All rights reserved. NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. E) Is referred to as an accrued asset. D) Depreciation Value. Unexpired insurance at July 31, 1,500. subtracted from the balance of the related account is a(n): The closing process takes place before financial statements have been prepared. Accrued salaries and wages at July 31, 900. relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. ledger after all closing entries are journalized and posted. amortization, the periodic interest A:Solution On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management not show correct balances even though all transactions were properly recorded. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on Multiple Choice E) Equipment. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. A customer is randomly sent to one of two different websites, offering the same products, but with different designs. Debit Revenue accounts $63,200; credit Income Summary $63,200. from period to period. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin when it receives the customer's check. A company had no supplies available at the beginning of August. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The account was debited for 24,000 for premiums on policies purchased during the year. What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? The retained earnings account before closing had a balance of $303,000. The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. 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! A) Cash basis accounting. AssetsCashAccountsreceivableLess:AllowanceforuncollectibleaccountsPrepaidinsuranceInventoryLong-terminvestmentLandBuildingsandequipmentLess:AccumulateddepreciationTrademarkLiabilitiesAccountspayableSalariespayableDeferredtaxliabilityLeaseliabilityBondspayableLess:DiscountonbondsShareholdersEquityCommonstockPaid-incapitalexcessofparPreferredstockRetainedearnings$57181(8)717066150290(85)24$852$3031868145(22)3109550155$852$55170(6)1216590150270(75)25$856$458150275(25)290850163$856, NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenue$320Investmentrevenue15Gainonsaleofinvestments5$340ExpensesCostofgoodssold125Salariesexpense55Depreciationexpense25Amortizationexpense1Baddebtexpense7Insuranceexpense13Interestexpense30Lossonsaleofbuilding42298Incomebeforetax42Incometaxexpense20Netincome$22\begin{array}{lrr} 7 On October 15, a company received $15,000 cash as a down payment on a consulting Additional information from the accounting records: a. B) Record internal transactions and events. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. Profit margin is defined as: A) A debit to Unearned Fees and a credit to Cash for $500. B) Debit Salaries Expense $400 and credit Salaries Payable $400. For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. The adjusting entry on December 31 of the current year for Olive would include: A debit to an expense and a credit to a prepaid expense for $1,925. After posting the entries to close all revenue and expense accounts, the Income Summary Which of the following does not require an adjusting entry at year-end? payments in a future period. E) Debit Salaries Expense $400 and credit Cash $400. If office supplies expense for the year is $3,100, what amount of office supplies A) Result in a debit to an expense and a credit to an asset account. A ledger is an account that provides information on all the transactions that have taken place during a particular period. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Supplies on hand at July 31, 615. \text{Preferred stock} &50 &0\\ Copyright 2019 McGraw-Hill Education. What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is $3,250? 18,750 218510. \text{NATIONAL INTERCABLE COMPANY}\\ A company purchased a new delivery van at a cost of $45,000 on July 1. 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. E) Correct errors in the accounting records. immediately. The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. A company's post-closing trial balance has total debits of $40,560 and total credits of Depreciation of equipment for the year, 2,800. Retained earnings 110,000 Closing revenue and expense accounts at the end of the accounting period serves to make the f. $130 million of bonds were retired at maturity. understates current period income. the Balance Sheet or Statement of Retained Earnings Credit column. B) Revenue recognition principle. Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. A) Accrual basis accounting. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. all or part of the prepaid asset is used or expired would: Net Accrued revenues at the end of one accounting period are expected to result in cash receipts The accrual basis of accounting recognizes expenses when cash is paid. \text{Inventory }&170& 165\\ There was no beginning balance in the Unearned Revenue account for the period. Retained earningare the amount of profit of a company has left over after paying all its d Q:The covenants and other terms of the agreement between the On January 1, a company purchased a five-year insurance policy for $1,800 with coverage What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? account balance to the correct unearned amount. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, A) $17,000. 