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Exam 4: The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

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Question 41

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Provide the adjusting entries to account for the differences between the trial balance amounts and the adjusted trial balance amounts for the accounts shown. Only a partial trial balance is provided. Use the Adjustments column to show the entries.

	Trial Balance		Adjustments		Adjusted Trial Balance
	Debit	Credit	Debit	Credit	Debit	Credit
Supplies	500				250
Prepaid Rent	1,100				300
Equipment	10,000				10,000
Accum. Dep. - Equip		3,000				3,400
Service Fees		1,200				1,200
Depreciation Expense					400
Telephone Expense	50				50
Salaries Expense	500				600
Rent Expense
Supplies Expense					250

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Adjusted
Trial Balance Adjustments Trial...

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Question 42

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Why is it necessary to make an adjusting entry for supplies at the end of the fiscal period, and why are we given the supplies on hand at the end of the period to help us make this entry?

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We have to make an adjusting entry to sh...

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Question 43

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Ending capital is found by taking the beginning capital and adding the net income and withdrawals.

Which of the following would be an example of a contra-asset?

Hope for the Homeless purchased kitchen equipment for $47,000 with a residual value of $17,000 and a life expectancy of 5 years. Using straight-line depreciation, the amount of the depreciation adjustment for the first year would be

For each account listed, identify the category it belongs to, the normal balance (debit or credit), and the financial statement in which the account appears.

Account	Category	Normal Balance	Financial Statement
0. Cash	Asset	Debit	Balance Sheet
1 Capital, Beginning
2. Salaries Expense
3. Salaries Payable
4. Accounts Receivable
5. Prepaid Insurance
6. Withdrawals
7. Service Fees
8. Accounts Payable

On January 1 the supplies account had a balance of $811. During the month, $9,917 worth of supplies were purchased. The January 31 physical count of supplies shows there are $3,602. Determine the amount of supplies expense for January.

Every amount needed for the Statement of owner's equity can be found on the worksheet.

The adjustment that is made to allocate the cost of a building over its expected life is called

Which of the following will have a direct affect on the income statement?

Adjusting is the process of bringing accounts up to date at the end of the accounting period.

The original cost of equipment is reduced by the amount of Depreciation Expense.

On Friday, January 26 the Wages Expense account had a debit balance of $4,500 before the posting of the current week's wage of $1,500. Employees earn $1,500 for a five-day work week ending on Friday. They are then paid for that payroll. Determine the total wage expense for the month of January.

The accounts added below the trial balance, on the worksheet, are always decreasing.

Book value of an asset is always the same as the residual value.

When Income Statement credits exceed the debits on the worksheet,

At the start of this year 18 months rent was paid. At the year's end, how will this affect the balance sheet?

Equipment with a cost of $150,000 has an accumulated depreciation of $50,000. What is the book value of the equipment?

It is very unusual for the totals of the two Income Statement columns to be identical before net income is added.

Accumulated Depreciation is a contra-asset account found on the balance sheet.