Adjusting entries : Adjusting entries are the journal entries , which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting. Accounting rules for journal/adjusting entries : To record increase balance of account : Debit assets, expenses, losses and credit liabilities, capital, revenue and gains. To record decrease balance of account : Credit assets, expenses, losses and debit liabilities, capital, revenue and gains. Reversing Entries: Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making. To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

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Answer 1

Question

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

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Answer 2

Question

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

Expert Solution & Answer

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Answer 3

Question

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

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Answer 4

Question

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

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Answer 5

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

Answer 6

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

Answer 7

Chapter 2, Problem 2.23E

1.

To determine

Adjusting entries:

Adjusting entries are the journal entries, which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

Accounting rules for journal/adjusting entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Reversing Entries:

Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision-making.

To Identify: The transaction which would be affected if Company M’s accountant has employed reversing entries for prepaid expenses.

Answer 8

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

Answer 9

2.

To determine

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

Answer 10

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

Answer 11

3.

To determine

To Prepare: The reversing entries at the beginning of 2017.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8Q Ch. 2 - Prob. 2.9Q Ch. 2 - Prob. 2.10Q

To Prepare: The original transactions creating the prepaid expenses, and the adjusting entries at the end of 2018 for the transaction identified above.

To Prepare: The reversing entries at the beginning of 2017.

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