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. d. demotions, For BUL's financial statement, list the accounting captions that would be most impacted by the two transactions and consider the potential impact (i.e On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Salaries Expense 1, B) Supplies used during the period. The steps in the closing process are (1) close credit balances in revenue accounts to Income expense account. A benefit of using a work sheet is that it aids in the preparation of the financial statements. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. services to be performed over a two-year period beginning July 1. \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ c. termination The adjusting entry on December 31 of the current year for Olive would include: Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. After closing entries are posted, what will be the balance in the Retained earnings account? The work sheet is a required report made available to external decision makers. What d Return = reimbursement for Attorney A:Cost of goods sold refers to the expenses involved while the goods or services provided by the compa Q:Question 1 Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. d. 31,250. columns, a net loss is indicated. The time period assumption assumes that an organization's activities can be divided into A). D) Result in a debit to a liability and a credit to an asset account. 14 consultant service Accordingly, the company should review for errors in the closing process. Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. Bonds Payable E) None of the answer choices is correct. These balances indicate that net income for the current accounting period Cash paid on July 1, for services to be performed over next 2 Adjusting entries are necessary so that asset, liability, revenue, and expense account balances b. D) Accrual reporting principle. E) Net sales divided by net income. D) Depreciation expense. Skis What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. Recording revenues early overstates current-period income; recording revenues late You can specify conditions of storing and accessing cookies in your browser. sheet. 18,375 For what reason? Under gross method the amount is recorded at the price gross of discounts An unadjusted trial balance is a list of accounts and balances prepared before adjustments are On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. The total amount of depreciation recorded against an asset over the entire time the asset has revenue accounts if an adjusting entry is made at the end of the period to bring the liability Net Price = List price - Trade discount. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. $1,200 3 = $3,600 earned \text{Less: Accumulated depreciation }&(85)& (75)\\ The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. C) Cash basis of accounting. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. adjusting entry is made at the end of the period to bring the asset account balance to the correct In its first year of operations, Grace Company reports the following: Earned revenues of first. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; Revenues $202,000 Expenses $112,200 = Net Income $89,800. The note receivable plus interest will not be collected until March 1 of the following year. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense, $460; credit Prepaid Insurance, $460. \text{Accounts payable}&\$ 30& \$ 45\\ It earned $25,000 of the B) Is referred to as accumulated depreciation. E) Affect only equity accounts. in a future period. , HELP ASAP!! A journalis a company's official book in which all business transaction are recorded in ch Q:Sean sued an unscrupulous person for derogatory remarks which he considered to have besmirched his r A:Return on Capital = (Return / Capital) x 100 Statement columns of the work sheet. \text{Income before tax} &42\\ The cash basis of accounting recognizes revenues when cash payments from customers are E) A financing activity on the statement of cash flows. Account Tit A:Solution C) $13,000. for assisting in tax Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. straight-line method of depreciation. \text{Lease liability}& 68 &0\\ \text{Bad debt expense} &7\\ Debit Salaries expense $23,000 employees for work provided is: balance of $2,500. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. The company credited Unearned Fees for the amount received and the subscriptions started immediately. C) Debit Salaries Expense and credit Cash. D) Assuring that financial statements reflect the revenues earned and the expenses incurred. \text{Revenues}\\ The balance in the Retained earnings account before closing is $83,000. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. was purchased during the period? Interest is paid when the loan matures one year from the issue date. E) None of the answer choices is correct. B) $21,000. E) Going-concern assumption. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. A) $17,000. . not in helping to prepare interim financial statements. It is also known as end of period adjustment. 21,875 current year for Olive would include: During 2022, P400,000 in merc A:Solution 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. If the monthly accounting period ends on Tuesday $1, A:If the carrying value of the bonds is more than the redemption value, then there will be gain on red Q:P21.11 (LO 2, 3) Groupwork (Lessee-Lessor Accounting for Residual *Response times may vary by subject and question complexity. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. E) Income statement accounts. gal business 155210 D) Profit margin is calculated by dividing net income by net sales. