Loose-Leaf for Financial and Managerial Accounting
7th Edition
ISBN: 9781260004861
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 20QS
A preparing
Cal Consulting follows the practice that prepayments are debited to expense when paid and unearned revenues are credited to revenue when cash is received. Given this company’s accounting practices, which one of the following applies to the preparations of adjusting entries at the end of its first accounting period?
- Unearned fees (on which cash was received in advance earlier in the period) are recorded with a debit to Consulting Fees Earned of $500 and credit to Unearned Consulting Fees of $500.
- Unpaid salaries of $400 are recorded with a debit to Prepaid Salaries of $400.
- Office supplies purchased for the period $1,000. The cost of unused office supplies of $650 is recorded with a debit to Supplies Expense of $650 and a credit to Office Supplies of $650.
- Earned but untitled (and unrecorded) consulting fees for the period were $1,200, which are recorded with a debit to Unearned Consulting Fees of $1,200 and a credit to Consulting Fees Earned of $1,200.
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Reversing
Certain adjusting entries made at the end of an accounting period are reversed at the beginning of the following period.
Required:
Analyze the following four adjusting entries made on December 31, and determine whether a reversing entry is needed.
Date
Description
Debit Credit
Reversing entry Reversing entry
necessary not necessary
Dec. 31 Interest Receivable
1,200
1,200
31 Rent Expense
1,000
O
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31 Interest Expense
31 Supplies Expense
Supplies
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Current Attempt in Progress
The bookkeeper for Sandhill Company asks you to prepare the following accrual adjusting entries at December 31. Use these account
titles: Service Revenue, Accounts Receivable, Interest Expense, Interest Payable, Salaries and Wages Expense, and Salaries and Wages
Payable. (List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.
Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
a.
b..
C
No.
a.
b.
C.
D
Interest on notes payable of $420 should be accrued.
Services performed but unbilled totals $1,780.
Salaries of $750 earned by employees have not been recorded or paid.
Date Account Titles and Explanation
Dec. 31
Dec. 31
Dec. 31
Debit
Credit
www
Why are adjusting entries recorded at the end of the accounting period?
Multiple Choice
The Cash account must be adjusted for the effects of the daily transactions with customers and creditors.
Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared.
The data from the temporary accounts (revenues, expenses, and dividends) must be moved into the retained earnings account.
The company's accounts must be adjusted to ensure that debits are equal to credits prior to preparing the trial balance.
Chapter 3 Solutions
Loose-Leaf for Financial and Managerial Accounting
Ch. 3 - Prob. 1MCQCh. 3 - Prior to recording adjusting entries, the Supplies...Ch. 3 - On May 1, 2017, a two-year insurance policy was...Ch. 3 - On November 1, 2017, Stockton Co. receives $3,600...Ch. 3 - If a company had $ 15,000 in net income for the...Ch. 3 - What is the difference between the cash basis and...Ch. 3 - Why is the accrual basis of accounting generally...Ch. 3 - What type of business is most likely to select a...Ch. 3 - Prob. 4DQCh. 3 - Prob. 5DQ
Ch. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - A If a company initially records prepaid expenses...Ch. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Prob. 22DQCh. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Prob. 29DQCh. 3 - Periodic reporting C1 Choose from the following...Ch. 3 - Computing accrual and cash income C1 In its first...Ch. 3 - Identifying accounting adjustments P1 Classify the...Ch. 3 - Prob. 4QSCh. 3 - Prepaid (deferred) expenses adjustments P1 For...Ch. 3 - Prepaid (deferred) expense adjustments P1 For each...Ch. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Recording and analyzing adjusting entries P1...Ch. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Preparing adjusting entries P6 Garcia Company had...Ch. 3 - A preparing adjusting entries P4 Cal Consulting...Ch. 3 - Preparing closing entries from the ledger P4 The...Ch. 3 - Identifying post-closing accounts P5 Identify...Ch. 3 - identifying the accounting cycle C2 List the...Ch. 3 - Classifying balance sheet items C3 The following...Ch. 3 - Identifying current accounts and computing the...Ch. 3 - Prob. 26QSCh. 3 - Prob. 27QSCh. 3 - Prob. 28QSCh. 3 - Exercise 3-1 Adjusting and paying accrued wages P1...Ch. 3 - Exercise 3-2 Adjusting and paying accrued expenses...Ch. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Exercise 3-8 Preparing closing entries...Ch. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Exercise 3-16 Preparing a balance sheet following...Ch. 3 - Prob. 1PSACh. 3 - Prob. 2PSACh. 3 - Prob. 3PSACh. 3 - Prob. 4PSACh. 3 - Prob. 5PSACh. 3 - Prob. 6PSACh. 3 - Prob. 7PSACh. 3 - Prob. 8PSACh. 3 - Prob. 1PSBCh. 3 - Prob. 2PSBCh. 3 - Prob. 3PSBCh. 3 - Prob. 4PSBCh. 3 - Prob. 5PSBCh. 3 - Prob. 6PSBCh. 3 - Prob. 7PSBCh. 3 - Prob. 8PSBCh. 3 - No Account Title Debit Credit 101 Cash $38,264 106...Ch. 3 - Prob. 1GLPCh. 3 - Prob. 2GLPCh. 3 - Prob. 3GLPCh. 3 - Prob. 4GLPCh. 3 - Prob. 5GLPCh. 3 - Prob. 6GLPCh. 3 - Prob. 1BTNCh. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Prob. 5BTNCh. 3 - Prob. 6BTNCh. 3 - Prob. 7BTNCh. 3 - Prob. 8BTNCh. 3 - Prob. 9BTN
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