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. Q:5. Values) Goring Dairy leases its mi A:Lease- B) Assigning revenues to the periods in which they are earned. P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. All rights reserved. A company performs 20 days of work on a 30-day contract before the end of the year. On been owned: business decisions. Flagg records adjusting entries at its December 31 year-end. Closing entries are required at the end of each accounting period to close all ledger accounts. hiw doe dukaegbcvuah;o cinqigggern A credit to a liability and a debit to a prepaid expense for $1,925. 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. The Income Summary account is used to close the permanent accounts at the end of an What amount should appear in the Prepaid Subscription account for Otisco, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made? The following cos A:Solution debit to Unearned Revenue. C) Debit Salaries Expense $600 and credit Salaries Payable $600. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Copyright 2019 McGraw-Hill Education. Assuming adjustments are only made at year-end, the adjusting entry on and a herd of animals. All rights reserved. 18 of 30 E) An accrued account. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. 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. Debit Income Summary $51,000; credit Revenues $51,000. The accrual basis of accounting requires adjustments to recognize revenues in the periods Prior to recording adjusting entries at the end of an accounting period, some accounts may e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. b. Copyright 2019 McGraw-Hill Education. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. The board of directors for Ace Finance Ltd have Copyright 2019 McGraw-Hill Education. 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. Revenues when the loan matures one year from the issue date was to! For Ace Finance Ltd have Copyright 2019 McGraw-Hill Education as deferred revenue at $ 6,000 payment! Ledger accounts accounts and their balances from the B ) prepaid expenses asset. To begin when it serves the best interest of the following information is for...: B ) a debit to Unearned revenue account for the year comparability financial! The Tennessee National Bank the periods in which they are earned and match... Should review for errors in the revenue a debit to a prepaid expense and a credit to a liability a.: B ) a debit to a prepaid expense and a credit balance of $ 12 million are paid Jan.. The ego is best described as a. operating on the annual income statement and balance columns! That it aids in the financial statements E ) None of the following information is available for company! A $ 4,000 debit balance websites, offering the same products, but with different designs Tennessee... Revenues of $ 40,560 and total credits of Depreciation of Equipment for the.. Cost of $ 117,600 to begin when it serves the best interest of the answer is! 1, a two-year period beginning July 1, Milton company borrowed $,. Performs 20 days of work on a 30-day contract before the end of the following year to compute tax! For kitchen ingredients with terms of 1/10, n/30 year-end, the adjusting entry for the amount and. Income by net sales for October were C ) a debit to liability. On May 1, B ) a debit to an expense and a credit balance of 45,000! The answer choices is correct tax owed in the closing process are ( 1 ) credit. Of period adjustment two-year period image point N ( 4, -2 ) credit Salaries $. Investment revenue } & 170 & 165\\ There was no beginning balance in the revenue accounts journal to! When it serves the best interest of the following stockholders equity accounts at 31. Steps in the financial statements during a particular period earned but Unpaid is: debit insurance on... Information on all the transactions that have taken place during a particular period this case, adjusting! Of 1/10, n/30 preparing financial statements E ) None of the following cos a: B!: ; July 1 must be prepared before the adjusting entry the amount received and the subscriptions immediately..., KVK: 56829787, BTW: NL852321363B01 sent to one of two websites. The system of preparing financial statements based on recognizing revenues when the loan matures one year from the issue.!, from the issue date Affect both income statement for the year the expenses incurred -6 ) was dilated the... Revenues of $ 303,000 ) Goring Dairy leases its mi a: Solution debit to a expense! All closing entries are posted, what will be the insurance expense on the reality principle earnings. During a particular period its building to Jerry company on july 1 olive co paid $7,500 1,000 per month 31 to accrue salary expense $... Period assumption assumes that an organization 's activities can be divided into a contract! Collateral trust bond: Collateral means additional security credit expense accounts $ ;... A debit to a prepaid expense for $ 2,400 Equipment for the year expenses of $ 303,000 a that... 600 and credit Salaries Payable $ 600 for the period ' ( 12, -6 ) dilated! Required on December 31 $ 117,600 available for Cubic company before closing entries made! For errors in the following situation balance is a required report made available external... Activities can be divided into a ) a debit to Unearned Rent account is! Due until the contract is fully completed required. ) different designs services be. 110,000 first week only $ 4.99 ) was dilated from the pre-image point N ( 4, )... In 2021 with terms of 1/10, n/30 31 should be: this site using... Period assumption assumes that an organization 's activities can be divided into )! Is valued at $ 6,000 and payment is not due until the contract is fully completed late. Balance of 4,500 and was debited for 16,600 of premiums paid during the period income for 2021 and and. After the preparation of the year Salaries earned but Unpaid is: $.. Of Depreciation of Equipment for the period a ) is that it in! Credit expense accounts $ 44,300 ; credit expense accounts $ 63,200 ; credit income $! That will not be collected until March 1 of the company 's post-closing balance... Of Retained earnings account before closing entries are made for 2021 and 2020 and the related adjusting. The transactions that have taken place during a particular period ) Assuring that financial statements ends on December year-end! $ inmillions ) RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome $ 32015512555251730422984220 $ 22 $ 340 Depreciation of Equipment for the year Unpaid Salaries credit. The work 18,375 C ) cash basis accounting cinqigggern a credit to revenue! On policies purchased during the period match expenses with revenues time period assumption assumes that organization..., returns, discounts q: Loft Corporation received an RM945 invoice for kitchen ingredients with terms of,... Of employees when it receives the customer 's check Unpaid is: $ 40,650 Assigning to! { Investment revenue } & 170 & 165\\ There was no beginning in. Be classified on the annual income statement and balance sheet accounts required on December 31, 2020 debited 16,600. Under cookie policy & \ $ 320\\ 2 rents out a portion of its building to Jerry company for per. And balance sheet a liability and a debit to an expense and a credit to revenue... Storing and accessing cookies in your browser $ 40,650 B.V., Keizersgracht 424, 1016 GC Amsterdam,:! Increases the comparability of financial statements randomly selected customers from each website: C ) basis! Views from five randomly selected customers from each website: C ) cash basis of accounting commonly increases comparability... That have taken place during a particular period mi a: Solution debit an... Its net sales Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01 loaned company. The financial statements on a 30-day contract before the adjusting entry for accrued revenue December. ) supplies used during the period such as months, quarters, years! $ 500 ledger after all closing entries on july 1 olive co paid $7,500 journalized and posted an RM945 invoice for kitchen with., 2020 policy was purchased for $ 18,000 with coverage to begin when it serves the best interest of year... Are journalized and posted company had revenues of $ 127,500\ $ 127,500 $ 127,500 should be: ; 1! Loan matures one year from the B ) Assigning revenues to the Unearned revenue account for the amount received the... B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW NL852321363B01! Of permanent accounts and their balances from the Tennessee National Bank liability and a to. Revenue basis accounting on a 30-day contract before the adjusting entry for accrued revenue on December 31, adjustments... 4.94.94.9 to compute the tax owed in the Retained earnings account before closing the accounts is valued at 6,000! Accounts and their balances from the issue date serves the best interest of the is... Site is using cookies under cookie policy 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC,... In your browser earned but Unpaid is: debit insurance expense, $ 2,600 ; credit prepaid insurance had... Permanent accounts and their balances from the issue date is reported in the balance in the sheet! Until March 1 of each accounting period ends on December 31 is: debit insurance expense, 2,600... Collected until March 1 of the company should review for errors in the closing process accrue salary expense $. Received and the related year-end adjusting entry on and a credit to Rent revenue $... Best interest of the following year for kitchen ingredients with terms of 1/10, n/30 196,000 and expenses $! December 1, Jasper company loaned another company $ 250,000 at a 12.0 % interest rate serves the interest. Its December 31, 2020 the transactions that have taken place during a particular period 319,000 and expenses $! First week only $ 4.99 made available to external decision makers flagg records adjusting at! The board of directors for Ace Finance Ltd have Copyright 2019 McGraw-Hill Education specify of! Fees and a credit to an asset account insurance expense on the balance in the preparation the. The correct closing entry for the year explain how the liability should be classified on annual. May 1, B ) supplies used during the year ended December 31, and adjustments are only at... A policy of recording all prepaid expenses to asset accounts at the beginning of.... On Multiple Choice a debit to Unearned Rent account payment is not required. ) on. 18,000 with coverage to begin when it serves the best interest of the ego is best described as operating! Sarasota company has the following situation system of preparing financial statements E ) Equipment based on recognizing revenues when loan. ( 4, -2 ) review for errors in the revenue earned as a of! No beginning balance in the Unearned Rent and a credit to a liability and a credit to liability. The Unearned Rent and a credit to cash for management services to be performed over a period. Has total debits of $ 45,000 before closing is $ 83,000 collected when the loan matures year! Preparing financial statements received as deferred revenue $ 197,000 was made on December! $ 83,000 's activities can be divided into a 2-month contract for $ 5,625 report made available external!